PIEDMONT GROCERY COMPANY, Appt.,

V.

A. F. HAWKINS et al.

West Virginia Supreme Court of Appeals — January 21, 1919.

(W. Va., 98 S. E. 152.)

Attachment money misappropriated by officer.

1. An officer of a private corporation intrusted with its funds and property, who improperly converts the same to his own use, is guilty of "fraudulently contracting a debt" or "incurring a liability" to such corporation, which will be the basis of an attachment under the provisions of § 1 of chapter 106 of the Code of 1913 (§ 4455).

[See note on this question beginning on page 832.]

they should be joined in the conjunctive; but, where only one ground of attachment is relied upon, and two or more phases of the same fact which constitutes such ground are stated, the joining of such different phases in the disjunctive will not invalidate the attachment affidavit.

[See 2 R. C. L. 833.]

- quashing.

5. An attachment sued out upon the eighth ground given by § 1 of chapter 106 of the Code of 1913 (§ 4455), that the defendant fraudulently contracted the debt or incurred the liability for which the action or suit is about to be, or is, brought, will not be quashed because the attachment affidavit states that the debt was fraudulently contracted or the liability incurred. This is but the declaration of two phases of the same fact which constitutes the basis of the attachment. [See 2 R. C. L. 833, 834.]

APPEAL by plaintiff from a decree of the Circuit Court for Mineral County sustaining a demurrer to the bill and motion to quash the attachment in a suit for the recovery of a claim or debt alleged to have been fraudulently contracted or incurred. Reversed.

The facts are stated in the opinion Mr. Harry G. Fisher, for appellant: The court erred in quashing plaintiff's attachment.

Laidley v. Laidley, 25 W. Va. 525; McKinsey v. Squires, 32 W. Va. 41, 9 S. E. 55; Nelson v. Phares, 33 W. Va. 285, 10 S. E. 398; Ammons v. South Penn Oil Co. 47 W. Va. 625, 35 S. E. 1004.

The action is one of contract. Wilson v. Dawson, 96 Va. 687, 32 S. E. 461; Mabie v. Moore, 75 W. Va. 766,

of the court.

84 S. E. 788; Royce v. Oakes, 20 R. I. 418, 39 L.R.A. 845, 39 Atl. 758; Riley v. LaRue, 20 R. I. 426, 39 Atl. 753; V. P. Randolph & Co. v. Walker, 78 S. C. 164, 59 S. E. 856; Larson v. Dawson, 24 R. I. 326, 96 Am. St. Rep. 716, 53 Atl. 93; Jewett v. Ware, 107 Va. 802, 60 S. E. 131.

Hawkins fraudulently contracted the debt and incurred the liability which is the basis of this suit.

Crandall v. Bryan, 5 Abb. Pr. 169;

(— W. Va. —, 98 S. E. 152.)

4 Words & Phrases, 3527; Miller v. White, 46 W. Va. 69, 76 Am. St. Rep. 791, 33 S. E. 332.

Embezzlement is a ground for attachment, and such attachment may be sued out in a court of equity for a debt or claim, legal or equitable.

Çole v. Aune, 40 Minn. 80, 41 N. W. 934; Little v. Dyer, 138 Ill. 272, 32 Am. St. Rep. 140, 27 N. E. 905; Re Lambie, 94 Mich. 489, 54 N. W. 174; State v. Georgia Co. 112 N. C. 34, 19 L.R.A. 485, 17 S. E. 10; Dunsmoor v. Furstenfeldt, 88 Cal. 522, 12 L.R.A. 508, 22 Am. St. Rep. 331, 26 Pac. 518; Stiff v. Fisher, 2 Tex. Civ. App. 346, 21 S. W. 291; Rhodes v. O'Farrell, 2 Nev. 60; Fisher v. Consequa, 2 Wash. C. C. 382, Fed. Cas. No. 4,816; United States v. Colt, Pet. C. C. 145, Fed. Cas. No. 14,839; Mabie v. Moore, 75 W. Va. 766, 84 S. E. 788.

Mr. F. C. Reynolds also for appellant.

Mr. Arthur Arnold, for appellee

Equityjurisdiction.

therefor, sue out an attachment and prosecute a suit in equity. If, however, his cause of action is one upon which he must sue in tort, equity will not have jurisdiction. The defendant insists that the cause of action set up in the bill is one ex delicto, while the plaintiff asserts that it is in its nature ex contractu. The charge in the bill and in the attachment affidavit is full and complete as to the items of money and property appropriated by the defendant, and it seeks to recover a judgment for the amount of money so appropriated and the value of the property. It is contended by the plaintiff that this is purely an action on contract; that when the defendant received into his custody money or property of the plaintiff, as its officer, there was an implied contract that he would account for the same and return it when required so to do; and that his failure to do this renders him liable in an action for money had and received. For the defendant it is contended that, inasmuch as the allegations are that he is guilty of a criminal offense in converting this money and property to his own use, his acts are necessarily wrongful acts, and that the suit is no more than an action for damages for his wrongful conduct. It seems to be very clearly established by the authorities that for money misappropriated, or even

Assumpsitmoney wrongfully appropriated.

་

for money stolen, an action of assumpsit for money had and received is the appropriate remedy. An act of misappropriation in the case of one intrusted with funds in an official or fiduciary capacity raises an implied obligation on his part to repay such funds, and even where money has been stolen it is uniformly held that the owner of the money may sue in assumpsit to recover the same. In Cooley on Torts, § 109, the author says: "No question is made of this doctrine, where, as a result of the tortious act, the de

fendant has come into possession of money belonging to the plaintiff. The law will not permit him to deny an implied promise to pay this money to the party entitled."

This text is fully supported by the authorities cited in the note. In the case of Walker v. Norfolk & W. R. Co. 67 W. Va. 273, 67 S. E. 722, this court held that an action of assumpsit would lie against one who appropriates the property of another to recover the value thereof. In that case the plaintiff, a contractor, left a pump stored temporarily on the right of way of the defendant, and the defendant appropriated this pump to its own use, and a recovery for the value thereof in an action. of assumpsit was allowed. Many cases might be cited to support the doctrine that for money wrongfully converted or stolen an action of assumpsit will lie to recover against the wrongdoer. Gould v. Baker, 12 Tex. Civ. App. 669, 35 S. W. 708; Howe v. Clancey, 53 Me. 130; Shaw. v. Coffin, 58 Me. 254, 4 Am. Rep. 290; Spencer v. Towles, 18 Mich. 9; Beardslee v. Horton, 3 Mich. 560; Royce v. Oakes, 20 R. I. 418, 39 L.R.A. 845, 39 Atl. 758; Downs v. Baltimore City, 111 Md. 674, 41 L.R.A. (N.S.) 255, 76 Atl. 861, 19 Ann. Cas. 644. The fact that the defendant may be guilty of a criminal offense in misappropriating the fund sought to be recovered in no way changes his civil liability to the plaintiff. If there were no statute making the misappropriation of these funds criminal, could it be doubted for a moment that there was an implied contract to repay them? The defendant would stand in no different position from the man who had borrowed money from another with an express promise to repay it. The law will not permit him to secure the funds of another in his capacity as agent, and then use them for himself, without also raising a promise upon his part to repay. We are clearly of opinion. that the cause of action set up in

Attachmentmoney misappropriated by officer.

(W. Va., 98 S. E. 152.)

this case is one ex contractu, and such as gives jurisdiction to a court of equity to entertain a suit under the provisions of § 1 of chapter 106 of the Code, where an attachment is sued out upon sufficient grounds.

But the defendant insists that no ground for the attachment sued out in this case is shown by the affidavit, and, further, that the affidavit is fatally defective. The affidavit was sued out upon the eighth ground specified in § 1 of chapter 106, and that is that the defendant fraudulently contracted the debt or incurred the liability for which the action or suit is brought. His contention is that the conversion of this money to his own use, he having come into possession of it lawfully, does not make him guilty of any fraud in incurring the liability or contracting the debt set up in the bill. It is quite true that, so far as the funds embezzled are concerned, they came into the possession of the defendant lawfully; so far as the goods appropriated by him to his own use are concerned, this cannot be said. The allegation in this regard is that he abstracted certain goods from the store of the plaintiff, used them himself, and charged the value thereof to various customers of the plaintiff, seeking in this way to conceal his own misconduct. can the fact that he secured possession of the funds lawfully make any difference? So long as he retained the lawful possession of them as an officer of the company, there was no cause of action against him. The cause of action set up in this case arose when he appropriated these moneys to his own use, and can it be said that the deliberate taking of another's funds held for a particular purpose, and applying them to an entirely different purpose, is not a fraudulent act? It seems to us that this is clearly fraudulent. The defendant cites the case of Goss v. Boulder County, 4 Colo. 468, in support of his contention, and that case does in a measure lay down the

But

doctrine contended for by him; but a reading of it shows that the decision is largely based upon an entirely different proposition. In that case the party from whom the money was sought to be recovered was not a direct agent of the plaintiff, but was an employee of the treasurer of the plaintiff, and the court held that the extent of the plaintiff's rights were fixed by its contract with the treasurer, and recovery on the treasurer's bond was the appropriate remedy for it to pursue. We are not prepared, however, to approve the doctrine laid down in that case that, where a deputy or employee of the treasurer misappropriates funds intrusted to him as such employee, the owner of such funds cannot sue in an action for money had and received to recover a judgment for the same. In the case of Downs v. Baltimore City, supra, it is held that the wrongful conversion of funds by an officer constitutes fraudulently contracting an obligation which will sustain an attachment, and the reasoning of the court in that case seems to us to be entirely sound. Many cases are cited in support of the text at page 78 of 6 C. J. holding that attachment lies for goods or money embezzled or stolen, or obtained by other species of fraud. The doctrine of that text is also authority for the proposition that an action of assumpsit is an appropriate remedy in such case.

The remaining ground for quashing the attachment is that the statement, "fraudulently contracted the debt," is joined in the disjunctive with the statement, "incurred the liability." Does this make the attachment affidavit bad? It is quite true that, where inconsistent or separate grounds of attachment are joined in the same affidavit, they must affidavitbe joined in the conjunctive, for the reason that if the disjunctive is used the defendant is not apprised of which one of the grounds is relied upon; and then, too, the affidavit may be said not to

different causes.