Adams v. Williams

• Decision Date: 06 June 1910
• Citation: 52 So. 865,97 Miss. 113
• Court: Mississippi Supreme Court
• Parties: WIRT ADAMS, STATE REVENUE AGENT, v. FRANK I. WILLIAMS ET AL

52 So. 865

97 Miss. 113

WIRT ADAMS, STATE REVENUE AGENT, v. FRANK I. WILLIAMS ET AL

Supreme Court of Mississippi

June 6, 1910

March 1910

FROM the chancery court of, second district, Coahoma county, HON MANUEL E. DENTON, Chancellor.

Adams state revenue agent, appellant, was complainant in the court below; Williams, former treasurer of the board of levee commissioners, and the Aetna Indemnity Company of Hartford Connecticut, appellees, were defendants there. From a decree sustaining separate demurrers of the defendants to the bill of complaint and dismissing the suit complainant appealed to the supreme court. The opinion of the court states the facts.

Reversed and remanded.

O. G. Johnston, for appellant.

Section 161 of the Constitution of the state of Mississippi provides that the chancery court shall have concurrent jurisdiction with the circuit court of suits on bonds of fiduciaries and public officers. Code 1906, § 566, is identical with section 161 of the Constitution; hence, this suit, being one based on the bond of a public officer, is properly brought in the chancery court.

In answer to the objection of appellee that the state revenue agent is not the proper party to maintain this action we refer the court to Code 1906, § 4739, in which the duties of the state revenue agent are enumerated, and by which it is made his duty to investigate the accounts of levee board officers, and to maintain suits against them. This power has been recognized by this court.

In this case the surety on the bond in question is a corporation organized to make such bonds or undertakings; it agreed to become surety for a valuable consideration paid to it by the party relying upon it for protection; hence the doctrine that a surety is a favorite of the law and that a claim against a surety is strictissimi juris does not apply; for while the Aetna Indemnity Company may term itself a surety company, its business is nevertheless in all essential particulars that of an insurer, and this contract should be construed most strongly in favor of the obligee. 32 Cyc. 307.

In State v. Martin, 56 Miss. 108, it was held that, the principal having failed to sign his bond, the bond was therefore void or incomplete. That case was, however, decided in 1878, and under the Code of 1871. Since that time, and in fact since the adoption of the Code of 1880, the law regarding liability on official bonds has been materially changed. Code 1880, § 403, after prescribing the condition of an official bond, provides that all official bonds however irregular, whether approved or not, "shall be obligatory on every one who subscribes it as such for the purpose of making the official bond of such officer." Prior to the adoption of this statute, Code 1871, § 309, governed such matters and omitted the words "every one who subscribed it as such, " merely providing that the failure to make the bond conditioned as provided by the statute should not vitiate the bond, using this language: "And the official bonds shall be valid and binding in whatever form they may be taken."

Code 1880, § 403, was brought forward as Code 1892, § 3055, and is now in the Code 1906, as Code 1906, § 3463. Manifestly the legislature intended to cure the evil disclosed in the Martin case, supra, by making a bond binding upon all who should subscribe it without regard to its approval and without regard to whether or not the instrument be signed by the principal. This particular question is not one of first impression in this court, the identical point having been settled by this court, Gloster v. Harrell, 77 Miss. 793; Hall v. Lafayette, 69 Miss. 529; McLeod v. State, 69 Miss. 221; 6 Cyc. 1452.

It has frequently been decided in other states that the failure of a principal to sign a bond would not release the sureties in the absence of any testimony to the fact that they made the affixing of his signature a condition precedent to their liability. State v. Bourman, 10 Ohio, 445; 42 Barb. 52; 2 Hall (N. Y.), 584; Pima County v. Snyder, 44 P. 297; Cockrill v. Davie, 35 P. 958.

The foregoing cases dealing with bonds signed by individuals for accommodation are much stronger than cases of guaranty companies making surety bonds and receiving a valuable consideration for so doing. There is no statute requiring an officer to subscribe his official bond. It is simply made his duty to give an official bond. The law provides that he may do this by individual sureties, or by making bond with a surety company. A bond given with a guaranty company as surety is nothing more nor less than an insurance contract deliberately entered into, by virtue of which contract the guaranty company binds itself to protect the obligee from loss for a valuable consideration and its liability is distinct from the liability of an officer.

The bond made by the Aetna Indemnity Company was a public record. The company had its agents and attorneys in the city of Clarksdale, in which city the bond was recorded. It had every opportunity to ascertain whether or not the bond had been signed, and if it neglected to do this, it was its own negligence. It will be observed that the company was careful to collect the annual premiums for the services which it alleges having rendered to the levee board.

The surety company is endeavoring to avoid liability because of William's failure to sign, and thereby take advantage of a mere technicality. It is not for the treasurer or his sureties, the money of the town being traced to his hands by other competent evidence, to find shelter under the absence of a mere receipt warrant, or the fact that his bond was approved by the resolution. Neither he nor the surety company can now be heard to make such a defense. Gloster v. Harrell, supra. It makes no difference what conditions were written in the face of the bond, or whether or not the bond was approved. One who enters office and the sureties on his official bond by virtue of which he enjoys the office are alike estopped to deny the validity of the bond given by them. State v. Smith, 87 Miss. 551.

When one having the right to accept or reject a transaction, takes and receives benefits thereunder, he becomes bound by the transaction and cannot avoid its obligation or effect by taking a position inconsistent with such action. It has been repeatedly held that a person by the acceptance of benefits may be estopped from questioning the existence, validity and effect of a contract; so too, under similar circumstances, one may be estopped from denying the existence, validity and effect of a deed or bond. 16 Cyc. 787.

It is contended by appellees that the bond is void because containing conditions not prescribed by the statute, and because it contains a provision that the surety should not be liable on account of any loss occasioned by reason of the funds being deposited in a bank. But, in the first place, the money here sued for was not money lost by reason of a deposit in the bank. The loss was caused solely by the action of the treasurer in refusing to account for and pay over money received by him; however, this condition makes no difference in the bond, and should be read as though it were not there.

Code 1892, § 3055, provides how the bonds of all officers required to give bond shall be conditioned. That code section further provides that a failure to observe the form prescribed shall not invalidate any official bond. The bond of the levee board treasurer is well within the scope of that section. It is true that the bond is not payable to the state of Mississippi. It is also true that Code 1906, § 3464, provides that the bonds of all public officers shall be made payable to the state; however, this section is qualified by the act of the legislature creating the office of treasurer of the levee board, and provides that his bond shall be payable to the board of levee commissioners. Town of Gloster v. Harrell, supra; Faurote v. State, 11 N.E. 472; U.S. Fidelity, etc., Co. v. Union, etc., Co., 38 So. 177; State v. Smith, 87 Miss. 551; Cox v. Ross, 56 Miss. 481.

The failure on the part of the levee board to approve the bond given by Williams cannot avail the surety company, since Code 1892, § 3055, provides that the fact that the bond was not approved shall not invalidate the bond provided it has served as the official bond. There are some authorities holding that approval is necessary, but all such cases are where a bond was tendered by the officer and rejected by the parties imposed with the duty of approving same, and are not cases in which the bond was accepted and served as the official bond.

Assuming that the failure of Williams to sign the bond rendered it void and released the sureties from liability, that would not deprive a court of equity of jurisdiction. 29 Cyc. 1454; Gloster v. Harrell, 79 Miss. 794; State v. Smith, 87 Miss. 551; 3 Words and Phrases, 2498; Boone County v. Jones, 54 Iowa 699.

It must be conceded that Williams is liable for the money sued for. His contention is that the court below is without jurisdiction. This being true, this appellate court is called upon to say whether or not Williams can seek shelter behind the fact that he failed or neglected to subscribe his bond, which he adopted as his official bond in this case. He was both the secretary and treasurer of the board.

The failure of the board to detect the fact that Williams had not subscribed his bond was doubtless due to the confidence and trust in his integrity and fidelity, believing that he had done all things necessary to entitle him to enjoy the privileges of serving as treasurer of the board, whereupon the board entrusted to him the funds of the people and treated him in all respects as a lawful and qualified officer. Hence he cannot now be heard to set...