Case ID: ohio-st_107/html/0009-01.html
Source: Caselaw Access Project
Author: {"author": "Robinson, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The State of Ohio v. The United States Fidelity & Guaranty Co. et al.
    
      Court of appeals — Jurisdiction—Appeal and error — Surety bond forfeited — Garnishment by attorney of indemnity deposit— Action by obligee against surety company — Petition in interpleader by bonding company.
    
    A bonding company obliged itself to C in tbe sum of $1,000 upon tbe bond of M, and M to indemnify the bonding company deposited with the bonding company the sum of $1,000. M made default. C brought an action against the bonding company to recover $1,000 upon the. bond; E brought an action against M to recover $500 for services and served notice in garnishment under the statute upon the bonding company. Service on M was secured by publication. Judgment was rendered by default. Thereafter the bonding company filed a petition in the nature of an interpleader against C, E and M, stating that it had the sum of $1,000 deposited with it by M, setting up the default judgment of E against M, and its obligation upon the bond of C; upon a hearing judgment was rendered in favor of C; E appealed the case to the court of appeals. Motion was made to dismiss the appeal. Held: That the right of action of C against the bonding' company was one at law; that the right of action of E against the bonding company, by virtue of the garnishment proceeding in the case of E against M, was also one at law; that the claims of C and E against the bonding company were not for the same thing or debt; that their claims had no common source; that the bonding company had an interest in the subject-matter and had incurred an independent liability to one of the claimants; and that therefore an action in interpleader was not maintainable, and although no demurrer was filed to the interpleader petition of the bonding company, and the trial court did proceed to hear and determine the issues between the parties, the character of the respective rights of action of E and C against the bonding company was not thereby changed from separate rights of action at law to a joint action in equity, and appeal did not lie from such judgment to the court of appeals.
    (No. 16929
    Decided March 14, 1922;
    and adhered to after rehearing, January 16, 1923.)
    Error to the Court of Appeals of Crawford county.
    The defendant in error, Peter McSorley, was confined in the jail of Crawford county, Ohio, under an indictment filed in the court of common pleas of that county. In order to induce the defendant in error, The United States Fidelity & Guaranty Company, to sign his bond in the sum of one thousand dollars to secure his. release from confinement, pending-trial, McSorley deposited with the defendant in error, The United States Fidelity & Guaranty Company, the sum of one thousand dollars. McSorley did not appear for trial and his bond was duly forfeited against him and against his surety, The United States Fidelity & Guaranty Company, and the following.entry spread upon the journal:
    
      “Monday, December 10th, 1917.
    
    
      1‘ This day, this cause came on for hearing in the above court, and it appearing to the court and the prosecutor, the attorney for the defendants, that said cause was set for trial for final hearing and determination. It appearing to the court that the defendant herein was not present in court as required by his recognizance herein, the said court thereupon ordered his recognizance or bondsman to appear in court. Thereupon the defendant being three times called to appear and answer said charge, as, he agreed to do, and failing- to do, and The United States Fidelity & Guaranty Company, as surety, being three times called to produce the body of the defendant, as it agreed to do, the court orders that the said recognizance be, and the same hereby is forfeited absolutely, in the sum and in the amount of Five Hundred Dollars, a remitter from the original bond of One Thousand Dollars having been made.
    “It is therefore ordered, adjudged and decreed that the said defendant, Peter McSorley, and the said recognizance or bondsman of the said defendant, Peter McSorley, be adjudged to owe according to the terms of the recognizance to the said County of Crawford, State of Ohio, the sum of Five Hundred Dollars, and the said O. W. Kennedy, as Prosecuting Attorney of the said County of Crawford, is ordered to institute such legal proceedings as may be necessary to recover from the said recognizance or bondsman, the said sum of Five Hundred Dollars aforesaid..
    “O. K. Daniel Babst, Judge.”
    
    Shortly thereafter defendant in error John Egan brought an action in the court of common pleas of Crawford county, Ohio, in which he sought to recover judgment in the sum of five hundred dollars for service rendered as attorney for McSorley.
    In this action defendant in error The United States Fidelity & Guaranty Company was made a garnishee, and filed an answer, wherein it stated that it had signed a bond, in the case of The State of Ohio against McSorley, in the sum of one thousand dollars, for his appearance, and that it had in its hands the sum of one thousand dollars, which had been placed with it by McSorley to indemnify it upon such bond; that the bond had been declared
    
      forfeited; that the state of Ohio has made demand upon it for the payment of the full amount of the bond; and that if it is compelled to pay the full amount of the bond the one thousand dollars deposited with it would be only sufficient for the purpose of its own protection.
    Service was had upon McSorley by publication. Thereafter, McSorley, being in default, the court rendered judgment in the sum of $500 against Mc-Sorley and in favor of Egan. The garnishee, The United States Fidelity & Guaranty Company, was ordered in that case to pay to the clerk of the court the sum of five hundred dollars.
    Thereafter, the state of Ohio brought an action in the court of common pleas of Crawford county to obtain a judgment against the defendant in error, The United States Fidelity & Guaranty Company, in the stun of one thousand dollars upon the bond, which cause is still pending.
    Thereafter, The United States Fidelity & Guaranty Company brought an action against Peter Mc-Sorley, John Egan and the state of Ohio in the nature of an interpleader, asking the court to require Peter McSorley, John Egan and the state of Ohio to set up their various claims to the sum of one thousand dollars, which it held as collateral security to indemnify it upon its bond, and tendered into court with its petition in interpleader the sum of one thousand dollars.
    In this case Egan filed a cross-petition, setting up the judgment recovered against McSorley in the sum of five hundred dollars. The state of Ohio, through its prosecuting attorney, filed an answer and cross-petition setting forth that it was entitled to the sum of one thousand dollars upon the bond. The cause was tried before the court of common pleas of Crawford county and the following findings of fact and law were made:
    “1st. That the evidence shows that the bond of the defendant, McSorley, was forfeited absolutely upon Ms non-appearance in court. 2nd, upon the forfeiture of said bond and the payment of his surety into court of the sum of $1,000.00 the said money was the property of the State of Ohio, and no part of it became, or was, the property of the defendant, McSorley, after such forfeiture was declared. 3rd, there being no money the property of McSorley, the suit and ancillary attachment proceedings of the defendant Egan, were of no effect. 4th, that the attempted remitter of the original bond was void and of no effect * # *.
    “It is therefore ordered and decreed by the court that the said sum of One Thousand Dollars ($1,000.-00) be paid to the defendant, the State of Ohio, as provided by law, subject to an allowance heretofore made to counsel for plaintiff for filing the petition of interpleader in this case * * *.
    “O. K. J. W. Wright, Judge.”
    
    Thereafter, Egan appealed the case to the court of appeals, and it was heard in that court, by agreement, upoBHfefee^Wdenee which had been adduced in the court below. Before judgment in the court of appeals a motion was made to dismiss the appeal for the reason that the cause was not appealable, wMch motion was overruled. The action is here to reverse the judgment of the court of appeals in overruling the motion to dismiss the appeal.
    
      
      Mr. Chester A. Meclc, prosecuting attorney, for plaintiff in error.
    
      Mr. R. V. Sears; Mr. J. W. McCarson and Messrs. Egan & Dels camp, for defendant in error.
   Robinson, J.

The appealability of this case is dependent upon whether the action is one at law or one in chancery.

The action here was instituted below by defendant in error The United States Fidelity & Guaranty Company, who was the surety upon the bond of Mc-Sorley and held the money of McSorley to indemnify it as surety.

The county of Crawford, in the name of the state of Ohio, was claiming that the United States Fidelity & Guaranty Company owed it the sum of one thousand dollars upon the bond it had executed to insure the appearance of McSorley at the time of the trial, but was not interested in, or making claim to, the particular one thousand dollars deposited with The United States Fidelity & Guaranty Company by Mc-Sorley, and indeed was not interested in what became of that deposit, and a case seeking a judgment upon tbe bond against The United States Fidelity & Guaranty Company was then and is now pending in the court of common pleas of Crawford county, the determination of which case is not dependent upon the ability of The United States Fidelity & Guaranty Company to retain all or any part of the one thousand dollars deposited with it by McSorley.

The defendant in error Egan, on the other hand, having a judgment against McSorley, and an order against The United States Fidelity & Guaranty Company directing it to pay to the clerk of the court five hundred dollars to be applied upon his judgment against McSorley, is interested in the particular thousand dollar deposited with The United States Fidelity & Guaranty Company by McSorley. Having secured no actual service upon McSorley, Egan’s judgment against McSorley is dependent for its validity upon, and to the extent of, the existence of money in the hands of The United States Fidelity & Guaranty Company due McSorley. The interests then of Egan and Crawford county in the fund have no common source, Crawford county having no interest therein other than to put itself in position to prevent the doctrine of estoppel being applied against its recovery upon the bond of The United States Fidelity & Guaranty Company. The source of its claim is the bond. The source of the claim of Egan is the judgment recovered against McSorley, dependent for service, and therefore for validity, upon the existence of a fund in the hands of The United States Fidelity & Guaranty Company belonging to McSorley. The only connection between the claim of Egan against McSorley and the claim of Egan against The United States Fidelity & Guaranty Company is by reason of the garnishment of The United States Fidelity & Guaranty Company in the ease of Egan against McSorley.

It will readily be seen then that there is no com-f mon source of title to the fund between Crawfordl county and Egan, for Crawford county has a right' of action against The United States Fidelity & Guaranty Company upon the bond, but no right to the particular fund deposited by McSorley, while Egan’s claim is against the fund with such right of action against The United States Fidelity & Guaranty Company, if any, as may be based upon the order against it in the garnishment proceeding. The right of action of Egan against The United States Fidelity & Guaranty Company is at law, and the right of action of the county of Crawford against The United States Fidelity & Guaranty Company is also at law.

An action in the nature of an interpleader does not lie in such case.

It is said in 4 Pomeroy’s Equity Jurisprudence (4 ed.), Section 1322, “from the whole course of authorities, it is clear that the equitable remedy of interpleader, independent of recent statutory regulations, depends upon and requires the existence of the four following elements, which may be regarded as its essential conditions: 1. The same thing, debt, or duty must be claimed by both or all parties against whom the relief is demanded; 2. All their adverse titles or claims must be dependent, or be derived from a common source; 3. The person asking the relief — the plaintiff — must not have nor claim any interest in the subject-matter; 4. He must have incurred no independent liability to either of the claimants; that is, he must stand perfectly indifferent between them, in the position merely of a stakeholder.”

It will be seen that the action by The United States Fidelity & Guaranty Company here under consideration violates each and every one of the essential conditions of an interpleader. It violates the first condition, for the reason that the claim of Crawford county is not upon the fund, but is upon the bond. The claim of Egan is upon the fund, and not upon the bond. It violates “2” because the claim of Crawford county is dependent upon and derived from the bond. The claim of Egan has no connection with the bond, but is a claim for services and is based upon a statutory garnishment of The United States Fidelity & Guaranty Company, and has to do with the existence or non-existence of an obligation, not of The United States Fidelity & Guaranty Company to Crawford county, but an obligation of The United States Fidelity & Guaranty Company'to McSorley. It violates “3” for the reason that the party asking the relief, The United States Fidelity & Guaranty Company, has a claim and interest in the subject-matter, to-wit, if it is required to respond upon the bond in the full sum of one thousand dollars it will still be confronted with the order of the court in the case of Egan v. McSorley. It has an interest as against Egan in an amount equal to the claim of Egan, for the rea*son that if it is required to respond in the full face of the bond, and also as garnishee, it will sustain a loss to the extent of Egan’s claim. It violates “4” in that The United States Fidelity & Guaranty Company by the execution of the bond incurred a liability to Crawford county in the sum therein named, and in so far as the record here discloses permitted the order against it in the case of Egan v. McSorley to stand unreversed, and does not now stand indifferent between Egan, McSorley and Crawford county.

In Story’s Equity Pleadings (10 ed.), Section 293, it is said: “Where the claimants assert their rights under adverse titles, and not in privity, and where their claims are of different natures, the bill is wholly unmaintainable.”

The doctrine, as enunciated in Pomeroy and Story, has been followed in the cases of Kyle v. Mary Lee Coal & Ry. Co., 112 Ala., 606; Northwestern Mut. L. Ins. Co. v. Kidder, 162 Ind., 382; Third Nat. Bk. of Boston v. Skillings, Whitneys & Barnes Lumber Co., 132 Mass., 410, and McFadden v. Swinerton, 36 Ore., 336.

The right of action of Egan against McSorley is, and was, one at law. The right of action against The United States Fidelity & Guaranty Company exists, if at all, by reason of the action at law by Egan against McSorley; and the statutory enactments authorizing the making of a garnishee liable, and the liability of the garnishee, are enforceable at law. The right of action of Crawford county against the United States Fidelity & Guaranty Company is one at law upon the bond.

Our attention has been called, to no Ohio statute which gives the defendant in error The United States Fidelity & Guaranty Company any right to maintain an action in interpleader against separate defendants having separate causes of action against it derived from different sources involving different issues, and each triable in an action at law.

The defendant in error The United States Fidelity & Guaranty Company, finding itself in the position of having on hand two separate cases at law, by different plaintiffs, involving different causes of action derived from different sources, and itself having an interest in the subject-matter and by its own act having incurred a liability to one of the claimants, cannot convert the two actions at law into one action in equity by the simple process of filing a petition in the nature of an interpleader; and, while no demurrer was filed in the trial court by either party, and that court took and retained jurisdiction and tried and determined in the same suit the rights of two different litigants having separate and distinct causes of action against the same party, nevertheless each of those actions, though tried together ih the same suit, retained their particular character as actions at law and were reviewable by the court of appeals only upon a petition in error.

The motion to dismiss the appeal in the court of appeals should have been sustained.

The judgment of the court of appeals will be reversed.

Judgment reversed.

Marshall, C. J., Johnson, Hough, Wanamaker and Matthias, JJ., concur.

On Rehearing.

This cause came on to be heard upon the transcript of the record of the court of appeals of Crawford county, upon rehearing, and was argued by counsel. On consideration whereof, this court is of opinion that ultimately it would be required to render the same judgment which it has heretofore rendered herein and that the ends of justice will not be served by prolonging the litigation.

It is therefore ordered and adjudged by this court that its former judgment herein be adhered to.

Former judgment adhered to.

Marshall, C. J., Wanamaker, Robinson, Jones, Matthias, Day and Allen, JJ., concur.