Indemnity Ins. Co. v. Opdycke , 223 Iowa 502 ( 1937 )

I find myself unable to agree with the majority, and respectfully dissent.

The question is whether the two parties who signed the application were jointly and severally liable, or simply severally liable. Whatever liability there is in this case depends upon the construction of this application. Here we have a record which shows that L.L. Opdycke received the purchase price which was paid to the referees, and the money which he expended was expended without the authority and knowledge of Koehler. The only amount that Koehler received out of this payment was the sum of $50, and this amount was repaid. So we have a record in which we have two referees, one of whom did not receive any of the money, and the other expended without authority certain sums. The question is, are both referees liable? Or, is the referee who expended the money individually liable?

In the case of McArthur v. Board, 119 Iowa 562, at page 564,93 N.W. 580, the late Justice Weaver, speaking for the court, said:

"Individual cases depend so much upon the peculiar wording of the contracts under consideration and the peculiar circumstances and relations of the parties, that they are of limited value as precedents, and we think it unnecessary to go into any extended review of those which have been cited in argument. They are all in harmony with the proposition we have above stated that the intention of the parties, if it can be gathered from the language employed and the circumstances indicated by the contract as a whole, must be our guide in determining the extent of the liability thereby incurred."

In the recent case of Licht v. Klipp, 213 Iowa 1071, on page 1074, 240 N.W. 722, 724, Justice Kindig said:

"Whether a contract is joint or several must be determined by the terms thereof, viewed in the light of the attending circumstances, and the practical, mutual construction, if any, placed thereon by the parties. Shively v. Globe Mfg. Co.,205 Iowa 1233, 219 N.W. 266."

And so in the case at bar, was it the intention of the parties to bind both parties? Did Koehler agree to act as surety for Opdycke, and did Opdycke agree to act as surety for Koehler? No person can be bound for the acts or omissions of another unless he can be said to have so contracted. Koehler had nothing to do with the appointment of Opdycke, and Opdycke had nothing to do with the appointment of Koehler. They were appointed by an order of the court, and they were acting as officers of the court. What did Koehler agree to do? To make good any shortage that was due to the failure of Opdycke to account for money that came into his hands? No, what Koehler agreed to do was to account for any moneys that came into his hands. They were co-referees. This is shown by the fact that they filed separate reports. When action was brought to recover the money Herman Koehler was not joined as a party; only Opdycke and the Indemnity Insurance Company of North America were joined.

The question of whether referees appointed in a partition action are jointly liable appears never before to have been decided by this court, and the distinguished and able counsel representing both parties in this action have been unable to cite us authorities from other courts.

What Koehler agreed to do when he signed the application, was to account for all of the funds that came into his hands as referee. He did not in that application say, nor did the Indemnity Insurance Company require him to say, "I will not only be responsible for all of the money for which I fail to account but I will also stand responsible for the sums of money for which my co-referee fails to account." If it had been the desire of the Indemnity Insurance Company to require that, they could very easily have placed it in the application, and before the issuing of the bond could have required Koehler to have agreed to it. Had he agreed, he would have been bound. But, before he can be held accountable for the failure of Opdycke to account for funds of which Koehler had no knowledge and which never came into his hands, and which he did not in any way default upon, there must be a clear showing that Koehler agreed to pay these sums to the Indemnity Insurance Company in case his co-referee defaulted.

Upon this record, certainly, it cannot be held that Koehler ever intended to guarantee the conduct and fidelity of Opdycke.

In my judgment the Koehler Estate would be liable for only such amounts of money that Koehler misappropriated or failed to account for, and the lower court erred in entering judgment against the estate for the amount for which Opdycke failed to account. I would reverse the case.