Board of Ed. v. Commonwealth

Opinion op the court by

Wm. Rogers Clay, Commissioner

— Reversing.

■These two appeals involve the same subject, and the parties thereto have agreed that they shall be considered and heard together. In 1907, in an action of Commonwealth of Kentucky, by Ora L. Adams, County Superintendent of Common Schools of Mercer County, v. D. C. Heath & Co., a judgment was rendered setting aside a, former judgment against D. C. Heath & Co., and requiring that company to pay to the common schools of Mercer county the sum of $10,-000, with interest. In December, 1908, D. C. Heath & Co. paid to W. I. Allin, county attorney, something over $12,000. This payment wlas made under the judgment referred to, which directed Allin to collect 1he judgment, and see that it was converted into the school fund of Mercer county. On January 29, 1909, appellant County Board of Education for Mercer County served notice upon W. I. Allin, county attorney, that on 'the 9th day of February, 1909, it would move the circuit court for a judgment against him for the sum then held by him. In the notice the facts upon which appellant relies were fully set out, and on riie day designated a motion was made for a rule requiring the payment of the money to appellant. Upon objection by the county attorney the court refused to grant the rule. From the order to this effect, the County Board of Education prosecutes the first appeal herein.

Some of the courts hold that, even in the absence of a statute, they have the power to compel an attorney to pay over to a client money collected by him. This summary jurisdiction to deal with such matters is found in the disciplinary power which the court has over attorneys as officers of the court. Anderson v. Bosworth, 15 R. I. 443, 8 Atl. 339, 2 Am. St. Rep. 910; Lynde v. Lynde, 64 N. J. Eq. 736, 52 Atl. 694, 58 L. R. A. 474, 97 Am. St. Rep. 962.

In this state express authority is given; by the-Civil Code of Practice for -such proceeding. Section 444 is as follows: “A judgment may be obtained, on motion, by a surety against his principal or co-surety for money paid; by a client against his attorney for money collected or property received; by a party, or officer against a surety for costs; and by a party against an officer for money collected or property received, and for the damages ■which such party is entitled to recover; and in all other cases .specially authorized by statute; and the service of the notice shall be regarded as the commencement of the proceeding.”

But it is insisted by appellee that the above provision has no application to this case, for the simple reason that the County Board of Education is in no sense a client of appellee. The original action of Commonwealth, etc., v. D. C. Heath & Cd., was brought by the commonwealth for the purpose of recovering into the ' common school fund of Mercer county the amount claimed to be due for violation of a bond executed by D. C. Heath & Co. to the commonwealth. The proceeding, while in the name of the commonwealth, was for the benefit of the common schools of the county. By virtue of the act of 1908 (Acts 1908, p. 133, c. 56), being section 4426a, Ky. St., the title to all school property, with the exception of that given to those districts not embraced by the provisions of the act, is vested in the county board of education. Thus the’ handling of the county school property and fund is placed in the county board of education, instead of the county school .superintendent. Any money due under the original' judgment is, therefore, due to the county board of education. By operation of law it now has become the real party in interest, and therefore appellee’s real client. Having the right to whatever money is coming to the common school fund, it should not be denied the right to proceed by rule to have the money turned over to it. While not appellee’s client in name, it is appellee’s client in every substantial respect.. We therefore conclude that appellant proceeded properly in asking a rule against appellee, and that the circuit court erred in refusing to grant the rule.

On February 2, 1909, appellee W. I. Allin, who was county attorney, filed a petition in the original ,suit of Commonwealth v. D. C. Heath & Co., asking the advice of the court as to the distribution of the sum of ¡about $5,000, which he claims was all that remained in his hands after the payment of the costs and expenses of the original litigation and after certain payments were made to certain school districts. On the 12th .day of February, and after the court had refused the rule asked for in the action ¡above considered, appellant filed a petition to be made a party to the suit of the Commonwealth, by, etc., v. D. C. Heath & Co. In this petition it alleged that it has charge and control of the schools of Mercer county, and that it is authorized and empowered to collect and disburse all money for the benefit of said schools. It ¡also charges that appellee Allin, as county attorney, holds the sum cf $12,133, collected by him as county attorney from D. C. Heath & Co., for the use and benefit of the common schools of Mercer county; that he has held said money since the 12th day of December, 1908, and failed and refused to pay it over to the petitioner. It asked judgment against Allin for the total amount received by him. To the filing of this petition Allin objected. The objection was sustained by the court, and the petition was not allowed to be filed. From the order refusing to permit appellant’s petition to be filed, and appellant to be made a party to the proceeding, the second appeal is prosecuted.

It is insisted by appellee that the action of the trial court was proper, because appellant had no right to come into the action and ask judgment over against him who was not a party to the proceeding. This position is not sound, for the reason that Allin had already filed an original petition in the above action, in which, he sought the advice of the court as to the distribution of the funds in his hands. He thus made himself a party to the action. Section 23, Civ. Code Prac., provides: “Any person may be made a. defendant who claims an interest in the controversy adverse to the plaintiff, or who is a necessary party to a complete determination of ' the question involved in the action.” Sec. 28 of the Code is as follows: ‘ ‘ The court may determine any controversy between parties before it, if it can do so without prejudice to others; if it cannot do so, it must require such other persons to be made pai'ties, or must dismiss the action without prejudice.” Here, then, we have a case where the county attorney voluntarily made himself a party to the proceeding by his original petition. Thereafter he would necessarily be bound by any orders which might be entered in .that action. As appellant’s petition to be made a party, and that it be taken as an answer and counterclaim against appellee, showed that there wa,s a question as to the amount of funds in'his hands due the common school fund, and as the law requires that whatever is due should be paid to the county board of education, the circuit court should have allowed appellant to be made a party to the action, so that the questions between it and the county attorney could be properly presented and adjudicated by the court-Having a right to whatever was due the common schools, the county board of education also had the right to contest the amount with appellee. As appellant was compelled to take this proceeding because of the failure of the court to grant the rule in the first proceeding, we are of the opinion that the court erred in refusing to permit appellant to> be made a party attorney by appropriate proceedings.

While, in our opinion, both methods of procedure adopted by appellant .are correct, it will not be permitted to proceed in both ways upon a return of these cases, but will be required to elect which method of procedure it will adopt. Upon the merits of the contest between appellant and ¡appellee we, of course, express no opinion. We only decide that appellant has a right to have the questions adjudicated in one or the other of the actions herein considered. When appellant elects, the appellee may, of course, present such defense as he may have.

The judgment in each case is reversed, and cause lemanded for proceedings consistent with this opinion.