Screwmen's Ben. Ass'n v. Smith

• Decision Date: 06 March 1888
• Citation: 7 S.W. 793
• Parties: SCREWMEN'S BEN. ASS'N OF GALVESTON v. SMITH <I>et al.</I>
• Court: Texas Supreme Court

7 S.W. 793

SCREWMEN'S BEN. ASS'N OF GALVESTON v. SMITH et al.

Supreme Court of Texas.

March 6, 1888.

Appeal from district court, Galveston county; W. H. STEWART, Judge.

George P. Finlay and Forster Rose, for appellant. James B. Stubbs and Robert G. Street, for appellees.

STAYTON, C. J.

E. A. Smith was the treasurer of the appellant association for one term, intervening December 28, 1883, and January, 1885, and he executed a bond, with sureties, conditioned for the faithful performance of his duties during that term. He was elected for a second term, and executed a bond with sureties; there being only one person who was surety on both bonds. He was removed from office July 24, 1885, and two suits were brought against him and his sureties to recover moneys which came into his hands, and were never paid over. This action is on the bond executed for the last term, and the petition alleged that he converted the moneys sued for after the last bond was executed. The action was brought on the bond first executed, and the petition in that case, which was offered in evidence by the defendants, alleges that the treasurer misappropriated a larger sum of money than is sued for in this case, and that this misappropriation occurred prior to the time the bond sued on in this case was executed. A motion was made by the plaintiff to consolidate the two actions, but it gave no reasons why this should be done, and it was overruled.

The statute provides that "whenever several suits may be pending in the same court, by the same plaintiff against the same defendant, for causes of action which may be joined, or where several suits are pending in the same court, by the same plaintiff against several defendants, which may be joined, the court in which the same are pending may, in its discretion, order such suits to be consolidated." Rev. St. 1450. To authorize a consolidation in any case, under the statute, the causes of action must be such as, under the general rules applicable to the subject, may be joined. Neither the petition nor motion, in this case, show that the causes of action asserted in the two causes were such as might be properly joined; and, if the court was not vested with a discretion in such cases, it could not be held that it erred in overruling the motion to consolidate. If, however, we look to the petition in the other case, it is apparent that a cause of action was there stated which could not legally have been joined with the cause of action asserted in this. It would seem, where actions have to be brought against two sets of sureties on official or like bonds, given by a principal and different sureties, to secure the faithful performance of duty by the principal, for different terms, the one succeeding the other, that one action against the principal and all the sureties ought to be permitted when the plaintiff is unable to state and prove clearly when a misappropriation of funds occurred, and it may be that legislation upon this subject ought to be had. However this may be, we are not authorized to depart from well-settled rules of law to meet what may seem to be hard cases. Whether the appellant could truly allege a state of facts which would entitle it to have the two actions consolidated, we need not inquire.

It is alleged, in the answer of the defendants, that "the said Smith was the custodian of plaintiff's moneys, as its treasurer, long before they signed the said bond, and that about the amount sued for was intrusted to him more than a year before these defendants executed the bond sued on, and was by him indiscriminately mingled with other moneys in bank, and lodged therein, and drawn against in his (Smith's) individual name and capacity, and used and employed by him for other uses than those of said association; and that such methods of dealing with said funds, and the intention of the said Smith so to deal with the same, was known to plaintiff and its officers, but was unknown to these defendants; and they say that it was the duty of the plaintiff, at and before the making and delivery of the bond sued on, to communicate said facts to them, but that the plaintiff wholly failed to do so. Wherefore they say that they never became bound by the obligation sued on." In a subsequent paragraph in the answer it is alleged, in effect, that the plaintiff negligently failed to ascertain that its treasurer was misappropriating its funds before the bond sued on was executed; that this could have been ascertained; and that the failure to do so, and to inform the defendants of that fact before they became sureties, releases them from obligation on the bond. Demurrers to these parts of the answer were overruled. That the demurrer to the last paragraph of the answer referred to should have been sustained, is settled by the case of Bennett v. Association, 57 Tex. 73. There is some conflict of authority as to the extent of the obligation of one who takes security for the faithful discharge of duty by one who enters his employment to inform the surety of any facts, within his knowledge, illustrative of the unfitness of the employe, resulting from habits or delinquencies, and as to the effect of the failure to give such information. The fact that surety is required, of itself, would seem to be a sufficient notification to one proposing to become...