American Surety Co. v. State

• Decision Date: 22 October 1925
• Docket Number: (No. 1254.)
• Citation: 277 S.W. 790
• Parties: AMERICAN SURETY CO. OF NEW YORK v. STATE ex rel. BALE.
• Court: Texas Court of Appeals

277 S.W. 790

AMERICAN SURETY CO. OF NEW YORK v. STATE ex rel. BALE.

(No. 1254.)

Court of Civil Appeals of Texas. Beaumont.

October 22, 1925.

Appeal from Dallas County Court; Wiley A. Bell, Judge.

Suit by the State of Texas, on the relation of E. D. Bale, against the American Surety Company of New York. From a judgment for plaintiff, defendant appeals. Reversed and rendered.

Stennis & Stennis, of Dallas, for appellant.

Burgess, Burgess, Sadler, Christman & Brundidge, of Dallas, for appellee.

O'QUINN, J.

This is an appeal from a judgment rendered in the county court at law No. 2 of Dallas county, Tex. The following statement of the nature and result of the suit, which is adopted by appellee, is taken from appellant's brief:

"This is a suit by the state of Texas ex rel. E. L. Bale against American Surety Company of New York to recover $333.30.

"The petition alleges:

"A. That it is brought under the terms and conditions of title 131, Revised Civil Statutes 1920, entitled `Warehouses and Warehousemen.'

"B. That June 12, 1919, the American Surety Company of New York executed, as surety for the Southwestern Forwarding Company, a public warehouseman's bond; that the bond was approved as required by law on August 13, 1919, and that the bond is on file in the office of the county clerk of Dallas county; that said bond was in full force and effect from date of approval until November 21, 1921; that the bond, among other provisions, stipulated that the surety might cancel the bond at any time on five days' notice in writing sent by registered mail to the county judge.

"C. That the Southwestern Forwarding Company, principal on said bond, is not made a party defendant because notoriously insolvent.

"D. That E. L. Bale, for whose benefit suit is brought, deposited with the Southwestern Forwarding Company on January 4, 1921, certain tires and obtained warehouse receipts for same; that on May 5, 1921, the receipts, properly indorsed, were surrendered to the Southwestern Forwarding Company upon promise to deliver the tires; that the company failed to deliver a part of the tires covered by the surrendered receipts; that the receipts are not in the possession of plaintiff, but `to the best of his knowledge and belief' are in the possession of the Southwestern Forwarding Company, the principal on the bond sued upon, and defendant is given notice to produce the receipts.

"E. That tires of the value of $333.30 were not delivered, and that failure to deliver constituted a breach of its duty `to faithfully perform as a public warehouseman' to plaintiff's damage.

"Defense is made to the suit upon the following grounds:

"(a) Nonjoinder of Southwestern Forwarding Company.

"(b) Exception of no cause of action.

"(c) Special exceptions.

"(d) General denial.

"(e) Alleges bond not in force and effect at the time acts complained of were done."

The case was tried to a jury and verdict rendered for plaintiff and judgment accordingly entered. Motion for a new trial was overruled; hence this appeal.

J. H. Booth was the owner and manager of the Southwestern Forwarding Company, principal in the warehouseman's bond upon which suit is brought, and who signed the bond in question. Plaintiff alleged that he had surrendered the warehouse receipt given him by the Southwestern Forwarding Company showing the receipt by said company from plaintiff of the goods, wares, and merchandise, and for the loss of which this suit was brought, to said Southwestern Forwarding Company, and that "to the best of his knowledge and belief" said receipt was in the possession of said Southwestern Forwarding Company, principal in the bond, and in his petition gave defendant, surety, notice to produce said warehouse receipt in the trial of the case. The principal in the bond, the Southwestern Forwarding Company, was not made a party defendant, because, plaintiff alleged, it was notoriously insolvent, the suit on the bond being against the surety alone.

At the trial, plaintiff, over the objections of appellant, offered secondary evidence of the contents of the warehouse receipt. There was no evidence of any effort on the part of the plaintiff to obtain the original, nor any excuse for its not being produced, other than the notice in the petition to produce the original given defendant. We think the court should have excluded the evidence. None of the things necessary to the introduction of the evidence in the manner sought was shown. Plaintiff's petition alleged that the receipt was in the possession of Booth. Although Booth was the principal in the bond, he was not made a party to the suit. There was no showing that any effort was made to procure his attendance as a witness, or to have him testify in any manner; no effort to obtain the receipt from him, or any claim that the receipt was lost. Plaintiff contented himself simply with alleging that the principal in the bond was in possession of the receipt, and giving notice in his petition to the surety, appellant, to produce the receipt. Appellant had no control of the instrument in question. Booth, the principal in the bond, not being a party to the suit. occupied the position of a stranger to the suit. In order to admit secondary evidence of the existence and contents of an instrument, there must be some proof that the party upon whom the notice to produce is served had control of the instrument. 2 Jones on Evidence, 286, § 221; G. H. & S. A. Ry. Co. v. Arispe, 5 Tex. Civ. App. 611, 23 S. W. 928, 24 S. W. 33; Trimble v. Edwards, 84 Tex. 497, 500, 19 S. W. 772.

Over objection of appellant, appellee was permitted to testify as to statements made by Booth, the principal in the bond, out of the presence of appellant, and after the transaction complained of by appellee had been completed, which statements were in the nature of an admission of liability and a promise to pay. We think this was error. As we understand the record, the statements made by Booth were made after the shortage had been discovered and when plaintiff was trying to get Booth to settle the matter. The surety is bound only for the actual conduct of the principal, and not whatever he might say he had done, and therefore the surety is entitled to proof of his personal conduct by original evidence, where it can be had, excluding all declarations of the principal made subsequent to the act to which they relate, and out of the course of his official duty or employment. Greenleaf on Evidence, vol. 1, § 187; Stearns on Suretyship (2d Ed.) p. 298; La Coste v. Bexar County, 28 Tex. 420; Cook County Liquor Co. v. Brown, 31 Okl. 614, 122 P. 167; Screwman v. Smith, 70 Tex. 168, 7 S. W. 793; McFarlane v. Howell, 16 Tex. Civ. App. 246, 43 S. W. 315; Insurance Co. v. Bonding Co., 146 Wis. 573, 131 N. W. 994, 40 L. R. A. (N. S.) 661, note 662.

Appellant, by several propositions, insists that as under the law, article 7827½xx, Texas Complete Statutes 1920, the bond was good only for one year, no liability against it is shown because the deposit of the tires was made with the Southwestern Forwarding Company more than one year after the bond sued on was approved.

The undisputed facts show that the Southwestern Forwarding Company was a corporation, incorporated and doing a public warehouse business under and by virtue of the laws of the state of Texas; that on June 12, 1919, said company executed its bond to do business as a public warehouseman, with appellant, the American Surety Company of New York as surety, conditioned as required by law, which bond was filed with and approved by the county clerk of Dallas county, Tex., on August 13, 1919; that on January 4, 1921, plaintiff deposited with said Southwestern Forwarding Company certain automobile tires, receiving deposit receipts therefor; that on about May 5, 1921, plaintiff surrendered said deposit receipts to said Southwestern Forwarding Company, and tendered to it all warehouse charges due on said tires, and demanded possession of all the tires so held by it for plaintiff. Plaintiff claims that the Southwestern Forwarding Company failed to return to it 20 tires, for the value of which this suit is brought.

The law under and by virtue of which the bond in question was executed is article 7827½xx, Vernon's Complete Statutes of Texas 1920, which reads:

"Any person, firm, corporation, partnership, or association of persons, may become a public warehouseman under the terms and provisions of this act by filing with the county clerk of the county in which he is located, and proposes to do business, a good and sufficient bond in the sum of five thousand dollars on the condition that he will conduct his business in accordance with the terms and provisions of this act.

"Upon the filing and approval of such bond with the county clerk, it shall be the duty of the county clerk to immediately certify such fact to the commissioner of markets and warehouses, of the state of Texas. Any one injured by the violation of the terms of the bond, and the provisions of this act may recover damages to the extent of said bond; should said bond become impaired by recovery, or otherwise, the commissioner of markets and warehouses, may require such public warehouseman to file an additional bond, but in no event shall such additional bond be for a greater amount than five thousand dollars. The bond required thereunder shall be good for the term of one year from the date of filing and the right to continue as a public warehouseman shall be conditioned upon the renewal of said bond from year to year, according to the terms of this act. The form of the bond required hereunder shall be prescribed by the commissioner of markets and warehouses, and the bond provided for herein may be made by any surety company authorized to do business under the laws of the state of Texas; or by two solvent sureties to be approved by the county clerk...