Court Opinion

ID: 7067618
Source: CourtListenerOpinion
Date Created: 2022-07-24 07:28:29.449291+00
Date Added: 2024-06-11T16:12:28.525313
License: Public Domain

On Petition for Rehearing.
Caldwell, J.
It is not held by the original opinion that the insolvency of appellees’ employers is essential in order that the former may appeal to the equitable doctrine of subrogation. The absence of an allegation of insolvency is mentioned merely by way of illustration in calling attention to the fact that the complaint reveals no reason why it is necessary to invoke that doctrine, in order that appellees may be protected, and that their rights may be fully en*312forced. By outlining some of the circumstances in which; if existing, appellees might possibly through subrogation maintain an action .against appellant for the value of their services, we should not be understood as excluding others. That it is difficult to circumscribe specifically all the situations to which the principle of subrogation may be applied is thus expressed: “ ‘The doctrine of subrogation is not administered by courts of equity as a legal right, but the principle is applied to subserve the ends of justice and to do equity in the particular case under consideration.- * # * No general rule can be laid down which will afford a test in all cases for its application. Whether the doctrine is applicable in any particular case depends upon the peculiar facts and circumstances of such case.’ ” Aultman v. Bishop (1898), 53 Neb. 545, 74 N. W. 55.
7. The complaint here merely discloses that certain citizens of Michigan City, their names and how numerous not being alleged, were justified in employing appellees to audit the financial books of that city; that appellees did the work under such employment, and that under the facts they would be entitled to recover from their employers either the value of such services, or at the contract rate if there was a contract on that subject as insisted by such citizens, but denied by appellees, and that thereupon such citizens would be entitled to recover from the city their reasonable costs and expenses incurred. The complaint discloses no reason why appellees may not fully and expeditiously recover all that is due them by proceeding on the contract of employment. As we have said, the complaint is entirely silent on the subject of subrogation. It contains no *313facts invoking that or other equitable doctrine, unless the facts above outlined are sufficient to that end, and we do not believe that they are. The action when measured by the complaint is merely át law for the recovery of a money judgment. The pleader apparently undertook to state a cause of action against the' city and in favor of appellees by certain allegations, to the.effect that the city through certain officials approved of the work being done by appellees, and directed them in doing it. It is not contended in this court that such allegations make the complaint good as stating a cause of action at law against the city, or that such allegations strengthen the complaint on the theory of subrogation.
In the original opinion we called attention to the fact that the members' of the citizens’ committee were not parties to the proceeding as indicating somewhat that subrogation is not the theory of the complaint. We should not, however, be understood as holding that under all circumstances the person to whose rights another seeks to be subrogated is a necessary party in a proceeding to that end. In 37 Cyc, at page 388, it is said that the right of subrogation, being equitable in its nature, cannot be enforced in proceedings to which those whose equities are affected are not parties, and in 20 Ency. PI. and Pr., page 997, that as a general rule a court of equity will not make an order of subrogation without having before it all the parties that may be affected by the operation of such order. For illustrative and somewhat conflicting cases, see the following: Bond v. Montgomery (1892), 56 Ark. 563, 20 S. W. 525, 35 Am. St. 125; Wilkins v. Gibson (1901), 113 Gra. 31, 38 S. E. 374, 84 Am. St. 206; Aultman v. Bishop, supra; Hill *314v. Ritchie (1916), 90 Vt. 318, 98 Atl. 497, L. R. A. 1917A 731; Fridenburg v. Wilson (1883), 20 Fla. 359, 367.
In each of the following there was an order of subrogation to a discharged'claim, the former claimant not being a party to the proceeding: Spaulding v. Harvey (1891), 129 Ind. 106, 28 N. E. 323, 13 L. R. A. 619, 28 Am. St. 176; White River School Tp. v. Dorrell (1900), 26 Ind. App. 538, 59 N. E. 867; Neptune v. Tyler (1895), 15 Ind. App. 132, 41 N. E. 965.
11. As we have said, the members of the citizens ’ committee under the facts alleged have ah inchoate - right of action against the city to recover expenses incurred in prosecuting an investigation of the books. Their claim, while perhaps incomplete until they have actually paid costs and expenses, has not been discharged. Assuming that by proper pleading appellees, on account of having performed services alleged, may by subrogation proceed against the city, the effect of the recovery would be to discharge the claim of the members of the committee. Such would be the effect of an oorder of subrogation. Moreover, the record here discloses that there is controversy between appellees and the members of the committee respecting the amount that the latter agreed to pay the former for such auditing work, or whether there was any agreement fixing the amount. If the former may be subrogated to the rights of the latter against the city, in no event could there be a recovery beyond the contract price. A recovery then by appellees against the city would not only in effect discharge the claim of the committee members against the city, but alsq determine such controversy. Under such circumstances it is our *315judgment that in the absence of some sufficient reason appearing, the members of the citizens’ committee are necessary parties to 'such a proceeding.
Petition for rehearing overruled.
Note. — Reported in 116 N. E. 434,119 N. E. 154.