National Surety Company v. Becklund
| Decision Date | 19 November 1926 |
| Docket Number | 25,553 |
| Citation | 210 N.W. 882,169 Minn. 177 |
| Parties | NATIONAL SURETY COMPANY v. L. R. BECKLUND AND OTHERS |
| Court | Minnesota Supreme Court |
Defendants appealed from a judgment of the district court for Pine county, Stolberg, J. Affirmed.
Surety is entitled to contribution from cosureties after paying more than his proportion of liability.
1. A surety who has paid more than his proportion of the liability is entitled to contribution from cosureties was are bound for the performance by the same principal of the same obligation although on different instruments.
Misrepresentations of principal not imputable to obligee.
2. Misrepresentations made by the principal in a bond to induce the sureties to execute it, not imputable to the obligee, are not available as a defense against liability on the bond.
Principal and Surety, 32 Cyc. p. 64 n. 19; p. 277 n. 60; p. 279 n. 75.
See 21 R.C.L. 1134; 4 R.C.L. Supp. 1442; 5 R.C.L. Supp. 1183; 6 R.C.L. Supp. 1302.
S.G.L Roberts, for appellants.
James M. Moore, for respondent.
On April 1, 1921, the Farmers State Bank of Rock Creek as principal and the plaintiff as surety executed a bond to the county of Pine in the sum of $10,000 to secure the county for county funds theretofore or thereafter deposited in the bank. At the end of May when taxes on real estate were being paid, the county treasurer asked or suggested that the bank give an additional bond so that a larger amount could be deposited therein during this period than would be permissible under the existing bond. On June 13, 1921, the bank as principal and the defendants as sureties executed a bond to the county in the sum of $5,000 which contained the same provisions and conditions as the bond executed by plaintiff. On February 7, 1923, the bank was closed by the state banking department and then had on deposit the sum of $3,000 of the county funds. Thereafter the county demanded payment of the deposit from plaintiff in accordance with the terms of its bond, and on March 27, 1923, plaintiff paid the full amount thereof. Plaintiff then brought this action to compel the defendants as cosureties to contribute their proportion of the loss, being one-third thereof. The court made full findings and rendered judgment for plaintiff. Defendants appealed.
As there is no controversy concerning the amount for which the defendants are liable, if liable at all, we have no occasion to consider that question. The defendants based their defense upon the claim that they executed the bond on the representation and in the belief that it covered only deposits made in excess of the amount covered by plaintiff's bond. Both bonds are on blanks furnished by the county auditor and are identical in form. By their terms they cover all deposits of county funds received by the bank. They bring the sureties thereon within the well established rule which gives a right of contribution from his cosureties to a surety who has paid more than his proportion of the common liability. Young v. Shunk, 30 Minn. 503, 16 N.W....
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