Court Opinion

ID: 4009345
Source: CourtListenerOpinion
Date Created: 2016-07-06 11:09:30.631938+00
Date Added: 2024-06-11T13:57:05.441429
License: Public Domain

Action commenced May 27, 1940, by the Banking Commission of Wisconsin against Lester W. Rothe, principal, and the Royal Indemnity Company, a foreign corporation, surety, to recover for Rothe's breach of an official bond.  Summary judgment dismissing the complaint against the Royal Indemnity Company and allowing costs was granted.  Plaintiff appeals. *Page 530 
The principal facts are:  On November 1, 1932, Lester W. Rothe was appointed a special deputy commissioner of banking to assist in the disposition of the assets belonging to state banks in receivership.  The title of the position was changed in 1936 to senior statistician.  He was suspended July 12, 1939.  During his employment he had charge of the sale of stocks, bonds, and other securities held by the commission as statutory receiver for the delinquent banks.  Upon entering employment on November 1, 1932, Rothe was required under the provisions of sec. 220.08 (4), Stats., to execute and did execute an official bond in the exact form set out by sec. 19.01 (2).  Defendant Royal Indemnity Company was surety on that bond.  It provided as follows:
"We, the undersigned, jointly and severally, undertake and agree that Lester Wm. Rothe of Madison, Wisconsin, who has been appointed to the office of special deputy commissioner of banking, will faithfully discharge the duties of his said office according to law, and will pay to the parties entitled to receive the same, such damages, not exceeding ten thousand dollars as may be suffered by them in consequence of his failure so to discharge such duties."
Upon motion of the defendant Royal Indemnity Company the circuit court granted a summary judgment in its favor on the ground the action was barred by the statute of limitations.
In December, 1932, Rothe entered into an arrangement with one James S. Withington, a broker of Chicago, Illinois, to sell Withington the securities under his control at a price less than their actual or market value.  Withington and Rothe were to divide any profit realized upon a resale at market value.  Securities owned by seventy-one banks were disposed of under this plan.  Before Rothe's suspension but during the life of the bond which was from November 1, 1932, to December 12, 1933, $11,153.92 was gained and divided between him and Withington.  This scheme was not known by the Banking Commission until approximately August 1, 1939. *Page 531 
The court is of the opinion that the bond of the respondent is not a sealed instrument, but is equally divided on the question of whether the action is one for relief on the ground of fraud.  Mr. Justice FOWLER, Mr. Justice FRITZ, and Mr. Justice MARTIN are of the opinion that the action is one for relief on the ground of fraud, governed by sec. 330.19 (7), Stats., and that the judgment should be reversed.  Mr. Chief Justice ROSENBERRY, Mr. Justice WICKHEM, and the writer are of the contrary view and of opinion that the judgment should be affirmed.
Under the rule the judgment appealed from is affirmed.
By the Court. — Judgment affirmed.