Saint v. Wheeler & Wilson Mfg. Co.

• Decision Date: 26 January 1892
• Court: Alabama Supreme Court
• Parties: SAINT ET AL. v. WHEELER & WILSON MANUF'G CO.

10 So. 539

96 Ala. 362

SAINT ET AL. v. WHEELER & WILSON MANUF'G CO.

Supreme Court of Alabama

January 26, 1892

Appeal from circuit court, Colbert county; H. C. SPEAKE, Judge.

Action by the Wheeler & Wilson Manufacturing Company against R. F Saint, as principal, and C. M. Wright, A. J. Crosthwait, and J. R. Spragins, sureties, upon a bond for the performance of a contract of employment by defendant Saint with plaintiff. Verdict and judgment for plaintiff. Defendants appeal. Reversed.

The contract between these parties, of which the other defendants guarantied the faithful performance, is divided into seven sections, which are as follows: "Section 1. The party of the first part [Wheeler & Wilson Manufacturing Company] agree to employ the party of the second part as a collector. Sec 2. The party of the second part is to engage in no other business, but to devote his time exclusively to collecting claims given him from time to time by the party of the first part. Sec. 3. The party of the second part agrees to remit to the party of the first part, on Saturday of each week, the full amount of all collections made by him. Sec. 4. All notes, leases, and cash received by the party of the second part on account of the party of the first part shall be held and rendered strictly as the property of the said party of the first part, subject to their order and under their control. Sec. 5. In any matters where the duties of the party of the second part are not herein clearly defined, he shall obey any and all directions or instructions in relation thereto to which shall from time to time be given him by the party of the first part. Sec. 6. The party of the second part is to receive as full compensation for his services under this agreement a salary of $50.00 per month, and necessary traveling expenses; said salary and expenses to commence when the party of the second part reaches his territory and work commences,-said party of the second part to furnish his own horse, and to go wherever ordered. All loss of time to be deducted. Sec. 7. This agreement may be terminated at the option of either party, in which case the party of the second part agrees to deliver to the party of the first part, at their office in Nashville, all of their property remaining in his possession or under his control, unless otherwise ordered by them in writing." The bond on which this suit was instituted was written on the back of this contract. All the defendants filed the plea of general issue, in short, by consent, on the 11th day of March, 1889. The other sureties on the bond filed separate pleas, 22 in number, including those to which demurrers were sustained. A. J. Crosthwait separately pleaded that, before Saint had entered on the discharge of his duties as collector, he notified plaintiff to take his name off of the bond,-that he would not become a surety on the bond; that the plaintiff made no objection, and he was thereby released from any obligation on the bond. The other sureties on the bond filed a separate plea, that they signed the bond with the understanding that Crosthwait was also jointly liable with them on the bond, and that a release of Crosthwait from the bond, without their consent, released them. The sureties filed a number of other pleas, on which they based a valid defense to this suit: (1) They pleaded that the contract under which Saint worked for the plaintiff was changed after the bond was executed by them, without their knowledge or consent; (2) that plaintiff and Saint so changed the original contract, after the bond was executed as to constitute Saint a salesman, and required him to sell sewing-machines; (3) that plaintiff required Saint to sell and discount the notes which were put in his hands for collection under the contract; (4) that different duties were imposed on Saint by plaintiff than was stipulated for in the contract, and which increased defendant's risk; (5) that plaintiff knowingly suffered Saint to retain in his possession money which it knew he had collected; (6) that plaintiff and Saint changed that clause of the contract requiring him to remit to the plaintiff at the end of each week the full amount of all collections, and permitted Saint to retain from his weekly collections his salary and traveling expenses; (7) that plaintiff, knowing Saint had defaulted for a large amount of its money, gave him other notes and accounts for collection, and suffered him to collect other money, without notifying the sureties; (8) that the contract was changed, and Saint required to work at $9 per week instead of $50 per month; (9) that, after the plaintiff discovered that Saint had used money collected under the contract that ought to have been paid at the time it agreed to extend the time of payment; (10) that the plaintiff was a foreign corporation, and had not complied with the laws of this state by filing its declarations with the secretary of state. The plaintiff filed demurrers to some of the pleas; but it is not deemed necessary to set out the grounds of the several demurrers, nor to specify the pleas to which they were interposed, since the pleas on which issue was joined, as stated above, sufficiently present the questions discussed in the opinion.

The evidence introduced on the trial of the case established the following facts: That the above contract was executed by the plaintiff and R. F. Saint; and the bond was executed by the defendants, Wright, Crosthwait, Hall, and Spragins, as sureties on the bond. That Saint received from the plaintiff a large list of notes and accounts for collection. That he collected a considerable amount of money for it, paid over a portion of it, and retained or embezzled the balance of it. After the bond was executed, Saint carried it or sent it to Nashville, to the plaintiff. That when he (Saint) went to Nashville to begin work under the contract, and before he had reached that place or had received any notes or accounts from the plaintiff, Crosthwait notified plaintiff to take his name off the bond, which was a revocation of his guaranty, and plaintiff not having refused, he regarded himself released. Plaintiff did not decline to release him, but simply asked his reasons; and after that plaintiff gave Saint the notes and accounts to collect. That when Saint went to Nashville to take charge of the work assigned to him under the contract, the original contract was changed, and Saint was permitted to retain from his weekly collections all his expenses and a salary of $50 per month, instead of remitting to plaintiff the full amount of all collections. That in February, 1888, the plaintiff, through W. W. Walls, made another change in the contract, whereby Saint was to get only $9 per week instead of $50 per month for his services as collector, and that Saint worked under this last contract until he quit, but, on a settlement he made with the company through Walls, he was allowed $50 per month. That Saint was required to sell and discount notes and accounts which had been put in his hands for collection under the contract. That he was required to take up the sewing-machines, and sell them again for such prices as he could get for them, and that he did take up some machines for the plaintiff, but did not know how many, and sold some of them under instructions from the plaintiff. That Wright, Hall, and Spragins knew nothing about Crosthwait revoking his guaranty on the bond. That they signed it with the understanding and agreement that Crosthwait was jointly liable with them. It was also proved that in February, 1888, the plaintiff, through its agent, had notice of Saint's defalcation, and that after such notice said company continued Saint in its employment. The defendants knew nothing about the changes made in the contract between Saint and the plaintiff after the bond was signed. They never consented to any of the charges. The plaintiff never notified either of them of Saint's dishonest act in appropriating the plaintiff's money. Defendants then offered to prove by each of the defendants that they had not consented to a change, in the contract, and had no knowledge of such change. To this ruling of the court, defendants reserved an exception. Defendants then offered to prove that neither the plaintiff nor Saint had obtained license to sell sewing-machines. The court, on objection made by the plaintiff, refused to permit the defendants to introduce that evidence. Defendants introduced as evidence a number of letters written by plaintiff to the defendant R. F. Saint, in which they authorize him to discount notes and to use his discretion. All the letters show that Saint was required to do other work than that required under the written contract, all of which increased the risk which the sureties had incurred.

In addition to the other charges requested by the defendant in writing were the following: (5) "If the jury believe from the evidence that in February, 1888, Saint had only used fifty or sixty dollars of the plaintiff's money, and that Saint notified the plaintiff that he was short that amount then it was the duty of the plaintiff to notify the sureties, Wright, Crosthwait, Hall, and Spragins, and, if the plaintiff failed to notify them of such fact, they cannot recover against these sureties for any defalcation of Saint after that time." (7) "If the jury believe from the evidence that A. J. Crosthwait was released from the bond as guaranty after the other sureties, Wright, Crosthwait, Hall, and Spragins, had signed it, then I charge you that such release was a material change in the contract. And if you further believe from the evidence that such change was made without the knowledge and consent of Wright, Hall, and Spragin, and Crosthwait, then the plaintiff cannot recover against them." (9) "If...