Brown v. American Surety Co. of New York

1925 OK 500, 237 P. 594, 110 Okla. 253, 1925 Okla. LEXIS 831
CourtSupreme Court of Oklahoma
DecidedJune 16, 1925
Docket15486
StatusPublished

This text of 1925 OK 500 (Brown v. American Surety Co. of New York) is published on Counsel Stack Legal Research, covering Supreme Court of Oklahoma primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Brown v. American Surety Co. of New York, 1925 OK 500, 237 P. 594, 110 Okla. 253, 1925 Okla. LEXIS 831 (Okla. 1925).

Opinion

Opinion by

FOSTER, O.

This appeal is prosecuted to reverse a judgment of the district court of Oklahoma county in an action wherein the plaintiffs in error were plaintiffs, and the defendant in error was defendant, and wherein the defendant in error obtained a judgment sustaining a demurrer, interposed by it, to the petition of the plaintiffs in error, and in, dismissing the action. Parties will be hereinafter referred to as they appeared in the trial court.

The plaintiffs sought to recover upon a judicial bond executed, in a garnishment proceeding, by the state of Oklahoma, as principal, against the American Surety Company of New York, as surety in said bond. The petition alleged, in substance, that on *254 May 24, 1920, the state of Oklahoma on relation of Fred Dennis, State Bank Commissioner, filed an action in garnishment in the district court of Oklahoma county against the plaintiff, X R. Brown, and, in support thereof, filed the usual garnishment affidavit and bond with the defendant, American Surety Company of New York, signing said bond as surety.

That in such proceeding, the proceeds of certain homestead property was impounded and later released by order of the district court, upon the ground that such proceeds were exempt to the defendant and his family under the laws of the state of Oklahoma, from which order, releasing such proceeds, the state of Oklahoma appealed to the Supreme Court of this state and gave its supersedeas bond with the defendant, American Surety Company, as surety therein, whereby the order releasing said exempt funds was stayed until some three years thereafter when the Supreme Court finally sustained the judgment of the trial court.

Both the garnishment and supersedeas bonds were in the usual form and copies thereof were attached to the plaintiffs’ petition as exhibits “A” and “B”.

It was .alleged that by the terms of said bond the defendant obligated itself to pay all damages, including attorneys’ fees, that the. plaintiffs might sustain by reason of said garnishment action and appeal, and damages consisting for the most part of attorneys’ fees and legal interest upon the funds impounded during the pendency of the appeal, in the. sum of $1,895.S2, were sought to be recovered, on both bonds. There is but one question presented, “Did the petition state a cause of action?”

It is no longer an open question in this state that the state of Oklahoma is not bound by the provisions of a general statute requiring a judicial bond of a plaintiff in an action, where the effect of such statute would be to restrict the rights of the state or to impose liabilities upon it, unless it is named in the statute expressly, or by necessary implication. Morris, Court Clerk, v. State ex rel. Walcott, Bank Commissioner, 88 Okla. 189, 212 Pac. 588.

• Our court said, quoting from the Morris Case,, supra:

' “If the state is not bound by section 4800, Rev'. Laws 1910, supra, and we hold that it is not, then the state was entitled to the order of delivery without executing the bond provided for. To hold otherwise would be to restrict the rights of the state and to affect its interests and make applicable to it a statute which was only intended to apply to its citizens. The state may proceed in its courts to enforce its rights and protect its interests without giving the bonds required of private litigants. This is one of the attributes of political sovereignty which attaches to the government.”

From a very careful examination of the case .iust cited, we think it apparent that our court recognized a rule of ancient origin, which rests upon the ground of expediency and public convenience, that laws are not ordinarily made for the state, but for its citizens, and that this rule was recognized by the Legislature in failing to include in the statute a provision expressly requiring the giving of a bond by the state.

It is argued, however, that although the state is exempt, under the statute, and on grounds of public policy, from giving a judicial bond, if such a bond is in fact given, the surety therein would be liable as upon a voluntary common-law obligation where the bond is supported by a valid consideration.

It is undoubtedly a well-established principle of law that a bond without the statute is enforceable as a voluntary common-law obligation to the extent that it is supported by an independent and valuable consideration. Gillespie v. Frisbie, 46 Okla. 438, 148 Pac. 991; U. S. v. Hobson et al., 10 Wall, 395, 19, L. Ed. 937.

But it is equally well settled that where the obligation is invalid, as between the original parties, by reason of a total lack of consideration, it will not bind the surety. 32 Oyc. 29.

In 21 R. C. L., page 996, it is said:

“In accordance with general principles of contract law, any illegality in the consideration on which the contract of a surety is based, or anything which tends to make void the original contract on which the suretyship obligation is founded, will relieve the surety from liability.”

If, in the instant case, it can be said that the bonds sued on were valid common law contracts with the state of Oklahoma, the surety would undoubtedly be liable thereon, even though the contracts are not enforceable against the state by reason of its exemption from court process. If, on the other hand, the bonds are invalid as between the original parties by reason of a want of consideration therefor, neither the principal nor the surety would be bound, and the fact that the principal on the bond is exempt from suit becomes immaterial.

It is clear, then, that the question of whether or not the defendant in the case *255 at bar is liable turns on whether the bonds were supported by any consideration.

In the case of National Surety Company v. Craig, 94 Okla. 63, 220 Pac. 943, this court said:

"The consideration of a supersedeas bond, approved and filed in a case, for the stay of execution in a .money judgment, is the involuntary forbearance of a judgment creditor to collect his debt by operation of law.”

We .have already determined 'that the state of Oklahoma, as a sovereign plaintiff, was entitled to the benefit of court process without price and without bond. .It was, therefore, entitled to the garnishment writ and to a stay of execution of the judgment obtained by the plaintiffs, pending appeal to the Supreme Court, without the giving of any bond therefor.

The involuntary forbearance of the plaintiff Brown to collect his debt was not obtained by giving the supersedeas bond, for the state of Oklahoma had that right without bond, and hence it received no consideration for the execution of such bond, nor could the defendant have suffered any injury or detriment capable of redress in a court of law, by reason of its use of the processes of the court without bond.

In the nature of things, there could be no damage suffered by the defendant by reason of the issuance of the garnishment writ on behalf of the state of Oklahoma, and its subsequent appeal to the Supreme Court capable of redress in a court of law.

As was said by Mr. Justice Nicholson, in the case of Morris, Court Clerk, v.

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Related

Gillespie v. Frisbie
1915 OK 300 (Supreme Court of Oklahoma, 1915)
Morris v. State Ex Rel. Walcott
1923 OK 52 (Supreme Court of Oklahoma, 1923)
National Surety Co. v. Craig
1923 OK 706 (Supreme Court of Oklahoma, 1923)

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Bluebook (online)
1925 OK 500, 237 P. 594, 110 Okla. 253, 1925 Okla. LEXIS 831, Counsel Stack Legal Research, https://law.counselstack.com/opinion/brown-v-american-surety-co-of-new-york-okla-1925.