Town of Enfield v. Hamilton

• Decision Date: 06 January 1930
• Citation: 148 A. 353,110 Conn. 319
• Court: Connecticut Supreme Court
• Parties: TOWN OF ENFIELD v. HAMILTON ET AL.

148 A. 353

110 Conn. 319

TOWN OF ENFIELD v. HAMILTON ET AL.

Supreme Court of Errors of Connecticut.

January 6, 1930

Appeal from Superior Court, Hartford County; Edward M. Yeomans Judge.

Action by the Town of Enfield against Clark L. Hamilton and others for reformation of a bond of indemnity and for damages for the default of a tax collector, brought to the superior court in Hartford county and tried to the court on the equitable issues only. Judgment for plaintiff, and defendant Fidelity &amp Casualty Company of New York, Incorporated, appeals. No error.

Ralph O. Wells, of Hartford, for appellant.

Philip J. Sullivan, Jr., of Thompsonville, and Leo J. Dowling, of Hartford, for appellee.

Argued before WHEELER, C.J., and MALTBIE, HAINES, HINMAN, and BANKS, JJ.

HAINES, J.

The complaint in this action consists of fifteen counts, the first twelve of which relate to certain claimed defaults of the defendant Hamilton as the tax collector of the plaintiff town for the years 1914-1917 and the last two are general in character. The thirteenth count charges that the surety bond which had been furnished by the defendant casualty company to the plaintiff town for the fidelity of the collector contained a misdescription of the office to which the collector had been elected, in that it referred to him as " Collector of ‘ Real Property Taxes' instead of ‘ Collector of Taxes' as it should have done to conform to law and the agreement of the parties" ; that the bond was accepted by the town in the belief that it was in accordance with law; that the misdescription was due to a mutual mistake or if not a mistake on the part of the casualty company, was fraudulently inserted by it with intent to lessen its liability as surety for the collector. It was alleged that, unless the policy be reformed and the misdescription corrected by the court, the plaintiff would suffer great pecuniary loss and damage. The plaintiff claimed a court order, judgment, or decree for the reformation of the original contract of suretyship to include the collection of personal property taxes and of any and all other items lawfully assessed. The answer to these charges was, in substance, a general denial, and by direction of the court the issues so raised were first tried and determined. Judgment was for the plaintiff, and the defendant casualty company appealed. In this court the plaintiff filed and argued a plea in abatement and a motion to erase, both upon the ground that the judgment in question was not a final judgment from which an appeal will lie. The plea in abatement is dismissed, since the exclusive remedy of the plaintiff on the ground alleged is by motion to erase. Wardell v. Killingly, 96 Conn. 718, 721, 115 A. 539.

Believing its rights against the casualty company might be injuriously affected by the claimed misdescription in the policy, the plaintiff town sought equitable relief in this thirteenth count by way of reformation of the policy. This is essentially independent of the main action, which was one at law for the collection of damages. Though judgment upon this issue does not of course finally dispose of the main case, it is clearly separable and distinct from any judgment which would be rendered therein. As between the plaintiff and the casualty company, it finally and irrevocably fixes the status and determines the rights of each with respect to the main suit. It is a " judgment in its nature final and separable from any other judgment that may be rendered in the action, although not finally disposing of the action," and therefore a final judgment from which appeal lies to the court. The motion to erase is denied. Bunnell v. Berlin Iron Bridge Co., 66 Conn. 24, 37, 33 A. 533; Guarantee Trust & Safe Deposit Co. v. Philadelphia, R. & N.E. Ry. Co., 69 Conn. 709, 714, 38 A. 792, 38 L.R.A. 804; Finch v. Ives, 24 Conn. 387; Norton v. Shore Line Electric Ry. Co., 84 Conn. 24, 31, 78 A. 587; Wardell v. Killingly, 96 Conn. 718, 722, 723, 115 A. 539; Banca Commerciale Italian Trust Co. v. Westchester Artistic Works, 108 Conn. 304, 142 A. 838.

The facts of record show that on October 5, 1914, the defendant Hamilton was elected to the office of collector of taxes of the plaintiff town, and re-elected for each of the succeeding twelve years. He was also appointed collector of personal taxes for the period February 1, 1915, to January 31, 1916, both inclusive. In the town of Enfield, property taxes are payable March 1st each year. It is claimed that, during his incumbency, Hamilton embezzled considerable sums of money which came into his hands as taxes, and failed to collect other taxes. C. D. Burbank, living in Enfield was agent for the defendant casualty company and A. S. Hopkins of Hartford was the resident manager of the company. The sole authority possessed by Burbank was to solicit applications for bonds and submit them to the casualty company, either directly or through the resident manager, Hopkins. He had no authority to bind the casualty company by any form of contract, nor had Hopkins, whose sole duty was to supervise the procurement and production of business for the company. Hamilton had formerly been bonded by the American Surety Company, but Hopkins offered Burbank a larger commission than was paid by the latter company, and this induced Burbank to seek the opportunity for the casualty company to write the " requisite" bonds for Hamilton as tax collector. Before writing the bonds, the casualty company procured from the town treasurer a statement as to the current liability and the condition of the accounts of Hamilton, and received the following letter in response:

" Thompsonville, Conn. March 14, 1915

The tax account of Clark L. Hamilton, Collector of the Town of Enfield, Connecticut on List of 1913, due March 1, 1914, to February 27, 1915, were examined by the Treasurer monthly as required by law.

On February 27, 1915, at the time liens were filed on Real estate the account was last examined and found correct with the books of the Collector.

As the selectmen left open, due to hard times, unadjusted accounts on personal property in the hope to obtain settlement without recourse of attachment, the final audit by the town auditors has not been made.

J. Hamilton Potter

Treasurer of Enfield, Conn."

The casualty company wrote two bonds, one covering the liability of the defendant Hamilton in the " office of collector of real property taxes" for $10,000, and the other covering his liability in the " office of collector of personal property taxes" for $1,000, both dated March 26, 1915, from that date " during said term" of his office. These two bonds were delivered simultaneously to the town of Enfield, and were deposited in the selectmen's box in the town clerk's office. These bonds were retained until the discovery of the default of Hamilton in or about 1927. The selectmen drew their order on the town treasurer, and he delivered his check payable to Burbank as agent of the casualty company, for the premiums on the bonds. Burbank knew that Hamilton had been elected collector of taxes, and also that he had, been appointed the collector of personal taxes, but it does not appear whether he gave that information to Hopkins or to the casualty company. However, this knowledge acquired by the agent, Burbank, while he was acting within the scope of his authority and in the course of the very transaction which this knowledge affected, is, in law, the knowledge of the principal, the casualty company. Trumbull v. Hewitt, 65 Conn. 60, 74, 31 A. 492. " The defendant cannot hide behind its agent's negligence in failing, if he did fail, to communicate that fact." Back v. People's Fire Ins. Co., 97 Conn. 336, 340, 116 A. 603, 605. Subsequent to 1915 the $10,000 bond was annually renewed or continued in force by the payment by the town of the annual premium for which the casualty company issued renewal or continuation certificates. The $1,000 bond was not renewed. Before procuring the bonds, Burbank did not see any selectman or other official of the plaintiff town other than the defendant Hamilton. The bonds were printed forms, requiring only the insertion of name, amount, title of office, and date, and were prepared by an assistant of one Anderson who was assistant superintendent of the bond department of the casualty company. Anderson did not examine the laws of Connecticut to ascertain what offices were held by tax collectors, but, with the above-quoted letter before him, caused two bonds to be prepared in the forms above stated--the first for $10,000, and the second for $1,000. The plaintiff contends that the first-named bond was intended to cover liability for the office of tax collector as defined by statute, which includes both the tax on real property and the tax on personal property, and that the smaller bond was to cover the collection of personal or poll taxes, a distinct office; both offices being held by Hamilton. The casualty company claims that the intention was to cover only the collection of the real property taxes to the extent of $10,000 and the collection of the personal property taxes only to the extent of $1,000. The expression used in the $10,000 bond is " office of collector of real property taxes," and in the $1,000 bond the expression is " office of collector of personal property taxes" ; the condition of the first bond being that " the Principal (Hamilton) shall faithfully perform such duties as may be imposed on him by law and shall honestly account for all money that may come into his hands in his official capacity during the said term." By statute there are but two offices; one being that of collector of taxes and the other the collector of personal or poll taxes. There is substantially no dispute as to the facts already...