J. D. O'Malley & Co. v. Lewis

• Decision Date: 15 January 1934
• Docket Number: 24639.
• Citation: 176 Wash. 194,28 P.2d 283
• Court: Washington Supreme Court
• Parties: J. D. O'MALLEY & CO. v. LEWIS et al.

28 P.2d 283

176 Wash. 194

J. D. O'MALLEY & CO. v. LEWIS et al.

No. 24639.

Supreme Court of Washington

January 15, 1934

Department 2.

Appeal from Superior Court, King County; H. G. Sutton, Judge.

Action by J. D. O'Malley & Co., a corporation, against Martin Lewis and John F. Dore and wife. Judgment for plaintiff, and defendants Dore appeal.

Reversed and remanded.

T. M Royce, of Seattle, for appellants.

Frank R. Jeffrey, John C. Bowen, and Stewart N. Lombard, all of Seattle, for respondent.

HOLCOMB Justice.

This action was brought for the right to be subrogated for the payment of a forfeited bail bond and the recovery of $3,000 and attorney's fees.

The case was tried to the court and a judgment rendered for the full amount and $300 attorney's fees. The bail bond was issued by the New Amsterdam Casualty Company, as surety, with Martin Lewis, as principal. Respondent is a Washington corporation conducting an agency for bond insurance companies. It is not authorized to write bonds in its own name, and acted as agent for the casualty company, which is authorized to do a general bonding business in this state. The agency of respondent was secured under a written agreement between it and the casualty company and a certain collateral agreement, under which respondent agrees to pay all premiums on bonds written and to hold collateral taken by respondent in connection with any bond written as security for the benefit of the casualty company, and, in the event of any bond forfeited, respondent is required to pay the amount of the forfeited bond direct to the obligors of the bond.

Prior to October 13, 1927, Martin Lewis, who was named as a party to this action, but never served because of his absence from the state as a fugitive from justice, had been charged with arson, convicted and granted two new trials, in both of which the jury disagreed. Pending the third trial Lawis disappeared, but was later apprehended and his bail exonerated. During the two trials in the superior court appellant John F. Dore was his attorney, and on October 13 1927, at which time Lewis was incarcerated in the King county jail, it is alleged, and there is some evidence to prove, that Dore applied to respondent for a bail bond. The company would not write the bond without indemnity. There is evidence tending to show that Dore agreed that, if respondent would write the bond, he would indemnify respondent for any loss it might incur in obligating itself. On this condition, respondent, as agent for the casualty company, wrote the bail bond in the latter's name, and at the same time an indemnity agreement was signed by Lewis and also, apparently, by Dore running to the casualty company. There is a conflict in the evidence as to whether he personally conferred with the agent of respondent, or through an office assistant of his own. There is also a conflict in the evidence as to whether Dore paid to respondent the premium and service fees on the bond. There was oral testimony on behalf of respondent that it was paid by his personal check through respondent, which Dore disputed.

Lewis again absconded, failed to appear for trial, and the bail bond given by the casualty company was forfeited. Upon judgment being entered on the forfeiture, demand was made upon Dore to pay the judgment which he would not do. Execution was then issued against the casualty company on the judgment, and it, in turn, called upon respondent to make payment. Respondent paid the judgment direct to the state of Washington, the obligee, and brought this suit against Martin Lewis and Dore individually and the community composed of John F. Dore and Marian Dore, his wife. Appellant John F. Dore served and filed an answer in which he admitted the allegation of the complaint that he had executed and delivered to the New Amsterdam Casualty Company the indemnity agreement referred to, and alleged as an affirmative firmative defense that it was contrary to public policy and void; and, further, that neither he nor the community composed of himself and wife received any consideration for the execution and delivery of the indemnity agreement. Appellant Marian Dore served and filed an answer purporting to be on behalf of herself and for the marital community of herself and husband, in which she made a general denial of the allegations of the complaint on information and belief, and denied any information or knowledge concerning the allegations of the complaint. She alleged as an affirmative defense that the indemnity agreement was contrary to public policy and void, and that no consideration had been received for its execution.

The indemnity agreement was received in evidence and is Before us. After respondent had rested its case, appellant Dore, called as a witness in his own behalf, attempted to testify that he had not signed the indemnity agreement, and that the purported signature thereto was not his.

The contractual portions of the indemnity agreement are these:

'Fifth, that in the event of payment, settlement or compromise of liability, loss, costs, damages, attorneys' fees, expenses, claims, demands, suits and judgments as aforesaid, in connection with said bond or any continuation or renewal thereof, an itemized statement thereof, sworn to by the surety or the treasurer of said surety, or the voucher or vouchers or other evidence of such payment, settlement of compromise, shall be prima facie evidence of the fact and extent of the liability of the indemnitors in any and all claims or suits hereunder; * * *

'Seventh, to waive and do hereby waive all right to claim any of their property, including homesteads, as exempt from levy, execution, sale or other legal process, under the laws of any state or states;

'Eighth, that in case any of the Indemnitors shall fail to execute this instrument, or in case any of the Indemnitors who execute this instrument shall not be bound for any reason the other Indemnitors shall nevertheless be bound hereunder for the full amount of liability, loss, costs, damages, attorneys' fees and expenses as aforesaid; * * *

'Tenth, that this obligation shall be for the benefit of any person, company or companies that may join with the surety as co-surety or co-sureties upon such bond, continuation or renewal thereof, or that may issue reinsurance in favor of the said surety; or which, at the request of the said surety, shall execute such bond, continuations or renewals thereof;'

The trial court rejected the evidence of Dore that the indemnity agreement did not bear his signature because of the state of the pleadings, in that the evidence was not within the issues. A qualified expert on handwriting was also introduced as a witness, and an offer was made to prove by the expert that he had examined the signature and compared it with many other authentic signatures of Dore, and that the signature to the indemnity agreement bears plain evidence of being forged. This evidence was also rejected as not being within the issues.

Although Dore had verified an answer in which he had admitted that the indemnity agreement had been signed by him, the answer having been drawn by his cocounsel during the absence of Dore in the East and his application to amend his answer and offer proof that the signature was not his, it would seem that the amendment should have been allowed and the evidence received and considered by the trial court.

Pleadings have always been liberally construed and amendments liberally allowed under our Code by this court even Before the taking effect of the new rules of court on January 24, 1927. The general rule in this state that amendments...