Frank Fehr Brewing Co. v. Mullican

• Decision Date: 13 February 1902
• Citation: 66 S.W. 627
• Parties: FRANK FEHR BREWING CO. v. MULLICAN et al. [1]
• Court: Kentucky Court of Appeals

66 S.W. 627

FRANK FEHR BREWING CO. v. MULLICAN et al. ^[1]

Court of Appeals of Kentucky.

February 13, 1902

Appeal from circuit court, Daviess county.

"Not to be officially reported."

Action by Frank Fehr Brewing Company against J. S. Mullican and J A. Lyddane on a bond. Judgment for defendants, and plaintiff appeals. Affirmed.

Birkhead & Clements, for appellant.

Walker & Slack, for appellees.

HOBSON J.

This was an ordinary action brought by appellant against appellees on a bond signed by them as sureties for L. T. Mullican. The case was tried before the court, who filed the following findings of fact: "The court finds from the record and evidence in this action that on the 12th of July, 1898, the plaintiff entered into a contract with L. T. Mullican to furnish beer at a stipulated price, etc., which he was to sell and account for. He, among other things, was to pay for all beer sold at the prices stipulated thirty days after delivery, and sooner if the relations between them should terminate. The contract contained divers other stipulations and the defendants, J. S. Mullican and J. A. Lyddane, became the sureties of L. T. Mullican for the faithful performance of his contract. I find from the evidence that L. T. Mullican failed from the very beginning of his contract to pay as stipulated, and proceeded to violate that part of his undertaking to pay for all beer sold him at the end of thirty days; and that on the 17th of November, 1898, four months after entering into the contract, he had fallen behind in the sum of $1,661.36, and that plaintiff, without notification to the sureties of L. T. Mullican, entered into an arrangement with him by which he obtained from him a nearly paid up life policy for $3,000, and entered into a writing, a copy of which is filed with the answer of J. S. Mullican and J. A Lyddane. I find from the evidence that as part inducement to this contract of November 17th and the transfer of the policy plaintiff agreed with L. T. Mullican that his sureties were to be released from further liability. I find that, on the 28th day of December, J. A. Lyddane, becoming uneasy, wrote plaintiff for information as to how L. T. Mullican was getting on with them; and on the next day, the 29th of December, received an answer from plaintiff that he was O K., making no reference to his previous indebtedness, and disclosing nothing of the transaction of November 17th." On these facts the court found, as a matter of law, that the sureties were released by the concealment on the part of plaintiff of the default of the principal, although he had arranged and paid out of his own means, on the ground, as stated by the court, that they would not likely "have continued on his bond, or been willing to any further risk after November 17th, had they known of the large sum in which the principal had fallen behind, and a disclosure became a positive duty when Lyddane wrote to inquire." The letters on which this finding is based are as follows:

"Owensboro Ky. Dec. 28th, 1898. Frank Fehr Brewing Co., Louisville, Ky.--Gentlemen: I write you confidentially to inquire whether L. T. Mullican is keeping his accounts square with you. I am on his bond to your company, and have a right to ask this information. Please send me a statement of his accounts, so that I may be advised as to his standing with you. This letter is confidential between your company and me, and by furnishing me the information desired you will greatly oblige. Yours truly, J. A. Lyddane."

"Louisville Ky....