United States Fidelity & Guaranty Co. v. Fossati

80 S.W. 74, 97 Tex. 497, 1904 Tex. LEXIS 182
CourtTexas Supreme Court
DecidedApril 18, 1904
DocketNo. 1298.
StatusPublished
Cited by29 cases

This text of 80 S.W. 74 (United States Fidelity & Guaranty Co. v. Fossati) is published on Counsel Stack Legal Research, covering Texas Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Fidelity & Guaranty Co. v. Fossati, 80 S.W. 74, 97 Tex. 497, 1904 Tex. LEXIS 182 (Tex. 1904).

Opinion

WILLIAMS, Associate Justice.

Certified questions from the Court of Civil Appeals of the Third Supreme Judicial District, as follows: “This suit was originally brought by the State as plaintiff, against W. B. Callender, as principal, and F. FT. Fossati, O. F. Bailey, J. M. Brownson, Joe idoll, G. H. Hauschild, G. Miller, H. Krehmeier and Mrs. Albert Simon, as sureties on the bond of Callender, as sheriff and tax collector of Victoria County, Texas. The amount sued for is the sum of $12,843.85, with interest at 6 per cent from October 23, 1902.

“The suit of the State is predicated upon article 2310 of the Bevised Statutes; or, in other words, its action is one based upon an account rendered by- the Comptroller, showing the amount of indebtedness due the State for taxes unpaid by Callender and the sureties on his bond. The State in its petition did not charge Callender with theft or embezzlement of the taxes due by him and his sureties to the State; nor was any remedy urged by the State against the appellant, the United States Fidelity and Guaranty Company; nor were any facts alleged that would make the appellant liable to the State on its guaranty and indemnity bond, executed by it to the sureties of Callender.

“The sureties of Callender, in their first amended original answer, filed January 22, 1903, made the appellant, the United States Fidelity and Guaranty Company, a party defendant to the suit, and in a cross action against the appellant alleged that the fidelity and guaranty com *502 pany is a corporation not created by the laws of this State, but having its home office in the city of Baltimore in the State of Maryland, and was authorized to do business in this State. That the appellant, the fidelity and guaranty company, on or about the 10th day of December, 1900, executed its guaranty and indemnity bond in favor of the sureties on Cal-lender’s collector’s bond for the sum of $32,504.65, to be paid to the obligees. The condition of the obligation and bond is to the effect that if the United States Fidelity and Guaranty Company shall indemnify and save harmless the obligees aforesaid, from all costs, losses, damages and expenses which the)1- may incur or suffer by reason of any act or fraud or dishonesty amounting to larceny or embezzlement on the part of the said W. R. Callender, in connection with the duties of said office, and which shall have been committed during the period from December 10, 1900, to December 10, 1901, then this obligation to be void, otherwise to be in full force and effect.

“It was in effect averred by the sureties in their answer that the sum sued for by the State was covered by this bond, and that the same was due the sureties by virtue of the terms of the bond from the United States Fidelity and Guaranty Company, in the event the State should recover against the sureties,

“It appears that Callender and the sureties, all the parties sued by the State, are residents of the State o.f Texas, and that the appellant, the fidelity and guaranty company, is a corporation created under the laws of Máryland, and is domiciled in the city of Baltimore, State of Maryland.

“The State recovered judgment against Callender and the appellees, the sureties on his bond, as prayed for in its petition; and the sureties recovered judgment over against the fidelity and guaranty company for the sum of $12,843.85 and $1500 attorney’s fees and $180 costs, together with interest.

“At'the proper time, and in the proper manner and form as required by law, the guaranty company presented to the trial court its petition and bond for the removal of the suit against it into the Circuit Court of the United States for the Western District of Texas, which application and request was overruled and denied by the trial court. The action of the court in refusing to remove the ease against the appellant is assigned as error by the fidelity and guaranty company. The fidelity and guaranty company also has assignments of error in its brief, in proper form, complaining of the action of the trial court in overruling its special demurrer, which is as follows:

“ 'Because the two cases sought to be tried together, by the action of the sureties in calling in this defendant by their cross-action, are distinct and severable causes of action, the case made by the State being a simple suit in debt on an account for the shortage against W. R. Cal-lender, in which the.sureties are made defendants on their bond to the State in which they undertake that Callender shall pay to the State the money he received, while the suit by the sureties against this defend- ■ *503 ant is a suit upon an indemnity bond, in which this defendant only guarantees against costs, losses, damages and expenses which the sureties may suffer by reason of any act of fraud or dishonesty of the said Cal-lender, amounting to larceny or embezzlement, and before the sureties shall have any right of recovery against this defendant, they are required to show crime committed by W. R. Callender, a question which must be decided under different rules of evidence from those governing the admissibility of evidence in the case brought by the State against the sureties. The cause of action in both cases does not arise out of the same act, nor is there any community of liability between the defendants in both suits.’

“In view of the above statement, the Court of Civil Appeals of the Third District certifies to the Supreme Court the following questions:

"1. Was the cause of action against the fidelity and guaranty company by the sureties on Callender’s bond removable to the Circuit Court of the United States for the Western District of Texas, and did the trial court err in declining and refusing to remove the case against the fidelity and guaranty company ?

“2. Did the trial court err in overruling the special demurrer interposed by%the fidelity and guaranty company, as above stated, to the cross-action of the sureties on Callender’s bond against it?”

An answer to the second question will suffice to dispose of the case. In the case of Holloway v. Blum, 50 Texas, 625, there was presented a question very similar to that now before us. Holloway had retired from a partnership of which he had been a member under a contract with the Blums by which the latter had agreed to release Holloway “from any judgment or judgments that then existed or that might thereafter be obtained against the firm, as well as from their entire indebtedness, and would guaranty him entire immunity against any and all creditors of said firm.” Afterwards Holloway was sued with his former copartners for one of the debts and pleaded over against the Blums in order to recover against them such amount as plaintiff might recover against him. The Blums pleaded their privilege of being sued in the county of their residence^ and, in sustaining a judgment dismissing them, this court, in effect, decided that they were not proper parties.

In the case of Blum v. Root & Dow, 2 App. Civ. Gas., 98, the same question, arising upon the same contract, was passed upon by the Court of Appeals, which held that the plea to the venue was good, although the Blums were proper parties and could have been held but for that objection.

The contract here involved is not nearly so favorable to the right asserted by the original parties defendant to bring in other parties and recover over against them, as was the one in question in those cases.

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Bluebook (online)
80 S.W. 74, 97 Tex. 497, 1904 Tex. LEXIS 182, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-fidelity-guaranty-co-v-fossati-tex-1904.