202 Wis. 305 | Wis. | 1930
On the 13th day of March, 1922, the Farmers & Merchants Bank of Ashland, Wisconsin, being in financial difficulties, entered into a contract with the Northern National Bank of Ashland whereby it transferred to the said Northern National Bank all its assets, the latter agreeing to pay all of its debts. In addition to this, a bond for $125,000, running to the Northern National Bank, signed by the directors of the Farmers & Merchants Bank, was required by the terms of the agreement and was executed by said directors. By the terms of this bond it was to become void in the event that the Northern National Bank would be able to pay all of the obligations of the Farmers & Merchants Bank out of the assets of the latter bank within two years. At the end of two years the amount realized on the assets
This action was brought for contribution, Antoinette Schlecht, Paul Binsfield, and M. E. Dillon uniting as plaintiffs, against the other sureties. The defendant Lew Anderson demurred to the complaint. The demurrer was overruled. He thereupon answered and, after answering, appealed from the order overruling his demurrer. This appeal was dismissed on the ground that by answering he waived his right to appeal from the order overruling the demurrer. Schlecht v. Anderson, 197 Wis. 556, 222 N. W. 802. The case was treated as an equitable action, was tried before the court, findings of fact were made, the amount of contribution to which each plaintiff was entitled was ascertained, and judgment was rendered in favor of those entitled to contribution. From that judgment Lew Anderson brings this appeal.
The first assignment of error is that the court erred in overruling appellant’s demurrer to the complaint. Under sec. 274.34, Stats., we may now review that order in so far as it “involves the merits and necessarily affects the judgment.” There were three grounds of demurrer: (1) that
It is urged that the complaint fails to state a cause of action because it contains no allegation that the Farmers & Merchants Bank was insolvent, it being claimed that a surety cannot recover contribution from his co-sureties unless he is unable to recover from his principal. While it is settled' in this state that such an allegation is not necessary in an action at law, whether it is necessary in an equitable action seems to be an open question. American Exchange Bank v. Lake Motor Co. 195 Wis. 304, 218 N. W. 590. However, we are now considering the question after judgment, and the proof not only demonstrated but the court found that the Farmers & Merchants Bank was an insolvent institution. So the lack of this allegation in the complaint does not necessarily affect the judgment. Whatever deficiency there was in the complaint has been supplied by the proofs, and the judgment has a firm foundation in this respect.
The other grounds of demurrer raise the question of whether the plaintiffs were properly united and whether their various causes of action were properly joined in this action. In view of the fact that the judgment correctly determines the rights of the various parties to this original bond, it might well be said that the judgment will not be disturbed even though the proceedings leading up to its final rendition were somewhat irregular. As was said in discussing the question of whether the complaint stated facts, sufficient to constitute a cause of action, the other grounds of the de
It is further contended that the court erred in striking out portions of the defendant’s answer. Such portions so stricken contained allegations that the insolvency of the Farmers & Merchants Bank, if it was insolvent, was due to the mismanagement and improper conduct of the plaintiffs M. E. Dillon and F. X. Schlecht, of whose estate the plaintiff Antoinette Schlecht is administratrix, as members of the loan committee. Plainly such allegations constituted no defense to this action. It matters not what caused the insolvency of the bank. The fact remains that after the bank became insolvent the defendant joined with the other parties to this action in a bond to the Northern National Bank to secure said bank in its assumption of the liabilities of the Farmers & Merchants Bank. Hé is liable to the bank on that bond and, if he has not paid his just proportion, he is liable to his co-sureties who have paid more than their just share. His liability is on an obligation voluntarily assumed by him after the bank had become insolvent. The fact that the bank had become- insolvent through the mismanagement of some of his co-obligors gave him, as a stockholder of the bank, no cause of action against them. Such a cause of action belonged to the bank. Because of that
Other allegations are to the effect that the Northern National Bank had not efficiently administered the assets of the Farmers & Merchants Bank, and that through the mismanagement of the Northern National Bank the amount realized from the assets of the Farmers .& Merchants Bank has not been so much as would have been secured by proper management. Whether under any circumstances this would constitute a defense in an action for contribution we are not called upon to consider, because by the agreement of April 12, 1924, it is specifically agreed by the appellant that said Northern National Bank “shall not be answerable for any act, default, neglect, or misconduct of any of its agents, employees by it appointed or employed in connection with the execution of the terms of this contract to be by it executed, or in any way answerable or accountable under any circumstances whatever, except for gross neglect or wilful misconduct.” Whatever degree of skill, ability, or efficiency the Northern National Bank was required by the terms of the original agreement to exercise in liquidating the affairs of the Farmers & * Merchants Bank, the appellant here expressly stipulates that it shall not be “answerable or accountable under any circumstances whatever, except for gross neglect or wilful misconduct.” No delinquency of that character on the part of the Northern National Bank is alleged by appellant in his answer, and by the stipulation quoted it seems plain that the appellant himself has released the Northern National Bank for any lapses or delinquencies of a lesser character.
Another allegation stricken out is to the effect that there is “due from the stockholders of said bank $50,000 by reason of their statutory liability, but no attempt has been
Another allegation the striking of which is complained of, is to the effect that there has been no accounting between the State Bank and the National Bank, and that the defendant is unable to state the amount collected from the assets of the State Bank by the National Bank; that he is interested in said accounting as a stockholder in said State Bank and as a party to the bond, in that the State Bank is primarily liable thereon, and the extent of the liability of the sureties cannot be ascertained until an accounting of the trust by said National Bank is had. The defendant agreed in the agreement of April 12th that the account due the National Bank was as therein stated. True, it was provided in the agreement that the amount so stated was subject to audit. This entitled any one interested to an audit or an accounting of the amount realized by the National Bank from the assets of the State Bank. Prior to the commencement of this ac
One allegation in the answer was stricken out which perhaps is of a little greater dignity than the others already considered. That allegation is “that at a meeting of the directors held a short time prior to the sale of said bank, it was stated by Dillon and Schlecht in the presence of Bins-field, to all of said directors including this defendant, that there was personal liability on the part of each and every director to the depositors and creditors of said bank, and this defendant believed and relied on such statements, which were untrue so far as he was concerned; that when he signed the guaranty of $125,000 to Northern National Bank, it was on account of said false statements and information.” Obviously if the defendant was induced to sign the bond by reason of false representations made by the one who seeks contribution from him, such fact should be a defense to an action by the one who thus fraudulently induced him to sign the obligation. However, so far as this allegation reveals, the misrepresentation was one purely of law. No misrepresentation of fact is alleged. The appellant was a member of the board of directors, and any facts upon which such liability could be predicated were presumably within his knowledge. While under some circumstances a misrepresentation of law may constitute actionable fraud, such is hot the general rule, and this allegation does no'f fall within the exception. 12 Ruling Case Law, pp. 295 and 296. We hold that
It is further contended that the agreement of April 12, 1924, constituted an accord and satisfaction and released the sureties. It will serve no good purpose to recite the provisions of this agreement. Suffice it to say that in our opinion the agreement is susceptible ter no such construction, and that such was far from its purpose. Its purpose was not to release the obligors on the bond, but was to extend them favors and accommodations in the matter of meeting their obligations under the bond. The intent to continue the obligations of the bond on the part of all parties is plain and unambiguous. We find no error in the record.
By the Court. — Judgment affirmed.