American Surety Company of New York v. Blake

• Decision Date: 18 December 1933
• Docket Number: 6068
• Citation: 54 Idaho 1,27 P.2d 972
• Parties: AMERICAN SURETY COMPANY OF NEW YORK, a Corporation, Appellant, v. JESSIE M. BLAKE, Executrix, and JAMES BRUCE BLAKE, Executor of the Last Will and Testament of JAMES W. BLAKE, Deceased, Respondents
• Court: Idaho Supreme Court

27 P.2d 972

54 Idaho 1

AMERICAN SURETY COMPANY OF NEW YORK, a Corporation, Appellant, v. JESSIE M. BLAKE, Executrix, and JAMES BRUCE BLAKE, Executor of the Last Will and Testament of JAMES W. BLAKE, Deceased, Respondents

No. 6068

Supreme Court of Idaho

December 18, 1933

APPEAL from the District Court of the Second Judicial District, for Clearwater County. Hon. Everett E. Hunt, Judge.

Action by the American Surety Company of New York against Jessie M Blake, executrix, and James Bruce Blake, executor, of the last will and testament of James W. Blake, deceased, to recover on a contract of indemnity. From a judgment in favor of the defendants, and from an order overruling its motion for a new trial, the plaintiff appeals.

Action to recover on contract of indemnity. From a judgment for defendants, and order overruling motion for new trial plaintiffs appeal. Affirmed.

Judgment and order affirmed. Costs to respondents.

Guy W Wolfe, for Appellant.

The jurisdiction of specific performance of indemnity contracts is in equity. (14 R. C. L. 58; Michigan State Bank v. Hastings, 1 Doug. (Mich.) 225, 41 Am. Dec. 549, 570.)

The order of trial is statutory unless the judge for special reasons otherwise directs. (Section 7-206, I. C. A.; Harrison v. Russell & Co., 17 Idaho 196, 105 P. 48.)

The presumption of the receipt of a letter properly mailed and addressed is overcome by positive evidence that it was not received. (Ault v. Interstate Sav. & Loan Assn., 15 Wash. 627, 47 P. 13; Gibson v. Rouse, 81 Wash. 102, 142 P. 464; Conklin v. Shaw, 67 Colo. 169, 185 P. 661.)

A. H. Oversmith and Leo McCarty, for Respondents.

A letter deposited in the mail, properly stamped, is presumed to reach the addressee, and especially so if the letter so mailed has a return address thereon and such letter was not returned to the sender. (Matlock v. Citizens Nat. Bank, 43 Idaho 214, 250 P. 648, 50 A. L. R. 1418; Prescott etc. Co. v. City of Cherryvale, 134 Kan. 53, 4 P.2d 457; Merchants & Manufacturers Assn. v. First Nat. Bank of Mesa, 40 Ariz. 531, 14 P.2d 717.)

"A carbon impression of a letter made with the same stroke of the keys may be treated as an original. Hence, either may be received as primary evidence. Upon denial that the original had been received, a carbon copy is properly admitted in evidence." (Prescott etc. Co. v. City of Cherryvale, 134 Kan. 53, 4 P.2d 457; Martin & Lanier Paint Co. v. Daniels, 27 Ga.App. 302, 108 S.E. 246.)

WERNETTE, J. Budge, C. J., Givens, Holden, JJ., and MORGAN, J., Concurring.

OPINION

WERNETTE, J.

April 22, 1915, the appellant, American Surety Company, became surety upon a depository bond to the state of Idaho for the Fidelity State Bank of Orofino. In executing said bond the appellant required an indemnity agreement, which was executed by James W. Blake and P. H. Blake, then stockholders, and president and cashier, respectively, of the Fidelity State Bank of Orofino, wherein they agreed to indemnify and save the surety harmless from loss under the bond. The bank became insolvent, April 8, 1921, and the appellant under the terms of its bond paid the state $ 1,291.40, as its share of the loss of state deposits, which amount it is now seeking to recover.

Previously this case was before the court and is reported in 45 Idaho 159, 261 P. 239. In the former opinion it was determined that as to the indemnitor, P. H. Blake, then deceased, his estate was not liable under the indemnity agreement because the action was barred by the statute of limitations, with reference to the time of filing claims against decedent's estate. As to the indemnitor, James W. Blake, then living, the case was sent back for a new trial. Prior to the second trial James W. Blake died and the executor and executrix of his estate, respondents herein, were substituted as parties.

The respondents made the defense that on April 8, 1921, when the bank became insolvent, the indemnity agreement was no longer in force, and had not been since May 1, 1918. This defense was based on a letter, admitted in evidence, dated May 1, 1918, written by James W. Blake, addressed to "American Surety Company, Salt Lake City, Utah," which letter stated, "this letter will be notice to cancel any and all responsibilities in connection with the said bond, or any other bond in connection of the Fidelity State Bank," etc. Appellant denied ever having received said letter.

The case was tried to a jury, and a verdict was returned for respondents; thereafter appellant filed a motion for new trial, which motion was denied. The appellant prosecutes this appeal from the judgment and the order denying the motion for new trial.

This case having previously been before this court on appeal, all questions of law therein decided must stand as the law in this case.

Appellant has set forth numerous assignments of error, but it appears to us that but five essential propositions need be considered for a correct determination of the issues raised: First, is this an equity case so that it should have been tried before the court instead of a jury? Second, is the evidence sufficient on the part of the respondents, with reference to the notice of a termination of liability on the part of the indemnitors; to raise a question of fact to be submitted to the jury, or should the court have held as a matter of law that the notice was insufficient? Third, was error committed in permitting respondents' exhibit number one to be admitted in evidence? Fourth, did the court err in permitting defendants and respondents to open the cause by presenting respondents' evidence first to the jury and to close the trial with rebuttal testimony? Fifth, did the court err in not permitting appellant to prove certain facts by the testimony of Eugene A. Cox?

These propositions will be considered in their order. Appellant seriously contends that this is an action in specific performance for the recovery of a loss under a contract of general indemnity wherein the indemnitors agreed to "at all times indemnify and save the surety harmless," etc., and that therefore the cause rests entirely within the jurisdiction of equity and should have been tried by the court instead of to a jury.

Appellant, prior to the trial, demanded and made a motion to the effect that the case be tried before the court, which, however, was refused. Very respectable authority is cited by appellant in support of its position. We believe the rule stated by appellant is sound and should be followed wherever the facts show that equitable features are involved, calling for the interposition of equity. But where the facts and circumstances do not reveal particular equitable considerations, then it will be held that appellant has an adequate remedy at law, for which reason equity will refuse to interfere. It was so held in White v. Fratt, 13 Cal. 521, cited with approval in the case of Josephian v. Lion, 66 Cal.App. 650, 227 P. 204. The latter case being cited by appellant in support of its contention. In said case the court pointed out the particular equitable features involved, distinguishing the same from White v. Fratt, indicating that if the facts were not such especially calling for the interposition of equity because of the peculiar circumstances the court would have considered it as a law case.

In the instant case there are no peculiar equitable features. If respondents are liable at all, the damages resulting to the appellant by reason of the breach of the indemnity agreement are certain, namely, the amount that appellant paid to the state, $ 1,291.40, with interest. In other words, it is an action to recover a specific sum of money claimed. The action was not brought for the reformation, re-execution or the cancelation, rescission or discharge of any instrument, which would call for equitable jurisdiction. That an action at law will lie for a breach of a contract of indemnity seems to be recognized by the author of Ruling Case Law, wherein it is said:

"According to some authorities a contract to indemnify can be specifically enforced in equity before there has been any such breach of the contract as would sustain an action at law, on the equitable principle that a person indemnified against loss, is not obliged to wait until he has suffered, and perhaps been ruined, before having recourse to judicial aid." (14 R. C. L. 58.)

We hold the court did not err in submitting the case to the jury.

The second contention of appellant, above stated, is to the effect, as to whether the evidence on the part of the respondent, with reference to termination of liability on the part of the indemnitors was sufficient to raise a question of fact for the jury, or should have been held insufficient as a matter of law by the court. On the former appeal of this case to this court, it was definitely held that the indemnitors to the surety company could, by notice, absolve themselves from liability, after a reasonable time in which the surety could secure its own release from obligation to the state, this court saying:

"It is true that the notice of the indemnitors to the surety company was sufficient to absolve them from further liability accruing after a reasonable time within which the surety could secure its own release, if it chose, by giving notice of withdrawal under C. S., sec. 314. (Gay v. Ward, 67 Conn. 147, 34 A. 1025, 32 L. R. A. 818; Furst v. Buss, 104 Kan. 245, 178 P. 411; 31 C. J., p. 429, sec. 23; 2 Black on Rescission and Cancellation, p. 875; Spencer on Suretyship, sec. 103.)"

On petition for rehearing this court held on the question of mailing of the letter tending to relieve respondents of liability, that upon a new trial the mailing and receipt of the letter was to be an open question; that it was not to be...