Pacific Nat. Bank of Tacoma v. Aetna Indem. Co.
| Decision Date | 11 December 1903 |
| Citation | 33 Wash. 428,74 P. 590 |
| Court | Washington Supreme Court |
| Parties | PACIFIC NAT. BANK OF TACOMA v. AETNA INDEMNITY CO. |
Appeal from Superior Court, Pierce County; W. H. Snell, Judge.
Action by the Pacific National Bank of Tacoma against the AEtna Indemnity Company, impleaded with Claude M. Seeley & Co. agents, trustees for John B. Hardy and the Hardy Ship Building Company. From a judgment for plaintiff, defendant appeals. Affirmed.
Campbell & Powell, for appellant.
E. M. Hayden and John A. Shackleford, for respondent.
This is a suit upon a guaranty bond. The instrument sued upon purports to have been executed by Seeley & Co., as agents for John B. Hardy and the Hardy Ship Building Company, as principals, and by the appellant, the AEtna Indemnity Company, a corporation existing under the laws of the state of Connecticut, as surety. The bond runs to the Pacific National Bank, respondent herein, and is in the sum of $7,500. It contains the following recitals as to its purpose and conditions: The complaint alleges the advancement of money by the bank in accordance with the terms of the agreement mentioned in the bond to the extent of $7,500, and also that default was made in its payment. As a defense the answer alleges that at the time of the execution and delivery of the purported bond Claude M. Seeley, under the name of Seeley & Co., was employed by appellant, under a stated compensation, as its district agent to solicit indemnity and guaranty risks, and in his discretion and judgment to deliver all bonds made by appellant in the district embracing the city of Tacoma; that all bonds delivered by appellant in said district while said Seeley & Co. was in the employ of appellant contained the following express condition: 'This bond shall not be valid, however, until signed by Seeley & Co., district agents at Tacoma, Washington.' It is further alleged that it was the duty of said Claude M. Seeley, under the name of Seeley & Co., as such agent, if in his judgment any risk offered was a proper one, to countersign the bonds of appellant covering such risks, in order to complete the execution thereof by appellant; that the respondent bank had notice of the fact of such agency and of the extent of its powers and duties; that at the time of the execution of the purported bond said Seeley was acting as agent and trustee for the John B. Hardy and the Hardy Ship Building Company, mentioned therein, and as such agent was clothed with large powers and broad discretion; that in purporting to accept said risk and to execute said bond he attempted to act as agent both for appellant and for said John B. Hardy and the Hardy Ship Building Company, without the knowledge or consent of appellant; that upon learning that said purported bond had been so executed appellant immediately disaffirmed the said acts of said Seeley; and that said purported bond is void as against public policy. It is further alleged that the bond is without any consideration moving to appellant. At the trial, after the plaintiff rested, the defendant also rested without offering any testimony. Thereupon the plaintiff challenged the legal sufficiency of any evidence in the case to constitute a defense, and moved the court to decide as a matter of law that the plaintiff is entitled to a verdict and judgment as prayed in the complaint, and, further, that the case be taken from the jury, and judgment directed in favor of plaintiff. The motion was granted, the jury discharged, and judgment accordingly entered. The defendant surety company has appealed from the judgment.
It is assigned that the court erred in admitting in evidence, over objection, the letter of attorney from appellant to one Clemens, as evidence of his authority to execute the bond in question. The bond was signed by said Clemens as the attorney in fact of appellant, and it was sought by the offered evidence to show his authority for so signing. It is contended that the operative words of the letter of attorney are insufficient to authorize the execution of a bond of the nature of the one in question, which it is insisted is a contract of credit insurance. The following words appear in the letter of attorney: 'That he be and he is hereby authorized and empowered to execute and deliver and attach the seal of the company to any and all bonds and undertakings for or on behalf of the company in the business of guaranteeing the fidelity of persons holding places of public or private trust and the performance of contracts other than insurance policies.' The learned trial court adopted the view that the words, 'and the performance of contracts other than insurance policies,' are broad enough to authorize the execution of bonds guarantying the performance of all kinds of contracts except insurance policies. In that view we concur. Our statute (Sess. Laws 1897, pp. 332, 333, c. 114) recognizes that indemnity obligations to guaranty the performance of contracts may be authorized by guaranty companies. We think it was not error to admit the letter of attorney.
A similar error is assigned upon the admission in evidence of a certified copy of the charter of appellant company. The offered evidence recites the same powers which were contained in the aforesaid letter of attorney, and for the reasons stated in reference to the admission of the latter it was not error to admit the evidence in question. Both broadly authorize the guarantying of contracts. The contract guarantied here was the agreement to repay certain advancements to be made by respondent bank.
It is next urged that the court erred in admitting in evidence the bond in suit. The instrument contained the words hereinbefore quoted, viz., 'This bond shall not be valid, however until signed by Seeley & Co., district agent at Tacoma, Washington.' It will be remembered that the above words were set out in appellant's answer, and alleged to have been required by appellant in all bonds executed and delivered in its behalf in the district, including the city of Tacoma. It is not disputed that Mr. Seeley, under the style of Seeley & Co., was the trustee and agent of the principals in the bond, and it was executed by him for the principals as such agent and trustee. The instrument was also countersigned as follows: Upon the face of the instrument it would therefore appear that Mr. Seeley acted as agent for both the principals and the surety in the execution of the bond. If such were the fact, and if appellant had not consented thereto, we apprehend that the objection to the introduction of the bond as evidence should have been sustained for reasons of public policy, since such reasons prevent one from acting as agent for both parties to a transaction without their consent. The evidence, however, showed that at the time the bond in question was executed the firm of Clemens & O'Bryan of Portland, Or.,...
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