United States Fidelity & Guaranty Co. v. Clarke , 190 Ga. 46 ( 1940 )

1. When a judgment awarding a fund in the custody of a court of equity to one of several lien claimants was reversed by this court, such claimant in whose favor the judgment was rendered is liable for interest on all or any part of the fund thereafter found to belong to one of the other claimants, where it appears that upon the rendition of the judgment he took possession and has had the use of the fund. Smith v. Phillips, 175 La. 198 (143 So. 47); Kenton v. First National Bank, 93 Ky. 129 (19 S.W. 185); Albers v. Norton Co., 147 Ky. 751 (145 S.W. 757); Whitall v. Cressman, 18 Neb. 508 (26 N.W. 245).

2. The amount of the fund in the custody of the court, which was raised by the sale of various pieces of property by the receiver and paid over under the judgment so reversed by this court, was not in dispute. The plaintiff (the party claiming interest) asserted a lien on all of the property represented by the fund, and the claim thus made was, as against the claimant to whom the fund was originally awarded, a liquidated demand, although by the answer of such claimant and the other defendants not only was the existence of any lien in favor of the plaintiff contested but it was asserted that such lien, if it existed, did not attach to a particular piece of the property.

3. The foregoing ruling is not altered by the fact that the party to whom the fund was originally paid, and against whom interest is sought, is a county. The county, having collected and used money which actually belonged to the plaintiff, is chargeable with interest the same as any other person would have been. See Hartley v. Nash, 157 Ga. 402 (121 S.E. 295).

4. Especially does it appear that interest should be allowed in this case, since, upon awarding the county the funds in satisfaction of its fi. fa. against Lamback and the personal sureties on his official bond, the court required by the same order that the personal sureties execute a bond to repay any amount of the fund that might thereafter be found to belong to the plaintiff surety company in the event of a reversal of the decree, with interest at seven per centum from that date (the time from which interest is claimed), and in all subsequent proceedings the personal sureties recognized their liability to the county by virtue of their bond. The personal sureties received the benefit of the award to the county, by virtue of the satisfaction of the fi. fa. held by the county against them, and were thereby relieved of interest on such fi. fa. from the date that the money was paid over to the county. The substantial legal effect of these facts and the order of the court is that the amount of the fund found to belong to the surety company (the decree awarding it to the county having been reversed by this court) drew interest from the date of the order awarding it to the county for the benefit of the surety company, with ultimate liability therefor in the personal sureties.

5. Where administrative costs are allowable out of a fund in the custody of a court of equity, the fixing and taxing of such costs is left to the discretion of the judge; and his action in such matters will not be disturbed unless it be a manifest abuse of such discretion. United States Fidelity Guaranty Co. v. Clarke, 187 Ga. 774, 794 (2 S.E.2d 608). It does not appear that in taxing administrative costs in the present case the judge has abused his discretion.

6. The decree entered by the judge in accordance with the direction given by this court when the case was formerly here was not erroneous for any reason assigned, except in the matter of interest, as to which we gave no direction and which he refused to allow. For this error the judgment must be

Reversed. All the Justicesconcur.

No. 13069. MARCH 12, 1940. REHEARING DENIED MARCH 29, 1940. STATEMENT OF FACTS BY REID, Chief Justice. W. E. Clarke served for several years in a clerical capacity in the office of George F. Lamback, treasurer of Richmond County. He succeeded Lamback as treasurer, and during his tenure gave several official bonds with the United States Fidelity Guaranty Company as surety thereon. It was discovered that he had embezzled considerable funds of the county, both while clerk for Lamback and while treasurer. The county issued an execution against Clarke and the surety company for his peculations while treasurer, as provided in the Code, § 23-1611, and this execution was paid off by the surety company and duly transferred to it by the county. Clarke and his wife executed a security deed to the personal sureties on the bond given by Lamback as treasurer, to save them harmless as to any liability that might be enforced against them because of Clarke's peculations while clerk for Lamback. The county also issued an execution against Fleming as administrator of the estate of Lamback, deceased, and the above mentioned personal sureties, for the shortage in Lamback's accounts (the result of Clarke's peculations while clerk) over the period covered by the bond executed by the personal sureties. This execution was levied on the property conveyed by the security deed of Clarke and his wife to the personal sureties, as the property of said sureties. The surety company filed in the superior court the present action, the purpose of which, as finally amended, was to subject the property contained in the security deed to the execution transferred to it by the county, to have set aside the levy made thereon under the execution issued against Lamback's administrator and his personal sureties; and for other relief. A receiver was appointed, and all of the property liquidated by sale. The case was submitted to the judge on an agreed statement of facts. He entered a decree to the effect that the surety company was not subrogated to the statutory lien of the county against the property of Clarke, and that by virtue of the security deed above mentioned the property was subject to the levy of the execution against Lamback's administrator and the personal sureties. He accordingly awarded to the county the amount of the fund left after payment of administrative costs. The decree further provided "that said sureties enter into an obligation with Charles B. Matheny, receiver in this case, to repay the said receiver the sum of $14,788.89, with interest at seven per cent. from the date of this order, in the event the decision in this case is reversed; and it is finally held, that the money paid to Richmond County, under this order, or any part thereof was improperly applied to the said execution against Lamback, etc., . . it being the purpose of this order that this obligation shall stand in the place of the funds now in the hands of the receiver." The surety company excepted, and the decree was reversed, this court holding that under the pleadings and the agreed statement of facts the surety company was entitled to the fund. United States Fidelity Guaranty Co. v. Richmond County, 174 Ga. 599. The county and the other parties defendant amended their answers and asserted a right in the county to the funds arising from the property, on the theory that the property had been purchased by Clarke with funds stolen from the county, and that the county could trace its funds into said properties as a trust fund. The amendment was allowed over objections of the surety company. At the trial the jury returned a verdict in favor of the county, and a decree was so entered. The surety company excepted to this decree and to the allowance of the amendment, and this court reversed the judgment allowing the amendment. United StatesFidelity Guaranty Co. v. Clarke, 182 Ga. 755 (187 S.E. 420). The defendants again amended their answers, and set up substantially that a certain parcel of property involved, known as the Highland Avenue property, was actually the property of Mrs. Clarke, and that accordingly the lien of the county to which the plaintiff was subrogated did not attach thereto. The judge allowed the amendments, and under an agreed statement of facts entered a decree in favor of the surety company for the amount of the funds arising from all of the property, with the exception of the Highland Avenue property, with interest from the date of the original judgment awarding the fund to the county, less certain administrative costs and an item of fees paid to the attorneys for the county. The case was again brought to this court, and the decree was reversed; but it was ordered that a final judgment be entered in favor of the surety company for the proceeds of all of the property, with the exception of the Highland Avenue property, less only such of the administrative costs (not including the attorney's fees) that the judge should in his discretion charge against such property. United States Fidelity c. Co. v.Clarke, 187 Ga. 774 (2 S.E.2d 608). This judgment was entered by the judge. Among other things, the surety company contends in the present writ of error that the judgment should have included seven per cent. interest on the amount so awarded, from the date the sum was turned over to the county, instead of only from the date of the judgment.