Lloyds Casualty Insurer v. Farrar

167 S.W.2d 221
CourtCourt of Appeals of Texas
DecidedNovember 20, 1942
DocketNos. 13312, 13339
StatusPublished
Cited by10 cases

This text of 167 S.W.2d 221 (Lloyds Casualty Insurer v. Farrar) is published on Counsel Stack Legal Research, covering Court of Appeals of Texas primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Lloyds Casualty Insurer v. Farrar, 167 S.W.2d 221 (Tex. Ct. App. 1942).

Opinions

YOUNG, Justice.

The suit in the trial court was by Far-rar, appellee, surety on a supersedeas bond in another cause where M. V. Mowery, John White and H. J. - Yarborough were judgment creditors; the instant proceedings being for contribution and exoneration against Lloyds Casualty Insurer, an alleged “additional surety” in the Mowery appeal. There are, in fact, two records before us: Lloyds having perfected an appeal from the overruling of its plea of privilege; and a further appeal from an adverse judgment on the merits. However, consistent with appellant’s rights, and after necessary statement of the rather complicated background of both appeals, the interlocutory order overruling plea to the venue will first be disposed of.

December 4, 1938, in the District Court of Gregg County, and prior to the filing of the suit at bar, one M. V. Mowery obtained judgment on his workmen’s compensation claim against the Southern Underwriters and its successor, United Employers Casualty Company, for $6,357.62, a one-third interest being awarded to his attorneys. Defendants in the judgment just /described duly perfected appeal to the Court of Civil Appeals at Texarkana, with B. F. Farrar (appellee here) and W. F. Weatherford as sureties on the su-persedeas bond of said defendants. While the record was there pending, the attention of that Appellate Court was called to the fact that surety Weatherford had become insolvent, through motion of Mow-ery’s attorneys, who prayed for posting of additional surety. The motion being sustained, the Court directed defendants, United Employers Casualty Company, et al., to file another and sufficient bond within twenty days from January 18, 1940. Thereafter, within the time, Will R. Saunders, attorney for said insurance companies, procured the execution by Lloyds Casualty Insurer (appellant here) of a supersedeas bond, in part reciting that it was “duly authorized and licensed under the laws of the State of Texas to sign as surety on this bond,” payable to Mowery, John White and H. J. Yarborough, his lawyers, and another (who later assigned his interest to the attorneys just named.) This instrument, basis of the present litigation, was for the sum of $14,000, with conditions of liability in terms of the statute. It was executed in Dallas by Warren P. Castle, the resident Deputy Attorney in Fact, and appended thereto was the Power of Attorney of Earl W. Gammage, Statutory Attorney in Fact at Houston, authorizing Castle to execute surety bonds for Lloyds Casualty Insurer. This additional bond was then mailed by Saunders to Mr. Hollingsworth, Clerk of the Tex-arkana Court of Civil Appeals, who refused to file or approve it on the ground of insufficient evidence to establish the solvency of said surety; replying to Saunders that same was being held “subject to your orders.” Mr. Saunders then sent by' messenger to Texarkana, financial statement of his Lloyds surety and a certificate from the • Board of Insurance Commissioners, authorizing Lloyds Casualty Insurer to transact a surety business in Texas; and after attachment of such papers to the bond, it was again presented to the Clerk for approval, which was refused. These transactions occurred between the 2nd and 5th of February, 1940. Thereafter, on February 8, 1940, the Tex-arkana Court of Appeals declined to allow further time for filing additional superse-deas bond, at the same time directing the Gregg County District Court to issue execution on aforesaid $6,357.62 judgment against such insurance companies; and defendant United Employers Casualty Company was written a letter on the same [224]*224day by its attorney, Will R. Saunders, that the Lloyds Casualty Insurer bond had not been approved, was not in effect, and that it would be in order for the Company to take down the $1,400 deposit placed with Lloyds in connection with its issuance. A copy of the letter just referred to was mailed to appellant’s Deputy Attorney in Fact Castle, who, on the next day, wrote T. E. Gammage at Houston, enclosing the Saunders communication and stating “I am therefore cancelling this bond flat/' However, on February 12, 1940, Mr. Saunders filed a motion in the Texarkana Court of Appeals, seeking permission to file a mandamus petition against R. B. Hollings-worth, Clerk, the object being to compel said officer to approve and file the additional bond as a good and sufficient statutory obligation, and as complying with the prior court order of January 18; which motion being denied, said Southern Underwriters, et al., through the same attorney Saunders, on February 14, 1940, filed in the Supreme Court of Texas a similar motion for permission to institute mandamus proceedings against the Judges of the Texarkana Court of Appeals and Clerk Hollingsworth; the sole object thereof being to compel recognition of the additional bond on which Lloyds Casualty Insurer was surety, as a sufficient instrument of supersedeas in fact and in law; with prayer for temporary injunction until hearing on the merits. To this petition was affixed the affidavit of Saunders, reciting in part, that the “matters of fact contained therein are true.” On the same day, the Supreme Court granted relators permission to file the petition, and issued its temporary injunction that respondents therein “be restrained until the further orders of the Supreme Court of Texas from taking any steps to issue or levy execution upon the judgment of the District Court of Gregg County, Texas, mentioned and identified in said petition and application for mandamus, and the Clerk of the District Court of Gregg County, Texas, is directed to refrain from issuing any execution on said judgment until the further orders of this Court, and all persons are restrained from levying execution, if same has been issued.” By further recitals in the order, however, the Texarkana Court was not enjoined from deciding the merits of the appeal. No bond was required for the issuance of the above temporary injunction, pending a later hearing on the mandamus.

It should here be noted that Messrs.White and Yarborough, attorneys for Mowery, contested the sufficiency of such additional bond by letters to Hollings-worth, Clerk, and by motions before the Texarkana Court, attacking the solvency of Lloyds Casualty Insurer and the authority of Deputy Castle to sign it, appending to their motion of 'February 5, 1940, a telegram from the Board of Insurance Commissioners, stating in substance that Earl W. Gammage was the only Attorney in Fact for Lloyds Casualty Insurer, and that its g-uaranty fund was $70,000, composed of stock of T. E. Gam-mage & Sons, Inc., Houston.

As late as May, 1940, these attorneys wrote Mr. Hollingsworth, Clerk, calling attention to Art. 5020, R.S., Vernon’s Ann. Civ.St. art. 5020, providing that a surety Company, such as Lloyds, could write risks only up to one-tenth of its assets, claiming the particular additional bond of $14,-000 void in the light of the telegram above mentioned.

By way of sequence, we should further state that on February 2, 1940, after Deputy Attorney in Fact Castle had signed the additional bond, Lloyds Casualty Insurer at once reinsured with Lawyers’ Lloyds of Texas all excess on the bond above $7,000, said reinsurer operating under the supervision of the State Board of Insurance Commissioners and licensed to transact such business in Texas.

Going back to the Texarkana case of Southern Underwriters et al. v.

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Bluebook (online)
167 S.W.2d 221, Counsel Stack Legal Research, https://law.counselstack.com/opinion/lloyds-casualty-insurer-v-farrar-texapp-1942.