Guaranty Co. of North America v. Charles

• Decision Date: 30 July 1912
• Citation: 75 S.E. 387,92 S.C. 282
• Parties: GUARANTY CO. OF NORTH AMERICA v. CHARLES. [D1]
• Court: South Carolina Supreme Court

75 S.E. 387

92 S.C. 282

GUARANTY CO. OF NORTH AMERICA v. CHARLES. ^[D1]

Supreme Court of South Carolina

July 30, 1912

Appeal from Common Pleas Circuit Court of Greenville County; Ernest Gary, Judge.

"To be officially reported."

Action by the Guaranty Company of North America against John H Charles, Sr. From judgment for plaintiff, defendant appeals. Reversed and remanded.

The following are the exceptions referred to in the opinion:

"The defendant appeals to the Supreme Court from the judgment entered upon the verdict rendered in this case at November term, 1910, and will move the Supreme Court to reserve the same and grant a new trial upon the following exceptions:

"(1) The presiding judge erred in admitting in evidence the statements, Exhibits A, B, C, D, E, F, and G, upon the ground that the same are copies, and that the originals are the best evidence thereof.

"(2) The presiding judge erred in admitting in evidence the statements, Exhibits A, B, C, D, E, F, and G, upon the ground that they are ex parte statements furnished by the express company to the plaintiff, and that the defendant should not be bound thereby .

"(3) The presiding judge erred in holding that the voucher or receipt signed by Southern Express Company showing a payment by the Guaranty Company to the express company of $424.40 on account of claims held by the express company against J. H. Charles, Jr., for defaults in his duty as messenger, was, under the defendant's contract of guaranty, conclusive evidence (except for fraud) of the fact and amount of his liability thereunder, and in directing a verdict for the plaintiff upon this ground. Specifications: (1) Said stipulation is unreasonable. (2) Said stipulation is contrary to public policy and therefore void. (3) Said stipulation has the effect of ousting the courts of jurisdiction in determining the fact and amount of the alleged defaults of the messenger. (4) Such stipulation amounts to constituting the Guaranty Company the absolute arbitrator and Supreme Court in its own case, which is unreasonable, contrary to public policy, and void. (5) Such stipulation amounts to the absolute submission to an arbitrator, before any controversy has arisen, all matters of dispute that may arise under a contract, and depriving the courts of their supervisory control of such disputes, which is unreasonable, contrary, to public policy, and void. (6) Such stipulation amounts to the submission to one of the parties to a contract the final and absolute decision of questions arising under the contract, depriving the other party of his right to inquire into the reasonable care and honest judgment of such arbitrator; the object of the contract not being to gratify taste, serve personal convenience, or satisfy individual preference.

"(4) The presiding judge erred in holding that the contract of the defendant could not be impeached except for fraud, that there was no evidence of fraud, and in directing a verdict for the plaintiff upon this ground. Specifications: (1) The defendant should have been allowed to show that the statements furnished to the Guaranty Company by the express company showing alleged defaults of the messenger were incorrect and unfounded in fact. (2) There was sufficient evidence of fraud, gross negligence, and collusion to require the submission of this issue to the jury. (3) The defendant had the right to show that the statements and settlement between the Guaranty Company and the express company were not the result of reasonable care and honest judgment; that there was sufficient evidence of these facts to require the submission of this issue to the jury.

"(5) The presiding judge erred in not holding that the defendant was not liable for the suit brought upon his guaranty after J. H. Charles, Jr., attained his majority on November 29, 1908, for the reason that said contract of guaranty provides that 'when the above-named party reaches mature age this obligation becomes canceled."'

Cothran, Dean & Cothran, of Greenville, for appellant. Haynsworth & Haynsworth, of Greenville, for respondent.

GARY C.J.

The following statement appears in the record: "This action was instituted in the court of common pleas, for Greenville county, on the 8th day of October, 1909. The plaintiff prays judgment for the sum of $424.40 with interest from December 2, 1908, that being the amount paid by the plaintiff to Southern Express Company, under a bond in which the plaintiff was surety, for the faithful performance of duty on the part of John H. Charles, Jr., a messenger employed by Southern Express Company. Before the said bond was executed, the plaintiff secured an obligation from John H. Charles, Sr., in the nature of a guaranty, dated May 22, 1906. The plaintiff brings this action against the defendant, John H. Charles, Sr., for the said sum, upon the obligation of said guaranty. The case was tried before Judge Ernest Gary and a jury at Greenville, November term, 1910. At the close of the testimony, the plaintiff's attorneys made a motion that the court direct a verdict in its favor, for the full amount claimed, upon the ground that the receipt of the plaintiff, for the money paid by it to Southern Express Company, on account of the alleged defaults of the messenger, John H. Charles, Jr., was conclusive of the fact and amount of such defaults, and could not be impeached by the defendant, except for fraud, and that there was no evidence of fraud. Whereupon the presiding judge directed the jury to find a verdict, in favor of the plaintiff, in the sum of $481.40; that being the amount claimed with interest. Upon which verdict judgment has been duly entered, and from which the defendant appeals."

A copy of the bond which is set out in the complaint (omitting the formal parts thereof) is as follows: "May 25, 1906. Know all men by these presents, that I, J. H. Charles, of Greenville, S. C., in consideration of the issue of a bond of guarantee, by the Guaranty Company of North America for Southern Express Company, on behalf of my son, John H Charles, Jr., not yet of age, hereby agree that I will protect and immediately indemnify said Guaranty Company of North America, against any and all loss, damage or expense it may sustain or become liable for, in consequence of such bond or renewal or extension thereof, hereby admitting that the vouchers or other proper evidence, showing payment by the said Guaranty Company of any such loss, damage or expense, shall be conclusive evidence (except for fraud), against me and my estate, of the fact and amount of my...