Ayers v. Hite

34 S.E. 44, 97 Va. 466, 1899 Va. LEXIS 61
Supreme Court of Virginia·Decided September 27, 1899·Published·Cited by 4 cases

Opinion

Cardweel, J.,

delivered the opinion of the court.

This is an appeal from a decree of the Circuit Court of Augusta county, in the suit of Hite’s Adm’r v. Hite’s Infants, for many years pending in that court, and the sole question presented is whether or not the appellant, R. M. Ayers, as surety for William E. Craig, appointed a receiver or commissioner of the court by its decree of November 20, 1875, to collect certain funds due from purchasers of real estate in the cause, is liable for other funds received by Craig as receiver or commissioner of the court under a decree subsequent to that of November 20, 1875. The decree of November 20, 1875, so far as it has any bearing upon the question before us, is as follows:

“ It being suggested that N. K. Trout, who was appointed by decree of June 19, 1873, herein, to collect the land bonds of Jacob S. Long and George Siple, is dead, leaving a portion of said bonds uncollected, it is ordered and decreed that W. E. Craig, who is hereby appointed a receiver in his stead, do collect the balance of purchase money due from said Long and Siple, and disburse the same as per directions of decree of June 19, 1873, herein, after having executed and filed with the clerk of this court a bond, payable to the Commonwealth of Virginia, in the penalty of $5,000, conditioned for the faithful discharge of his duty under’ this and all future orders of this court in this cause.”

Craig, on the 22d of Hay, 1876, with. Ayers as his surety, executed and filed with the clerk the bond required of him under [468] the decree of November 20, 1875, and the conditions of the bond conform to the requirements of the decree.

N. K. Trout having died before disbursing $4,408.87 of the various funds collected as the former receiver or commissioner of the court in said cause, the court, by its decree of June 23, 1876, decreed that Trout’s administrator pay to Craig, as receiver, the said sum of $4,408.87, with interest, and further directed Craig to collect of J. H. Grove and B. E. Clemmer $775.85, with interest, due from them to the fund in the cause, but no bond was required of Craig for the faithful discharge of his duties under this decree. Craig collected these sums of Trout’s administrator, and of Grove and Clemmer, as well as the balance due on the bonds of Long and Siple, and while he had disbursed the funds collected of Long and Siple as directed by the decree of November 20, 1875, and subsequent decrees relating to the Long and Siple bonds, he was in default, at his death in 1897, to the amount of about $4,000 of the funds collected by him under the decree of June 23, 1876. Ayers having, upon his own motion, been made a party to the cause of Hite’s Adm’r v. Hite’s Infants, the court, by its decree of June 3, 1898, held that the bond executed by Craig as receiver in the cause, with Ayers as his surety, under decree of November 20, 1875, “by every reasonable implication,” should be held to cover the duties of the receiver, not only in regard to1 the money directed to be collected by him under that decree, but all moneys that may have come into his hands under the decrees in the cause subsequent to said decree of November, 1875.

This decree, in effect, holds Ayers liable for the $4,000, with interest thereon from July 1, 1884, as to which Craig, receiver, defaulted, although the fund was received by him under the decree of June 23, 1876, and notwithstanding he had properly disbursed the funds received by him under the decree of November 20, 1875.

In this view we are unable to concur. “ Sureties stand upon [469] the letter of their contract. Their liability is always strictissimi juris.” Blanton v. Commonwealth, 91 Va. 1; McCulskey v. Cromwell, 1 Kernan, 598; and Smith v. United States, 2 Wall. 237.

“ Xothing can be clearer, both upon principle and authority, than the doctrine that the liability of the surety is not to be extended, by implication, beyond the terms of his contract. To the extent, and in the manner, and under the circumstances pointed out in his obligation, he is bound, and no further. It is not sufficient that he may sustain no injury by a change in the contract, or that it may even be for his benefit. He has a right to stand upon the very terms of his contract; and if he does not •assent to any variation, and the variation is made, it is fatal. And courts of equity, as well as of law, have been in the constant habit of scanning the contracts of sureties with considerable strictness.”

The undertaking of the surety is to receive a strict interpretation, and is not to be extended beyond the fair scope of its terms. Miller v. Stewart, 9 Wheat. 680; Blair v. Perpetual Ins. Co., 47 Am. Dec. 129; Strawbridge v. B. & O. R. Co., 74 Am. Dec. 541; Pickering v. Day, 95 Am. Dec. 291; Lafayette v. James, 92 Ind. 240 (47 Am. Hep. 140); 24 Am. & Eng. Enc. L. 749; Murphy on Official Bonds, sec. 629.

In the light of the foregoing principles, too well settled to admit of discussion, let us examine the bond in question, and the decree under which it was executed.

The bond, as we have said, is conditioned in accordance with the terms of the decree under which it was taken, and the decree •specified the duty to be performed by Craig, the receiver, and that was to collect and disburse the balance due on the land bonds of Long and Siple. The amount of the balance then due on these bonds was about, as is conceded, $2,200, and the penalty of the receiver or commissioner’s bond required is $5,000, while the amount collected by Craig under the subse[470] quent decree was nearly $8,000. True, the bond taken under the decree of November 20, 1875, signed by Ayers as surety; contained the condition that Oraig should faithfully discharge his duty under that and all future orders of the court in the cause; hut can the language, by any just, fair, and reasonable construction, be taken as referring to any duty that might thereafter be imposed upon Oraig as receiver or commissioner of the court not pertaining to the specific funds he was directed to collect and disburse? Hoes not such an interpretation as that extend the liability of the surety beyond the fair scope of the terms of his contract?

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Ayers v. Hite, 34 S.E. 44, 97 Va. 466, 1899 Va. LEXIS 61 (Va. 1899).

34 S.E. 44 (Ayers v. Hite) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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