Maddox v. Rader , 9 Mont. 126 ( 1889 )

Blake, C. J.

This action was commenced by the respondent Maddox, to recover from the appellants, the sheriff of Meagher County and the sureties upon his official bond, the sum of $5,314.69 and interest. Gaddis was allowed to intervene by the order of the court below, and demanded judgment against the appellants for the sum of $5,000. It appears from the transcript that the appellants voluntarily assumed the “burden of proof, and admitted all the material allegations of the complaint” of Maddox and Gaddis. The following statement of the facts, which are contained in the pleadings, defines clearly the nature of the present inquiry: William Rader was the sheriff of Meagher County in 1887, and the other, appellants executed, in 1886, his official bond in the sum of $5,000. The condition is that Rader “shall well, truly, and faithfully perform all official duties now required of him by law, and shall truly and faithfully execute and perform all the duties of such office of sheriff required by law to be executed subsequently to the execution of this bond.” Maddox placed in the hands of Rader, August 9, 1887, a chattel mortgage dated July 9, 1886, and executed by P. D. Kinyon, to secure the payment to Maddox of the sum of $7,313 in one year, with interest, and to Gaddis of the sum of $3,000 in one year, with interest. The property consisted of horses, and the sheriff was directed to take them into his possession and sell the same, and apply the proceeds according to the terms of such mortgage. The officer, between the ninth and thirtieth days of August, 1887, took possession of the property, and advertised it for sale at public auction, and between the thirtieth day of August and the fifth day of September, 1887, sold a large portion thereof for the sum of $10,735. On the last-named date the sheriff released and returned the remainder of the horses then unsold to Kinyon upon the payment of a sum of money, which was sufficient, when added to the amount of said sales, to satisfy the notes of Maddox and Gaddis, which are set forth in the mortgage, and all costs aud disbursements arising from the sale. There was due to Maddox, September 5, 1887, the sum of $8,137, and the sheriff paid to him, September 15, 1887, the sum of $2,872.31. Maddox demanded of the sheriff, September 17, 1887, the amount remaining due, $5,314.69, which has not been paid. Copies of the mortgage and bond are made parts of the complaint. The allegations in the pleading of Gaddis show similar facts, so far as the proceedings affect the sheriff. Rader, in his answer, denies that he received any other sum than $4,390.65 at the sale, and alleges that 142 horses were “ bid off and knocked down” to A. B. Kier for the price of $8,096.50, in pursuance of an agreement between Maddox and Gaddis and Kier. That Kier paid thereon the sum of $1,752.15, which is included in said amount of $4,390.65, “and was to have the period of five days in which to pay the balance of said sum of $8,096.50; the said Rader to keep and retain the said horses, mares, and colts until the full payment of said sum of $8,096.50, and in the event of Kier’s failure to fully pay said sum, the said $1,752.15 to become forfeited to the use of the said mortgagees, aud said horses, mares, and colts to be retained by said Rader for and on account of said mortgagees; and, subject to their orders, the said William Rader retained said sum of $1,752.15, and paid the same over to said mortgagees, it being, as aforesaid, a part of said sum of $4,390.65, aud retained in his custody said 142 horses, mares, and colts, subject to the order of the said mortgagees. That afterwards, to wit, on the-day of September, A. D. 1887, the said Rader notified the said mortgagees of Kier’s failure to pay the balance of said sum of $8,096.50, and notified them that said horses, mares, and colts were then and there held by him subject to their orders; and afterwards, to wit, on the-day of September, 1887, on said mortgagees failing to direct what disposition he should make of the same, the said Rader tendered said horses, mares, and colts to said mortgagees, which they then and there refused to receive; and that said Rader, ever since the last-mentioned date, has had, and now has, said horses, mares, and colts in his possession, subject to the order and disposal of said mortgagees. That on, to wit, the fifth day of September, A. D. 1887, P. D. Kinyon, the mortgagor in said mortgage mentioned, tendered and paid to said Rader the sum of $2,459.20, that being the balance due on said mortgage at that time, and demanded the return to him of the property then unsold, which was then held by the said Rader; and that thereupon the said Rader returned to the said Kinyon such unsold property, and paid over to the said mortgagees the said sum of $2,459.20. That the total money so as aforesaid by said Rader received was the sum of $6,849.85. That the costs, disbursements, and expenses in and about said mortgage sale were the sum of $1,445.35, which were paid off and discharged by said Rader; and that said Rader, for and on account of said chattel mortgage, has paid to Fletcher Maddox, mortgagee, the sum of $3,192.93, and to William Gaddis, mortgagee, the sum of $1,591.57. That the foregoing constitute the acts and facts complained of by plaintiff herein.” The same answer was filed to the complaint of Gaddis. The replications deny that any agreement was entered into with Kier or the sheriff, through the instructions of the mortgagees, which controlled the sale or disposition of the property. The testimony which was introduced at the trial on behalf of the sheriff and his sureties was excluded, and judgment was rendered by the court for Maddox and Gaddis.

The laws of the Territory provide that “it shall be lawful for the mortgagor of goods, chattels, or personal property to insert in his mortgage a clause authorizing the sheriff of the county in which such property, or any^part thereof, may be, to execute the power of sale therein granted to the mortgagee, his legal representative and assigns, in which case the sheriff of such county, at the time of such sale, may advertise and sell the mortgaged property in the manner provided in such mortgage. (Comp. Stats, div. 5, § 1550.) The next section is as follows: “The sheriff' making a sale of mortgaged property, as in the foregoing section provided, shall be entitled to receive as his compensation the same fees as upon sales of personal property on execution.” (Comp. Stats, div. 5, § 1551.) The chapter governing sheriffs prescribes that “the condition of such bond shall be, in substance, as follows: . . . . That if the said-shall well and faithfully perform and execute the duties of the office of sheriff of said county of-during the continuance in office by virtue of said election, without fraud, deceit, or oppression, and shall pay over all moneys that may come into his hands as sheriff, and shall deliver to his successor all writs, papers, and other things pertaining to his office, which may be so required by law.” (Comp. Stats, div. 5, § 850.) It will be observed that the language of the bond of Eader does not follow the words of the statute. The appellants contend, and it is conceded, that the liability of the sureties cannot be extended by implication, and that they are entitled to stand upon the terms of their written contract. It is further claimed that the omission of a condition respecting the paying over of moneys that may come into the hands of the sheriff, and the failure of the act relating to chattel mortgages to provide therefor, relieve the sureties from all responsibility in this action. Eader accepted the trust that was tendered to him by the mortgagees, and, by virtue of the statute and instrument conferring the authority upon him, took possession of the property, and admits that he received certain sums of money from the sales which have been mentioned. We are of the opinion that this court, in Vose v. Whitney, 7 Mont. 393, decided some of these questions, and Mr. Justice McLeary, in construing this law, says: “ Under this statute the sheriff took possession of these cattle in his official capacity, aud not solely as the agent of either the mortgagee or the mortgagor. He is an executive officer appointed by the law to make the sale of the mortgaged property in compliance with the terms of the mortgage itself. .... But inasmuch as he acted under the requirements of the law;, he must be held to have been performing an official duty.” Let us then gather from the terms of the mortgage the obligations that were voluntarily assumed by Bader at the request of the mortgagees. This instrument empowers the sheriff to sell the property “in the manner prescribed by law, and out of the money arising from such sale to retain the said principal and interest, together with the costs and charges of making such sale, together with an attorney’s commission of five per cent; and the overplus, if any there be, shall be paid by the party making such sale, on demand,” to Kinyon. It is a presumption of law that the bond of Bader was executed in contemplation of the statute defining the duties of the sheriff in making sales authorized by chattel mortgages. (Territory v. Carson, 7 Mont. 425.) The obligation to account for aud pay over money which may have been received by the officer in the discharge of his public trust 'is clearly included within the performance of the conditions that were undertaken by the sureties. It was the duty of Bader to comply faithfully with the provisions of the mortgage concerning the payment of the money which he obtained from the sale of the property of Kinyon. This action has been properly commenced against the principal and his sureties, who executed the bond that Bader would perform “all official duties.”

Does the evidence tend to prove that the foregoing agreements were made at the time of the sale by the officer, between Kier and the mortgagees? Maddox and Gaddis were not present, and N. B. Smith, Esq., acted and was consulted as their attorney. The appellauts insist that Bader accepted the bids of Kier under the contract which was entered into by Smith in behalf of the respondents. A material admission appears in the transcript as follows: “And the counsel for defendant, in open court, stated that they had no proof to offer, and did not expect to prove any kind or character of special authority in N. B. Smith, and relied solely upon his general authority by virtue of the mortgage having been placed in his hands for foreclosure.” The authorities are harmonious in supporting the proposition that an attorney at law has no right to receive anything except money in payment of a debt which has been intrusted to him for collection, without express direction from his client. (2 Greenleaf on Evidence, § 141, and cases cited; Stackhouse v. O’Hara, 14 Pa. St. 88; Harper v. Harvey, 4 W. Va. 539; Smock v. Dade, 5 Rand. 639; Jeter v. Haviland, 24 Ga. 252; Miller v. Edmonston, 8 Blackf. 291; Trumbull v. Nicholson, 27 Ill. 149; Campbell v. Bagley, 19 La. An. 172; Wright v. Daily, 26 Tex. 730; Nolan v. Jackson, 16 Ill. 272.) The respondents did not empower Smith to sell the mortgaged property to any bidder on credit, and are not bound by the action of the sheriff in the arrangements with Kier.

Eader retains, subject to the action of the mortgagees, the ' horses which were “knocked down” to Kier; and, having treated the bids of Kier as cash, accepted from the mortgagor the sum of $2,459.20 in full satisfaction of the mortgage, and delivered to Kinyon the property remaining unsold. It is not pretended that these acts of the officer were authorized by the respondents, or their attorney, but the appellants say that they have been ratified by the receipt of the amounts arising from the transactions, which are referred to in the answer. The mortgagees demanded from Eader the payment of the principal and interest of the promissory notes made by Kinyon, and refused to take property in lieu thereof. They accepted from the sheriff the sums of money which have been specified in partial satisfaction of their claim against the mortgagor. No conditions were annexed to these payments by Eader, and no fact is pleaded or shown which can be deemed a ratification of his conduct by the respondents.

By a stipulation of the parties, the court heard upon this appeal the arguments of Maddox and Gaddis upon the right of the latter to intervene in the action. They are interested as mortgagees, and hold separate promissory notes, which are payable by Kinyon at the same time, and secured by the saíne property, and no priority is recognized in tbe mortgage. Mr. Jones, in his treatise on Chattel Mortgages, says: “ Where a mortgage has been given to secure two notes to different holders, and the mortgagees seek to reduce the property to possession by replevin under a clause giving them this right whenever they should feel themselves insecure, they must sue jointly, as they are joint owners/’ (§ 49, and cases cited; Noyes v. Barnet, 57 N. H. 605.) But while the counsel for Maddox admit that Gaddis could intervene in an action for the foreclosure of this mortgage, they assert that this suit is founded on the official misconduct of Rader, and that their client is the first party who is entitled to exhaust the penalty of the bond. The twenty-fourth section of the Code of Civil Procedure is applicable to this branch of the controversy: “ Any person may, before the trial, intervene in an action or proceeding, who has an interest in the matter of litigation in the success of either of the parties, or an interest against both. An intervention takes place when a third person is permitted to become a party to an action or proceeding between other persons, either by joining the plaintiff in claiming what is sought by the complaint, .... or by demanding anything adversely to both the plaintiff and defendant, and is made by complaint setting forth the grounds upon which the intervention rests, filed by leave of the court.” Mr. Pomeroy reviews the authorities upon the subject, and concludes: “The inter-venor’s interest must be such that, if the original action had never been commenced, and he had first brought it as the sole plaintiff, he would have been entitled to recover in his own name to the extent at least of a part of the relief sought.” (Pomeroy on Remedies, § 430.) If the sheriff had performed his duty, and sold the property of Kinyon for cash, the respondents would have been jointly interested in the proceeds. But under the circumstances attending the case, their sole remedy is against the appellants, and in the absence of an agreement of the mortgagor and mortgagees, or a statute providing therefor, we do not think that the mere commencement of the action by Maddox secured a prior lien upon the bond of Rader. The court below committed no error in allowing Gaddis to intervene and file his complaint under the provisions of the Code of Civil Procedure, supra.

Legal interest was computed upon the penalty of the bond of the sheriff from the time the demand was made for the payment of the money which was found to be due to the respondents, and the appellants remark, in passing, that this action is erroneous. The case of Jefferson County v. Lineberger, 3 Mont. 246, was brought upon the official bond of a county treasurer to recover a certain amount. This court held that it was the duty of the principal and his sureties to pay the sum for which this officer was liable when he was in default; and that, upon their failure and refusal so to do, the county could institute an action, and collect interest under the laws of the Territory. (Comp. Stats, div. 5, § 1237.) The amount of the penalty in the bond sued on does not limit the responsibility of the sureties in this action. (2 Sutherland on Damages, 15, n., and cases cited.) It is therefore ordered and adjudged that the judgment be affirmed, with costs.

De Wolfe, J., concurs.