Palatine Ins. Co. of Manchester, England, Ltd. v. Den

• Decision Date: 29 June 1896
• Citation: 18 Mont. 413
• Parties: PALATINE INS. CO. OF MANCHESTER, ENGLAND, Limited, v. CRITTEN DEN et al.
• Court: Montana Supreme Court

18 Mont. 413

PALATINE INS. CO. OF MANCHESTER, ENGLAND, Limited,

v.CRITTEN DEN et al.

Supreme Court of Montana.

June 29, 1896.

Appeal from district court, Silver Bow county; J. J. McHatton, Judge.

Action by the Palatine Insurance Company, of Manchester, England, Limited, against William J. Crittenden and others, on a bond. Defendant Crittenden defaulted, and from a judgment for plaintiff, and from an order denying a new trial, defendant H. R. Bartlett, a surety on said bond, appeals. Affirmed.

On June 4, 1892, the plaintiff, a foreign insurance company, appointed the defendant William J. Crittenden its agent. This agency continued until August 30, 1893, upon which date Crittenden rendered an account to the plaintiff, showing that he had received $878.20 as agent, which he had not paid over to the plaintiff. Crittenden had given a bond, with the defendants H. R. Bartlett and Joseph Chauvin as sureties. One of the conditions of the bond was that he should account and pay over to the company all such moneys of the company as he might, from time to time, receive. The plaintiff commenced this action against Crittenden as principal and Bartlett and Chauvin as sureties for the recovery of the amount of money due as aforesaid.Crittenden defaulted, and judgment was entered against him for $936.70. The action was tried as against the sureties, and judgment rendered for $475.23 against them. After a motion for a new trial was denied, the defendant Bartlett appealed from this order and from the judgment.

The separate answer of the defendant Bartlett, surety, set up that prior to June 4, 1892, at which date Crittenden was appointed agent for the plaintiff, a firm consisting of Crittenden and one Tucker, under the firm name of Crittenden & Tucker, had been the agents for the plaintiff, and that when Crittenden was appointed agent, on June 4th, Crittenden & Tucker were indebted to the plaintiff in a sum exceeding $500, and that the defendant Bartlett, when he executed the bond, was not notified of the fact that Crittenden & Tucker were so indebted to the plaintiff. Upon the trial of the case, the surety Bartlett, desiring to prove that the former indebtedness of Crittenden & Tucker to plaintiff was a fraudulent one, obtained leave to amend his complaint, and inserted the following allegation: “That the said indebtedness from Crittenden & Tucker to plaintiff was fraudulent, and the said Crittenden & Tucker were in default, and were defaulters to plaintiff in said sum, which was long past due; and the said Crittenden & Tucker fraudulently withheld same from plaintiff, of which facts this defendant was not notified, though the plaintiff had an opportunity so to do; that said Crittenden & Tucker had given the plaintiff no bond whatever.” The trial then proceeded, and evidence was introduced showing the fact of the indebtedness of Crittenden & Tucker to the plaintiff. At the close of the testimony, the court, of its own motion, struck out all said testimony, and withdrew the same from the jury. The reason given by the court was that this evidence did not sustain the allegation of Bartlett's answer, or the amendment which he made upon the trial in reference to this indebtedness being fraudulent. The court held that the indebtedness of Crittenden & Tucker was simply a debt to the insurance company which was indulged by the company, and that the mere fact of the indebtedness of Crittenden & Tucker to the company, and the noncommunication of that fact by the company to the sureties at the time of the execution of the bond, would not be a defense to an action on the bond. The court then proceeded to give instructions based upon this construction of the law. It is the action of the court in this respect that is now assigned as error by the appealing defendant. Bartlett.

Forbis & Forbis, for appellant.

S. De Wolfe, for respondent.

DE WITT, J. (after stating the facts).

The statement preceding this opinion gives the point so fully that there seems to be but little to say beyond citing a few of the leading authorities. We are of opinion that the ruling of the lower court upon the law was correct. We find it stated in 2 Brandt, Sur. § 422, that: “If the party who takes a bond for the conduct of the principal in an employment knows at the time that the principal is then a defaulter in said employment, and conceals the fact from the surety, such concealment is a fraud upon the surety, and discharges him.” The author cites numerous cases upon this point. There are some cases to the contrary, but we are of opinion from a review of the decisions that the text of Brandt quoted states the law correctly. Appellant relies upon this statement of the law, and contends that the evidence which the court...