Davis v. West Louisiana Bank

• Decision Date: 04 February 1924
• Docket Number: 26328
• Citation: 155 La. 252,99 So. 210
• Court: Louisiana Supreme Court
• Parties: DAVIS et al. v. WEST LOUISIANA BANK et al

99 So. 210

155 La. 252

DAVIS et al. v. WEST LOUISIANA BANK et al

No. 26328

Supreme Court of Louisiana

February 4, 1924

Appeal from Twelfth Judicial District Court, Parish of Vernon; John H. Boone, Judge.

Action by Charles I. Davis and others against the West Louisiana Bank and others. Judgment for plaintiffs, and defendants appeal.

Affirmed.

P. L Ferguson, of Leesville, for appellants.

C. E Hardin and L. D. Woosley, both of Leesville, for appellees.

OPINION

ROGERS, J.

The West Louisiana Bank, of Leesville, as the duly elected fiscal agent of the parish of Vernon, executed an indemnity bond in the sum of $ 7,500 in favor of the treasurer of said parish with the National Surety Company, of New York as surety.

While the contract of suretyship was in force, the bank closed its doors and suspended the payment of its depositors. On the day of the failure the parish of Vernon had on deposit the sum of $ 19,343.87.

This suit was brought by the treasurer of the parish and by the parish itself, through its police jury, against the liquidator of the bank and the surety on the indemnity bond, to recover the amount of said bond with interest and attorney's fees.

Judgment was for plaintiffs, and the defendant surety company has appealed.

Appellant seeks to escape liability on its bond because of the alleged violation by plaintiffs of three conditions of the bond, viz.: (1) That plaintiffs had notice and knowledge of the unsound condition of the bank and failed to withdraw the deposit; (2) estoppel for failure to bring suit within 90 days from the date of default by the bank; and (3) if any liability whatever attaches under the bond, it is limited to such proportion of the penalty as the said penalty bears to the total sum of the deposit.

Defendant surety company also pleaded in bar of the plaintiffs' action "the prescription of three months and one year, both in accordance with the terms of the contract and in accordance with law."

1. This ground of defense has utterly failed. There is no evidence whatever in the record showing that plaintiffs had any notice or knowledge of the insolvent condition of the defendant bank.

2. It is unnecessary to discuss the legality vel non of the 90-day clause in the contract of suretyship. The benefit, if any, accruing to the surety company by reason of said stipulation, was waived and renounced by said company when it tendered to plaintiffs the amount which it conceived and admitted to be its liability under the bond.

Defendant's averment, in its answer, that said tender was made by way of compromise is without merit. The testimony shows otherwise. Beyond this, the amount offered militates against the compromise theory. It was the exact amount admittedly due under the surety company's interpretation of its contract and not an arbitrary figure proposed merely for the purpose of buying peace.

3. The bond was given by the defendant bank in pursuance of the requirements of the fiscal agency laws of the state (Act 205 of 1912 and its amendments). It is therefore a statutory bond, which was the only kind of bond the police jury was authorized to accept. The statute must be read into the bond. Superadded stipulations must be disregarded. Necessary obligations which have been omitted must be supplied.

"Where a depository bond executed pursuant to the provisions of" a statute "contains the exact conditions imposed by the statute and, in addition, other conditions which are not provided by the statute, tending to limit or evade liability, the bond will be upheld as to the conditions imposed by the statute, and the other...