Fidelity & Casualty Company of New York v. Eickhoff
| Decision Date | 13 December 1895 |
| Docket Number | 9560--(141) |
| Parties | FIDELITY & CASUALTY COMPANY OF NEW YORK v. WILLIAM EICKHOFF |
| Court | Minnesota Supreme Court |
Appeal by plaintiff from an order of the district court for Polk county, Ives, J., sustaining a demurrer to the complaint. Reversed.
Order reversed.
Van Fossen, Frost & Brown, for appellant.
The status of plaintiff in its relation to defendant is that of surety, using that term in its generic sense, or more specifically its status is that of a guarantor by reason of its special promise to answer for the debt, default and miscarriage of defendant. Baylies, Sur. § 1; McMillan v. Bull's Head Bank, 32 Ind. 11; Monson v. Drakely, 40 Conn. 552; Gallagher v Nichols, 60 N.Y. 438; Wendlandt v. Sohre, 37 Minn. 162, 33 N.W. 700; Smith v. Shelden, 35 Mich 42. As showing the broad general rules governing contracts of this nature, see Union Bank v. Beatty, 10 La. An 361; 1 Brandt, Sur. § 176; Pigou v. French, 1 Wash. C. C. 278, Fed. Cas. No. 11,161; Forest v Shores, 11 La. 416; Hollinsbee v. Ritchey, 49 Ind. 261; 1 Estee, Pleadings, § 1359; Mauri v Heffernan, 13 Johns. 58; 1 Brandt, Sur. § 183; Batchelor v. Planters' Nat. Bank, 78 Ky. 435; Mims v. McDowell, 4 Ga. 182; Snider v. Greathouse, 16 Ark. 72; Chipman v. Fambro, 16 Ark. 291; Pitts v. Fugate, 41 Mo. 405; Thomas v. Hubbell, 15 N.Y. 405; Hare v. Grant, 77 N.C. 203; Fay v. Ames, 44 Barb. 327. See Beauchaine v. McKinnon, 55 Minn. 318, 56 N.W. 1065; Dillingham v. Jenkins, 15 Miss. 479.
Defendant's liability to plaintiff is governed solely by the terms of the written contract of indemnity. Brandt, Sur. § 176; Touissant v. Martinnant, 2 T. R. 100. It is valid as constituting a rule of evidence agreed upon between the parties to govern any and all controversies between themselves arising under the contract of suretyship. The provision of the contract of indemnity respecting the effect of the voucher is valid, as an enlargement of contractual rights under the contract of suretyship existing between plaintiff and defendant. White v. Walker, 31 Ill. 422. Modus et conventio vincunt legem. Broom, Legal Maxims, 689; Gott v. Gandy, 23 L. J. Q. B. 1, per Erle, J.; Hubert v. Mendheim, 64 Cal. 213, 30 P. 633; Com. v. Perry, 155 Mass. 117, 28 N.E. 1126, and 14 L. R. A. 325; Ramsey v. People, 142 Ill. 380, 32 N.E. 364, and 17 L. R. A. 853. Where no principle of public policy is violated, parties are at liberty to forego the protection of the law. Sedgwick, Stat. & Const. Law, 86-88; Lee v. Tillotson, 24 Wend. 337; People v. Murray, 5 Hill, 468; Baker v. Braman, 6 Hill, 47; James v. Hendree's Adm'r, 34 Ala. 488; Richmond v. Dubuque & S. C. R. Co., 26 Iowa 191; Kellogg v. Larkin, 3 Pinn. 123; Richardson v. Mellish, 2 Bing. 229; Parsons v. Trask, 7 Gray, 473, 66 Am. Dec. 502, 505, note; Tanner v. Smart, 6 B. & C. 603; Utica Ins. Co. v. Bloodgood, 4 Wend. 652; Allen v. Webster, 15 Wend. 284; Land's Adm'r v. Lacoste, 6 Miss. 471; Nixon's Heirs v. Carco's Heirs, 28 Miss. 414; Sugg v. Thrasher, 30 Miss. 135; Barrett v. Carden, 65 Vt. 431, 26 A. 530; Hamer v. Johnston, 6 Miss. 698; Dickson v. Green, 24 Miss. 612; Griffiths v. Earl of Dudley, L. R. 9 Q. B. D. 357; Western & A. R. Co. v. Bishop, 50 Ga. 465; Western & A. R. Co. v. Strong, 52 Ga. 461; Galloway v. Western & A. R. Co., 57 Ga. 512; Phyfe v. Eimer, 45 N.Y. 102; Kimball v. Munger, 2 Hill, 364; Fiero v. Reynolds, 20 Barb. 275; Cole v. Western U. Tel. Co., 33 Minn. 227, 22 N.W. 385; Utica Ins. Co. v. Bloodgood, supra; Anacosta Tribe v. Murbach, 13 Md. 91; Osceola Tribe v. Schmidt, 57 Md. 98; Black and White Smiths v. Van Dyke, 2 Whart. 309. It is valid as constituting a rule of evidence agreed upon between the parties to govern any and all controversies between themselves arising under the contract of suretyship. Randel v. Chesapeake & D. Canal Co., 1 Harr. (Del.) 233, 275; St. Paul & N. P. Ry. Co. v. Bradbury, 42 Minn. 222, 44 N.W. 1; Leighton v. Grant, 20 Minn. 298 (345); Denver & N. O. Construction Co. v. Stout, 8 Col. 61, 5 P. 627. See Kihlberg v. United States, 97 U.S. 398; Sweeney v. United States, 109 U.S. 618, 3 S.Ct. 344; Chicago, S. F. & C. R. Co. v. Price, 138 U.S. 185, 11 S.Ct. 290; Insurance Co. v. Morse, 20 Wall. 445; Stevenson v. Piscataqua Ins. Co., 54 Me. 55; Sugg v. Thrasher, supra; Snell v. Brown, 71 Ill. 133; Carter v. Carter, 109 Mass. 306; Tarbell v. Whiting, 5 N.H. 63; Monongahela Nav. Co. v. Fenlon, 4 W. & S. 205; Knox v. Symmonds, 1 Ves. Jun. 369; Sweet v. Morrison, 116 N.Y. 19, 22 N.E. 276; Seibert v. Minneapolis & St. L. Ry. Co., 52 Minn. 148, 53 N.W. 1134; Crumlish v. Wilmington & W. R. Co., 5 Del. Ch. 270. If the legislature had the power to make the voucher conclusive evidence between the parties hereto certainly such an agreement between the parties themselves would be valid. County Seat of Linn Co., 15 Kan. 500; Hand v. Ballou, 12 N.Y. 541; Howard v. Moot, 64 N.Y. 262; Cooley, Const. Lim. 450 (367); People v. Cannon, 139 N.Y. 32, 34 N.E. 759; Larson v. Dickey, 39 Neb. 463, 58 N.W. 167; State v. Cunningham, 25 Conn. 195; Lumsden v. Cross, 10 Wis. 282; Allen v. Armstrong, 16 Iowa 508; Wright v. Dunham, 13 Mich. 414; Abbott v. Lindenbower, 42 Mo. 162; Sams v. King, 18 Fla. 557; Forbes v. Halsey, 26 N.Y. 53. The provision of the contract of indemnity respecting the effect of the voucher is valid by way of estoppel in favor of plaintiff against defendant. White v. Walker, supra; Harris v. Brooks, 21 Pick. 195; Bigelow, Estoppel (5th Ed.) 552, 684; Jaqua v. Shewalter, 10 Ind.App. 234, 37 N.E. 1072; Ward v. Johnson, 95 Ill. 215; Daniels v. Tearney, 102 U.S. 415; Whitney Arms Co. v. Barlow, 63 N.Y. 62; Galloway v. Western & A. R. Co., supra; Burgess v. Badger, 124 Ill. 288, 14 N.E. 850; Loveman v. Taylor, 85 Tenn. 1, 2 S.W. 29; Probstfield v. Czizek, 37 Minn. 420, 34 N.W. 896; Jacobs v. Miller, 50 Mich. 119, 15 N.W. 42; Bishop, Cont. § 286; Fowler v. Saks, 7 Mack. 570, 7 L. R. A. 649; Keller v. Ashford, 133 U.S. 610, 10 S.Ct. 494; Warrenton v. Arrington, 101 N.C. 109, 7 S.E. 652.
Irrespective of the conditions of the contract of indemnity and without regard to allegations of a specific breach of the conditions of the bond, there are allegations in the complaint sufficient to shift the burden of proof and require defendant to allege and prove other facts by way of defense, in order to prevent plaintiff's recovery. This appears on account of the fiduciary relations of the parties. Rochester v. Levering, 104 Ind. 562, 4 N.E. 203; Coggins v. Flythe, 113 N.C. 102, 18 S.E. 96; Illinois F. Ins. Co. v. Stanton, 57 Ill. 354; Smith v. Compton, 3 B. & Ad. 407; Bank v. Adams, 12 Pick. 303; Atkins v. Withers, 94 N.C. 581; Huguenin v. Baseley, 14 Ves. Jun. 273, 2 White & Tudor, L. Cas. Eq. 580, and notes; 2 Pomeroy, Eq. § 956; Bank v. Barrington, 2 P. & W. 27; Murfree, Official Bonds, § 597; State v. Wall, 2 Ired. 267; Dunton v. Doxey, 7 Jones, N. C. 222; Wilson v. Coffield, 5 Ired. 513. The subject matter of the allegations of the complaint relating to a breach of the conditions of the bond, is peculiarly within the knowledge of the defendant, and therefore, if he wishes to prevent plaintiff's recovery, the burden of proof is on him to give evidence respecting it. Abbott's Trial Brief, 86; People v. Cannon, supra; Corwin v. Shoup, 76 Ill. 246; Burton v. Blin, 23 Vt. 151.
The complaint states a cause of action, viewed as an action based upon the written contract of indemnity, without reference to those allegations of the complaint, which set forth a breach of the conditions of the bond, and a cause of action thereon in favor of the party guarantied (the employer) and against plaintiff. The essential allegations are:
A request for a bond on the part of defendant; the furnishing of such a bond to the employer and his acceptance thereof; a promise either expressed or implied to reimburse plaintiff on account of losses incurred by reason of said bonding; a breach of the conditions of the indemnifying bond; a claim upon plaintiff for payment of such loss under the bond; the payment by plaintiff to the employer of the loss occasioned by the breach of the provisions of the bond; the failure of the agent to reimburse plaintiff for the amount so paid to the employer after demand so to do. Protestant Board of School Commrs. v. Guarantee Co., 31 Low. Canada Jur. 254. See Gutridge v. Vanatta, 27 Oh. St. 366. The form of complaint has been approved. 2 Chitty, Pl. 92; 2 Boone, Code Pl. No. 514; Smith v. Jansen, 8 John. 86; Field v. Robins, 8 Ad. & El. 90; Stothert v. Goodfellow, 1 N. & M. 202; Connole v. People, 46 Ill.App. 72; Spaulding v. Mattingly, 89 Ky. 83; Altheimer v. Hunter, 56 Ark. 159, 19 S.W. 496; Ladd v. Smith (Ala.) 10 So. 836; Chester Co. v. Hemphill, 29 S.C. 584, 8 S.E. 195; People v. Foster, 133 Ill. 496, 23 N.E. 615; Benham v. United G. & L. Assur. Co., 7 Ex. 744; Towle v. National Guar. Assur. Soc., 30 L. J. Chanc. 900; Carpenter v. Solicitor, 51 L. J. Pro. 91. The complaint is good on demurrer even were it sought to avoid a transaction on the ground of fraud. If the complaint alleges facts which if proved would establish fraud as a conclusion of law, the allegation of fraud is sufficient. Andrews v. King Co., 1 Wash. 46, 23 P. 409; Bromley v. Smith, 26 Beav. 644, 671; Hess v. Young, 59 Ind. 379; Parham v. Randolph, 5 Miss. 435, 35 Am. Dec. 403; Kerr, Fraud & Mistake, 366; In re Shotwell, 43 Minn. 389, 45 N.W. 842; Cock v. Van Etten, 12 Minn. 431 (552); Story, Eq. Jur. § 190; Gale v. Gale, 19 Barb. 249; Swinfen v. Chelmsford, 5 H. & N. 890; People v. Brush, 6 Wend. 454.
An allegation that plaintiff has complied with G. S. 1894 § 3331, is unnecessary. The court will not presume that plaintiff is a transgressor against the laws. First Nat. Bank v. Bressler, 38 Ill.App. 499. Even if plaintiff has not...
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