Fid. & Deposit Co. of Md. v. Richard.
| Decision Date | 29 May 1940 |
| Docket Number | No. 4533.,4533. |
| Citation | 103 P.2d 628,44 N.M. 424 |
| Court | New Mexico Supreme Court |
| Parties | FIDELITY & DEPOSIT CO. OF MARYLANDv.RICHARD. |
OPINION TEXT STARTS HERE
Appeal from District Court, Lincoln County; Numa C. Frenger, Judge.
Action by the Fidelity & Deposit Company of Maryland, a corporation, against F. E. Richard for contribution from defendant as a cosurety. From a judgment for the plaintiff, defendant appeals.
Affirmed.
Where statutory depository bond was executed by additional surety on understanding that additional bond was to secure only such county deposits in bank as would at any time be in excess of a certain sum and original compensated surety had no knowledge of additional bond and bank thereafter failed with county deposits in sum less than that at which it was understood additional surety's liability was to begin and compensated surety paid the loss, compensated surety was entitled to pro rata contribution of amount paid from the additional surety notwithstanding that compensated surety had been fully compensated for carrying risk on full amount of deposit, since parties were bound to know that they could not by contract or otherwise limit the statutory obligation. Comp.Laws 1929, § 112-108.
George A. Shipley and Lorna M. Shipley, both of Alamogordo, and John E. Hall, of Carrizozo, for appellant.
Botts & Botts, of Albuquerque, for appellee.
Suit was brought in the district court by plaintiff-appellee, surety on a public money depository bond of the Lincoln State Bank of Carrizozo, in favor of the County of Lincoln, against defendant-appellant, F. E. Richard, one of the sureties upon another and additional bond, subsequently executed, for the purpose of requiring contribution from the second sureties.
A judgment was rendered by the trial court in favor of the plaintiff-appellee and against the defendants. From this judgment one defendant, F. E. Richard, appeals to this court. The question thus presented is that of whether, under the circumstances, contribution should have been decreed.
The case was tried to the court without a jury and upon a stipulation of facts. We do not find it necessary to quote in full the stipulation. The salient features thereof, as they affect this appeal, are as follows:
The Lincoln State Bank, hereafter to be referred to as the bank, was a depository of the public moneys of Lincoln County, and appellee, hereafter to be referred to as the Surety Company, was surety for the bank for the protection and security of funds of said county, in the amount of $10,000.
An anticipated deposit of County funds in the bank, in an amount beyond the $10,000 for which the surety depository bond had already been given, required this additional bond or security. Appellant Richard and another were induced to sign such a new and additional surety bond upon the representation and with the understanding as between Richard and the bank, and the County Commissioners of Lincoln County, that this additional bond to be so given was to secure only such county deposits in the bank as would, at any time, be in excess of $10,000; and, for any loss that might be occasioned, the said appellant would be liable only for such excess amount which should be on deposit at the time of loss.
The bank thereafter failed, but with less than $10,000 of said county funds on deposit. Demand was made upon the surety company and it eventually paid the claim in an amount less than $4,000. It is for a pro rata contribution of the amount of this judgment, plus an additional amount incurred by the surety company as expenses in litigating the claim with the county, which brought on this suit.
Some question arises here over the interpretation to be placed upon the stipulation of facts upon which the case was tried, as to whether it supports the surety company's view that there was in fact no agreement that appellant's bond should be so limited as to liability. That point, we think, is without merit, however. The stipulation rather fairly and clearly supports appellant's view that there was, as between the bank, the county authorities and appellant (and his co-surety), an agreement and understanding that liability on the second bond would be limited to coverage of deposits only in excess of $10,000, as aforesaid. The surety company did not know that there was a second bond. It was not a party to the “agreement”, of course.
The important question presented then, is not whether there was such an agreement to limit the liability of the second bond, but whether the parties could, in fact, make an agreement to so limit liability. This becomes now the one question in the case.
Both bonds, that of the surety company as well as that given by the appellee, were statutory bonds, substantially in the statutory form as provided by Chap. 76, Laws of 1923, as amended by Laws of 1925, Ch. 123, Sec. 112-108, N.M.Comp.Laws 1929. Section 8 of this act prescribes that the condition of the bond shall be that the principal shall render monthly statements showing in detail “the daily balance of said moneys, so held by said principal on deposit, and the amount of interest accrued thereon, for the last preceding month, and shall pay over said deposit and said interest, upon the check, order or demand in writing of the officer thereunto duly authorized,” and shall calculate and pay interest, “and shall in all respects save and keep the said ................ safe and harmless by reason of the making of said deposit or deposits, and shall generally do and perform each and everything required of depositories of public funds to be done and performed” by the provisions of a certain Act of the State of New Mexico, entitled, etc. By the same section, it is provided that no public moneys “shall be deposited in any bank *** until such bank is qualified to receive deposits of public moneys by depositing collateral security or by giving bond as provided by this Act.”
Appellee surety company urges that, since the purpose of giving the bond under consideration was to qualify the principal, Lincoln State Bank, as a depository of public money, and since the Act provides qualification of a depository only by the giving of such a bond as is thereby required, and, since the Act provides that such bond be conditioned for the periodical accounting for “the daily balance of said moneys, so held by said principal on deposit”, and for the payment over of “said deposit and said interest, upon the check, order or demand in writing of the officer thereunto duly authorized,” and since it does not provide for qualification of a depository by the giving of a bond limited to an accounting for and payment of any deposit in an amount less than the whole, therefore, any such agreement so attempting to limit the liability on the bond would not be enforceable.
The bond under consideration, under its terms as written and under the requirements of the statute, was for the payment, on demand, of the entire deposit, limited only by the amount of the penalty of the bond, just as was the earlier bond of the appellee, and, therefore, both bonds were for the same indebtedness and created a common liability, appellee claims. The sureties on the two bonds were co-sureties...
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United States v. Horvath Brothers, Inc.
...parties determined their relationship by agreement since there was an express right of subrogation. In Fidelity & Deposit Co. of Maryland v. Richard, 44 N.M. 424, 103 P.2d 628 (1940), it was held that liability under a statutory bond could not be altered by oral agreement, leaving the parti......