Central Banking & Security Co. v. United States Fidelity & Guaranty Co.

80 S.E. 121, 73 W. Va. 197, 1913 W. Va. LEXIS 174
CourtWest Virginia Supreme Court
DecidedNovember 11, 1913
StatusPublished
Cited by20 cases

This text of 80 S.E. 121 (Central Banking & Security Co. v. United States Fidelity & Guaranty Co.) is published on Counsel Stack Legal Research, covering West Virginia Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Central Banking & Security Co. v. United States Fidelity & Guaranty Co., 80 S.E. 121, 73 W. Va. 197, 1913 W. Va. LEXIS 174 (W. Va. 1913).

Opinions

POEEENBARGER, PRESIDENT :

After the Central Banking & Security Company, surety in one of the bonds of Amnon Taylor, administrator of Tasriel [199]*199Taylor, had paid the decrees pronounced against it, as corrected and affirmed by this Court, in Taylor v. Taylor, 66 W. Va. 238, it brought this suit, primarily for indemnity and secondarily for contribution, against the United States Fidelity & Guaranty Company, of Baltimore, Md., and the Citizens Trust & Guaranty Company, of Parkersburg, W. Va., sureties in the two subsequent bonds given by Taylor as administrator of the same estate. The prayer of the bill is in the alternative. The plaintiff claims the subsequent bonds operate in law as full and complete indemnity, requiring the sureties therein, or one of them, to reimburse it to the extent of the 'whole amount it was compelled to pay as Taylor’s surety. It had become the surety in a $6,000.00 bond given in February, 1903. In July, 1904, the United States Fidelity & Guaranty Company gave, before the clerk of the county court of Calhoun county, another bond in the same penalty, and in July, 1905, the Citizens Trust & Guaranty Company became surety in a third bond in the same penalty and given in the same way. Each of these subsequent bonds contains a recital of desire on the part of the principal therein to release the surety in the preceding one from further liability and of tender thereof in lieu of the preceding one. The claim for complete indemnity and full reimbursement' is predicated upon this recital. In the case of Taylor v. Taylor, the distrib-utees of the Taylor estate sued the principal and sureties in all three of the bonds, and the trial court sustained the demurrers of the United States Fidelity & Guaranty Company and the Citizens Trust & Guaranty Company and dismissed the bill as to them. It held the Central Banking &' Security Company liable as surety in the first bond and it appealed from the decree. The sureties in the other two did not appeal and the dismissal as to them remains unreversed. As 'the bill in this cause exhibits the printed record of the former one, showing all the proceedings had therein, as well -as the mandate and opinion of this Court in it, the defendants herein, in their separate demurrers thereto, relied principally upon said dismissal of the former bill as an adjudication in their favor, not only against the plaintiff in the former suit, but as against the alleged co-surety, the plaintiff here. The demurrer of the United States Fidelity & Guaranty Company to this [200]*200bill was unqualifiedly overruled and that of the other defendant partially sustained, but the bill was not dismissed as to it, the court deeming it a proper party but not subject to direct liability. Thereafter the United States Fidelity & Guaranty Company filed its answer and answer in the nature of a cross bill, praying affirmative relief against the Central Banking & Security Company, the Citizens Trust & Guaranty Company and the administrator and heirs of Taylor, the purpose of which was, in the main, to demand indemnity from the Citizens Trust & Guaranty Company, its successor in the bond as surety, or rather the surety in the last of the three bonds. The Citizens Trust & Guaranty Company filed its answer to the original bill and also to the cross bill, and upon these pleadings and general replications of the plaintiff to the answers and a stipulation as to the facts, the court held the parties to be co-sureties and required each of the two defendants to pay to the plaintiff one-third of the amount it had been compelled to pay at the suit of the distributees of the Taylor estate. From this decree, the Central Banking & Security Company has appealed, complaining of the disallowance of full indemnity against the other companies and also of the denial of contribution as to the costs and expense incident to its defense in the cause of Taylor v. Taylor. Denying liability for contribution or indemnity, the two defendants cross-assign error in the enforcement thereof and resist the further claims of the appellant.

In the cross-assignments of error, the validity of the two subsequent bonds is denied on account of lack of authority in the clerk of the county court of Calhoun county to take them. As is shown by the report of the decision in Taylor v. Taylor, these two bonds were taken by the clerk in the vacation of the court, and he had no authority, under the statute, to take them as substitute bonds, each releasing the preceding one. The contention in that cause wias that they were such bonds and that there was no liability except upon the last one, the one in which the Citizens Trust & Guaranty Company was the surety. In the rejection of this claim and contention, the question of the validity of the two subsequent bonds as additional ones was left open and undecided. As the statute nowhere confers upon the clerk authority to take a new bond [201]*201from a personal representative or other fiduciary and makes it his duty to report to the court the necessity thereof, it may well be conceded he had no authority to take either of the two substitute bonds, but their absolute invalidity and worthlessness does not necessarily follow. Every bond taken without authority in the officer who took it is not void. Such bonds are often held good as common law obligations. Numerous authorities holding them void, are cited in support of the cross-assignments of error, but the bonds in those cases were, for the most part, held void because the taking thereof contravened a principle of public policy. Most of them were recognizances under which officers had discharged prisoners. One of them, involved in Benedict v. Bray, 2 Cal. 251, was a void attachment bond, but the opinion is unsatisfactory. It assumes, contrary to almost uniform authorit>, that all bonds, taken by officers not authorized to take them, are void. The law on this subject was summarized by Judge Green in Porter’s Exr. v. Daniels, 11 W. Va. 250, in the following terms: “The mere fact that a bond not authorized by law has been taken by an. officer, does not render such bond invalid at common law. Such bonds have been frequently held void at common law, but. wherever so held, it has been not simply because taken by an officer without authority, but for other and sufficient reasons appearing in each particular case; such as that they were not voluntarily executed; that they were given to the officer, to induce him to violate his duty as such officer; or to induce him to perform a duty, he was bound to perform without the giving of such bond;.that the taking of the bond was oppressive, and it was given without consideration ; that the obligee in the bond had no interest in the subject matter; that the taking of the bond was a violation of public policy, or was executed under circumstances, or contained provisions, which would have rendered a private bond void at law. ’ ’ These bonds were voluntarily given for- consideration paid to the sureties, and neither the acceptance nor the giving of the same contravenes any principle of public policy. Hence they are clearly good as common law obligations.

That they were not substitute, release or indemnity bonds as matter of law or by force of the statute, was decided in the case of Taylor v. Taylor. It is said, however, the parties ex[202]*202pressly made them sucb by stipulation. The only matter relied upon as evidence of sucb an undertaking is tbe recital in each of the subsequent bonds as to tbe motive or purpose of the giving of tbe same.

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Bluebook (online)
80 S.E. 121, 73 W. Va. 197, 1913 W. Va. LEXIS 174, Counsel Stack Legal Research, https://law.counselstack.com/opinion/central-banking-security-co-v-united-states-fidelity-guaranty-co-wva-1913.