Olds v. City Trust, Safe-deposit & Surety Co.
| Decision Date | 18 May 1904 |
| Parties | OLDS et al. v. CITY TRUST, SAFE-DEPOSIT & SURETY CO. |
| Court | United States State Supreme Judicial Court of Massachusetts Supreme Court |
Wm G. Bassett and Edw. L. Shaw, for appellant.
John B O'Donnell and E. Henry Hyde, for appellees.
The plaintiffs, Olds and Whipple, on November 11, 1896, brought an action of contract in the superior court in Hampshire county against the Mapes Reeve Construction Company by a writ the ad damnum of which was $10,000, and in which one De Witt Smith, alleged therein to be commorant of Northampton, was named as trustee of the defendant, with goods, effects, and credits of the defendant in his hands to that amount. The alleged trustee answered that he was not a citizen or resident of Massachusetts, that he had no place of business therein, and that he had no goods effects, or credits of the defendants in his hands, except that the construction company had brought an action against him seeking to establish a certain disputed claim, and to establish a lien therefor upon certain real estate belonging to him in Northampton, submitting himself to examination, and asking to be discharged, and for his costs. The construction company, on January 11, 1897, entered a general appearance and filed an answer denying each and every material allegation in the writ and declaration. This being the situation of the case in court at the October sitting in 1898, the construction company filed a motion, alleging that there was an attachment of its property on mesne process in the suit, by the summoning therein of the alleged trustee, to the amount of $10,000, and that the same was excessive, and asking for a reduction of the attachment. At the same sitting, by consent and by order of the court, the attachment was reduced to $4,500. Thereupon, on or about November 16, 1898, the construction company, as principal, and the City Trust, Safe-Deposit & Surety Company of Philadelphia, the defendant in the present suit, as surety, gave to the plaintiffs a joint and several bond for the sum of $4,500, reciting the attachment, and stating that the construction company desired to dissolve it according to law. The present action is brought to recover from the surety upon this bond. One condition of the bond, among others not now material, is that, if the construction company shall, within 30 days after the final judgment in the action in which the attachment was made, pay to the plaintiffs the amount, if any, which they shall recover in the action, the obligation of the bond shall be void. Thereafter the action was referred to an auditor, and such other proceedings were had therein that on December 3, 1900, judgment for the plaintiff was entered therein, by consent, for $4,354.13 damages, and $94.33 costs, and on this judgment execution issued on December 5, 1900. The construction company refusing to pay the judgment, demand was made on the surety company to pay it or to satisfy the execution, and on March 1, 1901, this suit was brought against it on the bond of November 16, 1898. The action was heard upon an agreed statement of facts by the superior court, sitting without a jury, in June, 1903, and after a finding for the plaintiffs in the sum of $5,157 damages, filed on August 10, 1893, the defendant appealed to this court, a judgment for the plaintiffs upon the finding having been entered in the superior court as of August 10, 1893.
1. The first contention of the defendant is that the bond was neither a good statutory bond nor a good common-law bond, and that therefore it is invalid. In support of this contention it is urged that there was no attachment, because the alleged trustee answered in such a way as to discharge himself. But his answer was not an absolute denial of funds. It in substance admitted that the construction company contended that he owed it a debt for which it was prosecuting a suit against him in which the company sought to establish a lien for its debt upon his land in Northampton. One of the agreed facts is that when the service was made on the alleged trustee he was indebted to the construction company in a sum greater than the amount of the judgment which the plaintiffs recovered against that company, and that he paid the company his debt after the bond now in suit was filed. When the bond was offered it was still open to the plaintiff to file interrogatories to the alleged trustee upon all matters stated in his answer, and if he had answered truly it would have appeared that when summoned as trustee he was largely indebted to the construction company. It cannot now be assumed that, if compelled to answer interrogatories as an alleged trustee, he would not have made statements upon which he would have been charged, and the debt due from him to the construction company held and applied under the process to the extinguishment of the plaintiffs' demand. In consequence of the filing of the bond the alleged trustee was subjected to no further proceedings in the suit, and the plaintiff was left to rely wholly on the bond. The short answer to the contention that the bond is invalid is that, it having been given under such circumstances, it is not open to the defendant, when sued upon it, to contend that there was no attachment. It was intended to induce the plaintiffs to abandon their attempt to appropriate to the payment of their demand then in suit a debt owing by the alleged trustee to the construction company, and it did have that result, to the legal detriment of the plaintiff. All the elements of an estoppel are present. See Stiff v. Ashton, 155 Mass. 139, 29 N.E. 203.
2. The defendant contends that its position as one of the obligors of the bond was merely that of a guarantor of the solvency of the construction company and of one Reeve, who, when the bond was given, was indorser on promissory notes given by that company to the plaintiff as collateral to the demand on which the suit was being prosecuted. But the contract entered into by the defendant was an explicit undertaking to pay the plaintiff $4,500, unless the construction company should pay a judgment within 30 days after it might be rendered. It would be adsurd to hold that the surety on a bond given to dissolve an attachment could require the obligee to exhaust any collateral security which he might hold before taking judgment in the suit in which the bond was given. If, as we do not intimate, such an obligor has any concern with the action of his obligee as to collateral, or as to other remedies which may be open to the obligee as against the defendant whose property is to be freed from the attachment it can be no more than a right to subrogation on payment of his bond, and in no event can it be more than an equitable defense to a suit upon his bond. The agreed facts show that the notes held as collateral were in...
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