Bessinger v. National Sur. Corp.

• Decision Date: 26 October 1945
• Docket Number: 15774.
• Citation: 35 S.E.2d 658,207 S.C. 365
• Parties: BESSINGER v. NATIONAL SURETY CORPORATION et al.
• Court: South Carolina Supreme Court

35 S.E.2d 658

207 S.C. 365

BESSINGER v. NATIONAL SURETY CORPORATION et al.

No. 15774.

Supreme Court of South Carolina

October 26, 1945

Appeal from Common Pleas Court of Bamberg County; E. C. Dennis Judge.

Action by Cecil Bessinger against the National Surety Corporation as surety on the official bond of L. O. Wiggins, a state highway patrolman, for personal injuries alleged to have been caused by breach or abuse of such patrolman's official duties and powers. From an order granting the patrolman's motion to be made a party defendant and an order granting defendant corporation's motion for a new trial after a jury's verdict against it, plaintiff appeals.

Order of Judge Henderson follows:

This is a motion by the defendant, National Surety Corporation and by L. O. Wiggins, for an order bringing in Mr. Wiggins as a party defendant. The action is one against the surety on the bond of Mr. Wiggins, who is a State Highway patrolman and whose bond was given pursuant to section 6004 of the Code.

Section 404 of the Code provides for the bringing in of party defendants, and section 409 provides that when a complete determination of a controversy can not be had without the presence of other parties, the Court must cause them to be brought in. Section 657 provides that the judgment may determine the ultimate rights of the parties on each side as between themselves. See also 47 C.J. 129, 130.

In the case of Pearce & Co. v. American Surety Company, 173 S.C. 77, 174 S.E. 902, 903, it was held that a surety was entitled to have the employee brought in as a party defendant, in order that a complete determination of all questions might be had. The Court said: 'The making of Moore a party defendant would permit a judgment against him in favor of the surety company, in the event Pearce &amp Co. established its claim against the surety company, thereby saving the necessity of a future suit of the surety company against Moore upon the indemnity agreement. Unless Moore be made a party to the present suit, he would not be bound by the result of it, and the surety company might be compelled to pay an alleged shortage on the part of Moore which, in reality, might not have existed. In justice to all parties, Moore should be brought in as a party defendant.'

The Court held in the case of Miller & Barnhardt v. Gulf & Atlantic Insurance Co., 132 S.C. 78, 129 S.E. 131, 132, that in an action on a sheriff's bond for damages caused by failure to take possession of certain attached property, the sheriff was a proper party, and the Court's refusal to permit him to become a party was an abuse of discretion. The Court said:

'The motion to have the sheriff made a party defendant was, under the circumstances, so just and reasonable that it should have been granted unless it appeared to the trial judge, in the exercise of this discretion, that some good reason existed for refusing it. The sheriff was the principal obligor upon the bond. The plaintiff's cause of action was based upon his alleged negligence and mismanagement; no one was better qualified to explain the doubtful circumstances of the transaction than the sheriff. The surety company, upon payment of the plaintiffs' demand, would be entitled to indemnity from the sheriff; it could not possibly be detrimental to the interests of the plaintiffs, if entitled to recover, to have a judgment against two rather than one. It would be a serious detriment to the surety company, sued alone, to have to pay the judgment and then institute an action against the sheriff for indemnity in his own county. It is in the line of public policy that all differences between interested parties be adjusted in the one litigation.

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'It occurs to us that every conceivable ground was present to induce the conclusion that the bringing in of the sheriff as a party defendant was just, reasonable, and in line with the policy of the law 'to prevent a multiplicity of suits and that there may be a complete and final decree between all parties interested'; certainly 'a consummation devoutly to be wished,' a desirable result.'

Also indirectly, because relating to cosureties, see the case of Peurifoy, Receiver, v. Mauldin, 142 S.C. 7, 140 S.E. 253.

It is to be noted that in all three of these cases the Circuit Judges were reversed because of failure to bring in the parties.

Is there any essential difference in principle between these cases and the present one?

The plaintiff contends that in the Pearce case the fact that the principal, Moore, had given to the surety company an indemnity agreement constitutes a difference. In my opinion this is not a real distinction, for the reason that under the law there is an implied agreement on the part of a principal that he will reimburse his surety for any losses sustained by the surety on his account.

'Sec. 221. Right to Reimbursement. Irrespective of the existence of an express contract of indemnity it is an established rule of law, based on equitable consideration, that where one person is in the situation of a mere surety for another, whether he became so by actual contract or by operation of law, and pays or is compelled to pay the debt which the other in equity and justice ought to have paid, or extinguishes it so that it is no longer a debt against the other, he is entitled to relief against the other, who was in fact the principal debtor, the law in such cases implying a promise on the part of the principal to reimburse the surety for the amount paid. This is the rule whether the surety is a compensated surety or an individual.' 50 Am.Jur. 1049.

'When a contract of surety is made, there arises, in the absence of an express agreement, an implied contract that the principal will indemnity the surety for any payment the latter may make to the creditor in compliance with the contract of suretyship.' 50 C.J. 255.

In the case of Andrews v. United States Fidelity & Guaranty Co., 154 S.C. 456, 151 S.E. 745, it was held, as shown by the fourth syllabus, that 'even in absence of agreement in bond, either principal upon joint bond impliedly undertakes to indemnity surety for loss sustained by breach of bond either on his part or on part of the other principal.'

The plaintiff further contends that this case is to be distinguished from the Miller case in that the bond in that action was signed by Sheriff Burch as well as by the surety company. I do not think that this brings any difference in principle, but that the implied agreement to hold the surety harmless would still govern. Indeed, in the Pearce case the Supreme Court, in discussing the Miller case, said that 'the principal difference in the case now under consideration and the one just cited is that the bond sued upon in that case was signed by the sheriff as well as the surety company, while in the present case the bond was not signed by Moore but by the surety company only. This difference in the two cases we conceive to be of fact rather than of principle. The unanswerable reasoning in the Miller case can well be used in the present case with the same result.'

It is contended also that a distinction should be made between a case involving a paid surety and one concerning a personal surety. There is without doubt a distinction made in the construction of an ambiguous contract, the paid surety being held to a stricter construction. Massachusetts Bonding & Insurance Co. v Law, 149 S.C. 402, 147 S.E. 444. However, as stated in 50 Am. Jurisprudence 1117, 'the rights of a surety are to be determined by his legal status as a surety, and not by the reason which may have induced him to enter into that status; that fact that the surety is compensated does not deprive him of his rights under the rules governing the relation of principal and surety; there is no distinction in...