Employers' Indemnity Corporation v. Southwest Nat. Bank

• Decision Date: 27 October 1927
• Docket Number: (No. 2057.)
• Citation: 299 S.W. 676
• Parties: EMPLOYERS' INDEMNITY CORPORATION et al. v. SOUTHWEST NAT. BANK.<SMALL><SUP>*</SUP></SMALL>
• Court: Texas Court of Appeals

Page 676

299 S.W. 676

EMPLOYERS' INDEMNITY CORPORATION et al. v. SOUTHWEST NAT. BANK.^*

(No. 2057.)

Court of Civil Appeals of Texas. El Paso.

October 27, 1927.

Rehearing Denied November 23, 1927.

Appeal from District Court, Dallas County; Louis Wilson, Judge.

Suit by the Southwest National Bank against the Employers' Indemnity Corporation and others. Judgment for plaintiff, and defendants appeal. Affirmed in part, and reversed and remanded in part.

Collins & Houston and Lewis T. Carpenter, all of Dallas, for appellants.

Touchstone, Wight, Gormley & Price and Thomas & Storey, all of Dallas, for appellee.

HIGGINS, J.

This suit was brought by appellee against Western Indemnity Company, Western Casualty & Guaranty Company, and Employers' Indemnity Corporation. For brevity, the defendants will be designated, respectively, as the Western Company, the Casualty Company, and the Employers' Corporation.

The action was to recover the sums of $5,000 and $500, paid out by appellees as attorney's fees under circumstances now to be stated. Under the settled rule, the evidence and the inferences properly to be drawn therefrom will be viewed in the aspect most favorable to appellee.

October 11, 1912, the Commonwealth National Bank of Dallas, Tex., at the instance of the Casualty Company, issued its certificate of deposit in favor of what will be hereinafter designated as the French Bank, for $100,000, signed by its cashier, R. P. Wofford, and two days later the Commonwealth Bank, by its president, J. W. Wright, cabled the French Bank certifying to such deposit. In fact, no such deposit had been made, and to secure the Commonwealth Bank against such certificate the Casualty Company deposited with the Commonwealth Bank 200 gold bonds for $1,000 each, secured by deed of trust on land in Dallas.

By process not necessary to detail, the Security National Bank of Dallas succeeded to the liability and rights of the Commonwealth Bank in the premises, and appellee in turn has succeeded to the liability and rights of the Security Bank.

On October 10, 1914, the French Bank (Credit Foncier Des Etats Unis) filed suit in the United States District Court at Dallas against Wright, Wofford, and the banks to recover said sum of $100,000. That suit was not disposed of until 1923, when it was determined in favor of the defendants.

On June 29, 1915, the Casualty Company, as principal, and the Western Company, as surety, executed and delivered a bond which provides:

"That whereas, the Western Casualty & Guaranty Company has heretofore hypothecated with the Security National Bank of Dallas 200 of those certain second mortgage lien 6 per cent. gold bonds, secured by a deed of trust of date March 30, 1912, to T. L. Camp, trustee, on those certain tracts or parcels of land (here follows description of land) for the purpose of indemnifying the said Security National Bank of Dallas against any loss or damage by reason of a certain suit or the cause of action therein involved, being No. 2815, styled "Credit Foncier Des Etats Unis v. Commonwealth National Bank of Dallas et al., in the District Court of the United States for the Northern District of Texas, at Dallas"; and

"Whereas, the Western Casualty & Guaranty Company had requested the Security National Bank to allow it to substitute 1,000 shares of the capital stock of the Western Indemnity Company for the said 200 — $1,000 bonds; and

"Whereas, the Security National Bank of Dallas has agreed to allow such substitution upon the delivery to it of a bond in the penal sum of $125,000, as herein conditioned:

"Now, therefore, know all men by these presents: That we, Western Casualty & Guaranty Company, as principal, and Western Indemnity Company, as surety, acknowledge ourselves firmly bound unto the Security National Bank of Dallas, it successors and assigns, in the penal sum of $125,000, conditioned that the said Western Casualty & Guaranty Company shall well and truly save and hold harmless and fully and completely indemnify the Security National Bank of Dallas, Tex., its successors and assigns, against all loss, damage, liability, expense, or costs, by reason or on account of the aforesaid suit, or the cause of action involved therein. That upon compliance with the said condition this bond shall become null and void, otherwise, it shall remain in full force and effect."

Appellee has succeeded to all of the rights of the obligee in said bond, the Security National Bank. As to that no point is made.

The Western Company disposed of all of its assets to the Employers' Corporation, and the former ceased to do business. At that time they entered into a contract, the pertinent terms of which read:

"This contract of insurance, made this 31st day of March, 1921, by and between Employers' Indemnity Corporation of Kansas City, Mo. (hereinafter called the Employers') and the Western Indemnity Company of Dallas, Tex. (hereinafter called the Western), witnesseth:

"Whereas, the Western desires to retire from the casualty insurance business and to liquidate its business, and for such purpose desires to relieve itself from its entire liabilities as computed and shown upon page 5 of the statement of the Western, filed with the Insurance Department of the state of Texas, plus all liability which has accrued subsequently to December 31, 1920; and

"Whereas, the Western desires the Employers' to assume and discharge said liabilities (except liability to stockholders) and to liquidate the insurance business of the Western; and

"Whereas, the Employers' is willing to assume such liabilities and pay the same upon the payment by (of) the Western to the Employers', as hereinafter provided:

"Now, therefore, this agreement, witnesseth:

"First. The Employers' does hereby reinsure and assume, all and singular, the outstanding policies of the Western covering all lines of insurance issued by the Western, and agrees to pay all losses accrued and unpaid, and all losses hereinafter arising within the effective period, under each and every such policy; and the Employers' further agrees to assume and discharge each and every other item of liability listed upon page 5, entitled `V. Liabilities,' of the annual statement of the Western as of December 31, 1920, filed with the commissioner of banking and insurance of the state of Texas, save and except the item on line 49 of said page, entitled `Capital paid up,' to the amount of $2,000,000 ($300,000); it being expressly understood that the liability of Employers' to the stockholders of the Western shall be only to pay over to said stockholders or to some trustee for their benefit, the balance remaining for disbursement to such stockholders under the terms of this agreement hereinafter expressed."

Subsequent to the termination of the litigation in 1923 of the suit in the federal court, the appellee paid to its attorneys therein, Leake & Henry, $5,000, for their fee, and upon refusal of defendants to pay same, brought this action to recover same, together with $500 attorney's fee paid to its attorney in the present litigation. It was agreed that the last-named fee was a reasonable charge for the service rendered.

Upon the trial but two issues were submitted. Appellants did not request the submission of additional issues. The jury found, first, it was necessary, under the facts and circumstances of the case, for the Security National Bank to employ the services of the firm of Leake & Henry in the federal court case; second, a reasonable attorney's fee for the services rendered the bank in the suit was $5,000. Judgment was rendered in favor of appellee for the amount sued for.

For convenience, the second proposition will be first considered. This is to the effect that plaintiff cannot recover because the attorney's fee expended in defending the suit in the federal court was not named among the things indemnified against by the bond.

The language of the bond has been...