United States Fidelity & Guaranty Co. v. Naylor

237 F. 314, 151 C.C.A. 20, 1916 U.S. App. LEXIS 1961
CourtCourt of Appeals for the Eighth Circuit
DecidedOctober 30, 1916
DocketNo. 4473
StatusPublished
Cited by22 cases

This text of 237 F. 314 (United States Fidelity & Guaranty Co. v. Naylor) is published on Counsel Stack Legal Research, covering Court of Appeals for the Eighth Circuit 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. Naylor, 237 F. 314, 151 C.C.A. 20, 1916 U.S. App. LEXIS 1961 (8th Cir. 1916).

Opinions

SANBORN, Circuit Judge

(after stating the facts as above). [1] The test of cosuretyship is a common liability for the same debt or burden. This liability may arise at the same time or at different times,, out of the same writing or out of many writings: A common interest and a common burden alone are required to create the relation^ and to enable the cosurety who has paid more than his due proportion to claim contribution from those who have paid less than their just proportion of the common liability. “If several persons, or several sets of persons, become sureties for the same duty or debt, of, to, and for, the same persons, though by different instruments, at different times, and without a knowledge of the obligations-of each other, they will be bound to mutual contribution.” 2 Wait’s [317]*317Actions and Defenses, 297; 4 Pomeroy’s Equity Juris. § 1418; Assets Realization Co. v. American Bonding Co., 88 Ohio St. 216, 102 N. E. 719, 720, 725; Dering v. Earl of Winchelsea, 1 Cox’s Chan. Cases, 318, 322, 323.

[2] The first question, then, is: Was the bond of the personal sureties given to secure the same liability as the bond of the Fidelity Company? The evidence from which the answer to this question must be deduced consists of the two bonds, the judgments on the bonds, the testimony of Mr. Gilroy, one of the personal sureties, the stipulation that his testimony shall be considered the testimony of the sureties Thompson, Hoggatt, and Naylor, and the testimony of Mr. Gustin, one of the county commissioners.' Mr. Gilroy testified that Mr. Dickerson, the principal in the bond the personal sureties signed, told him about March 2, 1902, that he had $5,000 of the county’s money that was secured by a bond in a trust company; that he could get more money if he could get more bond; that there would not be much of the time when he would have more than $5,000 of the county’s money, but that he had to give a bond to secure it; that Dickerson asked him to sign the bond for the bank; that as a result of this conversation and solicitation he signed the bond for $10,000 without, as he thinks, reading it; that he had no intention of becoming liable for the $5,000 already guaranteed by the Fidelity Company; and that he could not answer the question whether or not he would have signed the bond if the matter had been presented to him as a proposition to sign as additional surety for the $5,000 already guaranteed by the Fidelity Company. Mr. Gustin, the county commissioner, testified that the $5,000 bond was approved by the commissioners February 3, 1902; that on January 1, 1902, the bank was indebted to the county for the county funds deposited with it in the sum of $10,868.20; that after the $5,000 bond was approved Dickerson made application for an additional deposit over and above the $5,000 secured by the Fidelity Company’s bond; that the board issued an order to allow him additional money above the $5,000 if he would give another bond, and instructed the county treasurer to deposit nothing above the $5,000 with his bank until the board received more bond to cover the amount the bank should receive; that the board knew when it met that the bank had on hand more than its proportion, and that was one of the things they met for, to give this order that he should give more bond; that they gave the county attorney the facts upon which to prepare the bond; that he prepared it, and the board examined ’the names of the sureties. There was no other material testimony upon this issue.

The result is that the facts were that the bank had more than $5,000 of the county funds when the county board met and Dickerson asked for more deposits; that the board then knew this fact, and that it had met to make the order that Dickerson should give more bond; that these facts were stated to the county attorney; that the county attorney drew the bond, and the personal sureties signed it without reading it. The bond was signed March 2, 1902, and it was approved March 3, 1902. If it had been given to secure only addi[318]*318tional deposits to be subsequently received by the bank on the faith of this bond, the county attorney, on the state of facts which were given to him, would surely have so drawn it as to limit the liability of the sureties to the repayment of the deposits made subsequent to its date. The facts were, and doubtless they were so stated to him, that the bank was on February 1, 1902, and had been, indebted to the county in more than $5,000; that the board had made the demand of more bonds of the owners of the bank, and the county attorney so drew the bond that the sureties on it covenanted to repay all deposits made in the bank subsequent to January 31, 1902, a date more than a month prior to the date of the signing of the bond by the sureties. There can, therefore, be no doubt that the bond was given to secure'all deposits after January 31, 1902, until January 31, 1903. The sureties, therefore, by the express terms of the bond covenanted promptly to pay over on demand the funds of the county deposited with the bank between January 31, 1902, and February, 1903. The bank defaulted in January, 1903. Hence the bond of the personal sureties by its clear terms secured the same debt as the bond of the Fidelity Company.

It is true that Dickerson told the personal sureties before the'bond was signed that it secured only the deposits in excess of $5,000, that they signed it in reliance upon that statement, and did not intend thereby to become liable to pay the $5,000 for which the Fidelity Company had become liable. But Dickerson was neither the agent nor representative of the county nor of the Fidelity Company. The personal sureties were charged.with the duty as against the county and as against the Fidelity Company to read the bond before they signed it, and if it did not accord with their intentions to modify it so that it did before they executed it. Insurance Co. v. Mowry, 96 U. S. 544, 547, 24 L. Ed. 674; Chicago, St. P., M. & O. Ry. Co. v. Belliwith, 28 C. C. A. 358, 362, 83 Fed. 437, 441. It is conceded that by an agreement between themselves and the county, or by a contract between themselves and the Fidelity Company, they might have limited their liability to the repayment of deposits in excess of $5,000; but they did not do so. And the question here is, not what they might have done, but what they did, and there is nothing in the testimony in this case to overcome the incontrovertible fact, which the two bonds conclusively establish, that each surety on each bond covenanted to pay, up to the amount of the penalty of the bond he or it signed, the entire deposits in the Toronto Bank of the funds of the county between January, 1902, and February, 1903. The bond of the personal .sureties was given to secure the same debt as the bond of the Fidelity Company.

This conclusion has not been reached without notice of other contentions of counsel for the personal sureties which have not yet been discussed. They call attention to minor differences in the verbiage of the two bonds, such as that the Fidelity Company’s bonds secured the deposits of the county, while the personal sureties’ bond secured these deposits and also 2 per cent, interest on daily balances, guaranteed that the bank would do all business of exchange on checks and drafts [319]

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Witmer v. Bates
N.D. Alabama, 2022
A & P Sheet Metal Co., Inc. v. Edward Hansen, Inc.
357 A.2d 37 (New Jersey Superior Court App Division, 1976)
Fireman's Fund Indemnity Co. v. State Compensation Insurance Fund
209 P.2d 55 (California Court of Appeal, 1949)
Fidelity Deposit Co. of Maryland v. Richard
103 P.2d 628 (New Mexico Supreme Court, 1940)
Globe Indemnity Co. v. Ætna Casualty & Surety Co.
192 So. 234 (Supreme Court of Louisiana, 1939)
Phillips-Jones Corp. v. Parmley
302 U.S. 233 (Supreme Court, 1937)
Hayes v. Travelers Ins. Co.
93 F.2d 568 (Tenth Circuit, 1937)
Century Indemnity Co. v. Maryland Casualty Co.
193 A. 221 (Supreme Court of New Hampshire, 1937)
In re People
159 Misc. 892 (New York Supreme Court, 1936)
Indemnity Insurance of North America v. American Surety Co.
239 A.D. 522 (Appellate Division of the Supreme Court of New York, 1933)
Fidelity & Casualty Co. v. American Surety Co.
169 A. 226 (Supreme Court of Pennsylvania, 1933)
Newcomb v. Ingram
243 N.W. 209 (Wisconsin Supreme Court, 1932)
United States Fidelity & Guaranty Co. v. Yeilding Bros.
143 So. 176 (Supreme Court of Alabama, 1932)
Arkansas v. Pufahl
52 F.2d 116 (Eighth Circuit, 1931)
Gray v. American Surety Co.
175 N.E. 686 (Indiana Court of Appeals, 1931)
New Amsterdam Casualty Co. v. Bookhart
235 N.W. 74 (Supreme Court of Iowa, 1931)
Board of County Commissioners v. Mason
264 P. 93 (Wyoming Supreme Court, 1928)
Leach v. Commercial Savings Bank of Des Moines
213 N.W. 612 (Supreme Court of Iowa, 1927)
County of Goodhue v. Noser
212 N.W. 948 (Supreme Court of Minnesota, 1927)

Cite This Page — Counsel Stack

Bluebook (online)
237 F. 314, 151 C.C.A. 20, 1916 U.S. App. LEXIS 1961, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-fidelity-guaranty-co-v-naylor-ca8-1916.