Lawrence v. Am. Sur. Co. of N.Y.

• Decision Date: 02 October 1933
• Docket Number: No. 117.,117.
• Citation: 250 N.W. 295,264 Mich. 516
• Parties: LAWRENCE, State Treasurer, v. AMERICAN SURETY CO. OF NEW YORK et al.
• Court: Michigan Supreme Court

264 Mich. 516

250 N.W. 295

LAWRENCE, State Treasurer,

v.AMERICAN SURETY CO. OF NEW YORK et al.

No. 117.

Supreme Court of Michigan.

Oct. 2, 1933.

Appeal from Circuit Court, Ingham County; Charles B. Collingwood, Judge.

On motion for rehearing.

Rehearing denied.

For former opinion, see 249 N. W. 3.

Argued before the Entire Bench.Patrick H. O'Brien, Atty. Gen., and Charles F. Cummins, Asst. Atty. Gen., for plaintiff.

Coulter & Hampton, of Detroit, for defendant Maryland Casualty Co.

Monaghan, Crowley, Reilley & Kellogg, of Detroit, for defendant Massachusetts Bonding & Insurance Co.

Sherman T. Handy, of Lansing, for defendant Detroit Fidelity & Surety Co.

Bishop & Weaver, of Detroit, for defendant Indemnity Insurance Co. of North America.

Stevens T. Mason, of Detroit, for defendant Century Indemnity Co.

FEAD, Justice.

The Massachusetts Bonding & Insurance Company moves for a rehearing because the opinion overlooked the fact that the highway bond was not delivered until after defendant had received the state treasurer's letter of September 14th. The time of delivery appeared only casually in the testimony, was not definitely stated, and was not stressed in the pleadings, briefs, or argument.

Re-examination of the testimony demonstrates that defendant did not sustain the burden of proof of estoppel. By the representation that the funds covered by the bond had been withdrawn, the state treasurer meant that sufficient funds had been checked out to permit reduction of the security. There was no testimony that defendant did not know the condition of the deposit nor that it understood the treasurer's statement otherwise than as he intended, nor that it wrote the highway bond in reliance on an understanding that the whole deposit had been withdrawn. The testimony is that it relied ‘upon the fact that the bond had been canceled.’ Defendant had had legal advice on the authority of the state treasurer to cancel, and it is evident it relied on such authority.

To estop the state, the acts or conduct of an officer must be within the scope of his authority. 10 R. C. L. 704; 21 C. J. 1191. Had the three approving officers known of the arrangement between defendant and the bank and had they acquiesced in or failed to object to the attempted cancellation, a different question would be presented. It is true the treasurer had full power over the deposit but, unlike the authority of a bank cashier over bills and notes, as declared in Cochecho National Bank v....