American Bonding & Trust Co. of Baltimore, Md. v. Takahashi

• Decision Date: 09 September 1901
• Docket Number: 690.
• Citation: 111 F. 125
• Parties: AMERICAN BONDING & TRUST CO. OF BALTIMORE, MD., v. TAKAHASHI et al.
• Court: U.S. Court of Appeals — Ninth Circuit

111 F. 125

AMERICAN BONDING & TRUST CO. OF BALTIMORE, MD., v. TAKAHASHI et al.

No. 690.

United States Court of Appeals, Ninth Circuit.

September 9, 1901

Hoyt &amp Haight, Preston, Carr & Gilman, John P. Hoyt, and L. C Gilman, for plaintiff in error.

Shank &amp Smith and Corwin S. Shank, for defendants in error.

Before GILBERT and ROSS, Circuit Judges, and HAWLEY, District Judge.

ROSS Circuit Judge.

The plaintiff in error was defendant in the court below to an action brought by the Oriental Trading Company, the amended complaint in which alleged, among other things, that the defendant to the action is a Maryland corporation, and during the times therein mentioned was doing a general bonding business in the state of Washington, having for its general agent and manager in that state one A. L. Campbell; that in February, 1899, the Oriental Trading Company agreed with the Great Northern Railway Company to furnish it with Japanese laborers for extra gang and section work along its road during the remainder of that year, the trading company being thereby required to give the railway company an acceptable bond indemnifying it against all claims for wages of the laborers to be so furnished; that pursuant to that requirement the trading company applied to the defendant to the action, the American Bonding & Trust Company, through its general agent and manager, Campbell, for an indemnity bond in the sum of $25,000, and that the defendant, by its said agent and manager, required, as a condition precedent to the issuance of such bond, and for the purpose of assuring it against loss thereon through failure of the trading company to pay the wages earned by the laborers, that the moneys earned by the trading company under the contract with the railway company should be paid to the said Campbell, and be by him disbursed directly to and in payment of the laborers and that any sum remaining after such payment to the laborers should be paid over to the trading company; that the defendant bonding and trust company also reserved to itself alone the right to substitute another trustee in the place of Campbell, or to add further trustees, as it might see fit, to act jointly with him; that accordingly, on March 15, 1899, on receipt of a cash premium therefor, the defendant bonding and trust company prepared and executed, as surety, an indemnity bond to the railway company in the sum of $25,000, containing the terms and conditions above mentioned, which bond was delivered to and accepted by the railway company; that the furnishing of laborers by the trading company to the railway company was continued under a similar agreement for the year 1900, and that the defendant bonding and trust company prepared and executed, on the 1st day of February, 1900, as surety, and delivered to the railway company, for a like further consideration passing to it, a new bond for $25,000, as a renewal of the previous bond of March 15, 1899, the new bond being executed upon the same conditions and containing the same requirements as the first; that for the purposes stated, and in pursuance of its contract, the railway company made payments to Campbell until the defendant bonding and trust company terminated his agency on the 15th day of July, 1900, at which time it appointed in his place John P. Hoyt, its resident vice president, as trustee under the bond; that the sums so paid by the railway company to Campbell, earned by and belonging to the trading company, aggregated $302,439.44, of which sum there was paid over to and on account of the trading company sums aggregating only $292,583.09, and that the remaining sum of $9,856.35 is withheld, which last-mentioned sum so received by the defendant bonding and trust company is long overdue, and which it refused to pay after demand therefor duly made, to plaintiffs' damage in that sum, with interest from July 15, 1900. In addition to the denials contained in the amended answer of the defendant bonding and trust company of certain of the averments of the amended complaint, it set up that on or about the 16th day of February, 1899, the Great Northern Railway Company and two of the plaintiffs, namely, C. T. Takahashi and O. Yamaoka, entered into an agreement, a copy of which is set out in the answer, which is in the form of a letter addressed by the assistant general superintendent of the railway company to the plaintiffs just named, referring to a recent conversation between than in regard to the employing of Japanese laborers on the Western division of the railway company, and stating the willingness of the company to employ such laborers for extra gang and section work on certain terms set out in the letter, and concluding with the statement that, 'You will be expected to furnish the railway company with suitable bond indemnifying them from all claims for wages of the men supplied under this agreement'; that thereafter, and on or about the 15th day of March, 1899, the plaintiffs Takahashi and Yamaoka, as principals, and the defendant bonding and trust company, as surety, executed to the railway company their bond, which is set out at large in the answer, and that thereafter, to wit, on or about February 1, 1900, the railway company, as party of the first part, and the plaintiffs composing the Oriental Trading Company, as parties of the second part, entered into another agreement, also set out at large in the answer, by which the trading company agreed to furnish the railway company during the year ending July 31, 1900, as many laborers as the railway company should require, upon certain stated terms and conditions, and upon the agreement 'that all pay rolls for laborers employed under this agreement shall be made out in favor of A. L. Campbell, trustee, and all checks shall be sent to said trustee, who shall disburse by checks drawn in favor of the laborers according to lists and books furnished by the party of the first part (the railway company), or its agents, and said trustee shall pay the balance, after all claims are paid, to the parties of the second part' (the trading company). That contract also contained a provision to the effect that the trading company should give a bond, with the American Bonding & Trust Company of Baltimore as surety, in the sum of $25,000, conditioned for indemnifying the railway company from all loss and damage on account of any claims for wages of the laborers furnished under the agreement. The answer also alleged the execution of that bond, and set it out at large, among the recitals of which was the following:

'And whereas, said principal obligors (the copartners constituting the Oriental Trading Company) and said obligee (the railway company) by said agreement agreed that all checks for labor due said principal obligors should be paid to A. L. Campbell, trustee, of Seattle, Washington, who shall disburse by checks drawn in favor of the laborers according to the lists and books furnished by said obligee or its agents, and said A. L. Campbell should pay the balance, after all claims are paid, to said principal obligors; the surety having and reserving on notice to the obligors and obligee the right to designate another trustee, or to add trustees to act hereunder, as it may see fit: Now, therefore,' etc.

The amended answer also alleged that all of the money paid to Campbell was paid, under and in pursuance of the agreements and bonds mentioned, as trustee for the trading company, and not otherwise; that the latter agreed to and did pay Campbell for his services as trustee the sum of $15 a month during all of the time he so acted; that on or about the 24th of August, 1900, the railway company and the trading company entered into a supplemental agreement reciting the agreement of February 1, 1900, and substituting in place of Campbell John P. Hoyt, of Seattle, and providing 'that all pay rolls shall be made out in favor of said John P. Hoyt, trustee, and all checks shall be sent to said trustee, who shall disburse by checks drawn in favor of the laborers according to lists and books furnished by the party of the first part (the railway company) or its agents, and said trustee shall pay the balance after all claims are paid to the parties of the second part' (the trading company), and continuing in force the contract of February 1, 1900, in all other respects. And the amended answer avers that after the execution of that supplemental agreement Hoyt received the checks and money due from the railway company for wages of laborers furnished by the trading company under the agreements mentioned, and disbursed the same in accordance with the terms and conditions of the agreements and bonds. The replication of the trading company admits that the contract of February 16, 1899, was made with Takahashi and Yamaoka, but alleges that at the time of its execution M. Tsukuno was a member of the copartnership, and that the contract was made on behalf of the firm; and similar averments are made in respect to the bond executed on the 15th day of March, 1899. The replication put in issue the averments of the amended answer in respect to the payment by the trading company to Campbell for his services as trustee or otherwise, and also denies that either Campbell or Hoyt was trustee for the trading company; but alleges that each of them, during the time of the receipt and disbursement by them, respectively, of the moneys, acted as agent, and at the sole instance, of the bonding and trust company.

The case was tried by the court with a jury. The parties agreed in respect to the amount of money received by Campbell and unaccounted for by him, and there is practically no conflict in the evidence. The only contested question in the case relates to Campbell's status in the transaction; that is to say, whether, in...