National Surety Corporation v. Edwards House Co.
| Decision Date | 27 October 1941 |
| Docket Number | 34714. |
| Citation | 4 So.2d 340,191 Miss. 884 |
| Court | Mississippi Supreme Court |
| Parties | NATIONAL SURETY CORPORATION v. EDWARDS HOUSE CO. et al. |
Butler & Snow, of Jackson, for appellant.
Green & Green, of Jackson, for appellees.
As surety on the bond of a local agent of the Farm Credit Administration, whose duty it was to receive applications for emergency crop loans and to take notes and deeds of trust to secure the same, the appellant, National Surety Corporation reimbursed the United States government for a sum of money which had been fraudulently obtained by him when he forged the name, "Amos Easterling," to such an application, note and deed of trust, and by means thereof received, for delivery to the supposed applicant, from the regional office of the Farm Credit Administration at Memphis Tennessee, a check drawn by the manager of that office on the United States Treasury, payable to Amos Easterling, which the said agent endorsed in that name on the back thereof followed by his own signature, and obtained the amount of the check in cash from the office of the appellee, Edwards House Company, at Jackson, Mississippi, where he was known to be such agent of the government, and which check was cashed by the hotel company without benefit to itself, and without knowledge of any facts which would lead it to believe that the endorsement of the payee thereon was otherwise than genuine; and which check, after having been endorsed by the said Edwards House Company, was deposited to its credit at the Jackson-State National Bank, one of the appellees herein which likewise endorsed the same, and thereafter collected the proceeds thereof through its correspondent banks from the United States Treasury.
This suit is brought by the said Surety Corporation, seeking to be subrogated to the alleged right of the United States to recover against the appellees as endorsers, upon the theory that they guaranteed the genuineness of the signature of Amos Easterling on the back of the check in question, whereas, it developed several months later that no one by that name had either applied for the loan or signed a note or deed of trust, or endorsed the check or received the proceeds thereof.
Whether Amos Easterling was a real or a fictitious person is not affirmatively shown by the agreed statement of facts. But assuming for the purpose of this decision that such a person existed, and that the regional office at Memphis, in issuing and mailing the check to the local agent, intended that the same should be delivered to Amos Easterling; and also assuming, but not deciding the question, that the United States would have been entitled, under the foregoing statement of facts, to recover the money received from it by the Jackson-State National Bank as proceeds of the check in question under the authority of the case of United States v. National Exchange Bank, 214 U.S. 302, 29 S.Ct. 665, 53 L.Ed. 1006, 16 Ann.Cas. 1184, we are of the opinion that the appellant, National Surety Corporation, is not entitled, under the equitable doctrine of subrogation, to recover the amount paid by it to the United States in discharge of the obligation as surety on the bond of the government agent committing the fraud, by which bond it guaranteed the faithful performance of his duties as an employee of the government; that this doctrine can never be...
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