Shaw v. Massachusetts Bonding & Ins. Co.
| Decision Date | 06 December 1963 |
| Docket Number | No. 16258,16258 |
| Citation | 373 S.W.2d 553 |
| Court | Texas Court of Appeals |
| Parties | Z. George SHAW et al., Appellants, v. MASSACHUSETTS BONDING & INSURANCE CO., Appellee. |
Wm. Andress, Jr., Dallas, for appellants.
Brundidge, Fountain, Elliott & Churchill and Roger A. Hansen, Dallas, for appellee.
Appellee, Massachusetts Bonding & Insurance Company (now known as Hanover Insurance Company) brought this suit against Z. George Shaw and wife, Ona Daly Shaw, d/b/a Texona Decorating Company, and Willie L. Barnett, trading as Bill Barnett & Associates, as indemnitors, for loss on a performance bond. Appellee based its suit upon an application for bond executed by Shaw and his wife as co-partner, and Barnett, which provided for indemnification of the surety company in the event of loss. Appellee alleged that it had paid out certain amounts, evidenced by vouchers or drafts, for materials and services furnished to the pricipal on the bond prior to date of default. Appellee not obtaining service on Willie L. Barnett, dismissed him from the case. The suit was tried to a jury and resulted in a judgment for appellee. Shaw and wife appeal, complaining primarily concerning the admissibility of certain testimony and also that the verdict of the jury is not supported by any evidence or, in the alternative, insufficient evidence.
By their first three points, grouped together, appellants complain of the action of the trial court in admitting into evidence a letter, designated Exhibit 2, and containing admissions of the correctness of certain accounts paid by the surety company on the loss in question. The admissions were signed by 'Sarah Daniels, Attorney for Ona Daly Shaw'. Appellants contend that such a letter was inadmissible because (1) same was inadmissible against Z. George Shaw; (2) there was no showing of authority of Sarah Daniels to sign the admission; and (3) that such confirmation of the correctness of the accounts was really a part and parcel of a compromise and settlement negotiation and therefore same was inadmissible, and the court should have submitted an appropriate issue inquiring as to whether it was a part of a compromise and settlement agreement. We think the exhibit was properly received by the court. The facts and circumstances surrounding the introduction of this evidence are as follows: The surety company's pleadings alleged, inter alia, that 'defendants, by said application, agreed to indemnify and hold plaintiff harmless of and from all loss, costs and expenses, including attorneys fees, which plaintiff might sustain in consequence of the execution of said bond, and agreed that the vouchers issued by plaintiff in discharge of any obligation shall be conclusive evidence of the fact and extent of liability of the surety.' The application for the bond, made the basis of this suit, provided in Paragraph XIV: 'The vouchers or other evidence of any payment made in good faith by the company arising out of or in connection with the bond or bonds herein applied for shall be taken as conclusive evidence * * * of the fact and extent of liability of undersigned to the company.' At the end of the application the printed form provided: 'If co-partnership, sign here:', followed by 'Texona Decorating Company, Bill Barnett & Associates, Ona Daly Shaw (individually and as co-partner), Z. George Shaw (individually and as co-partner), and Willie L. Barnett (individually and as co-partner).'
The records reveal that Ona Daly Shaw was represented by Sarah Daniels and Bill Andress, as attorneys, during the period in question and that Sarah Daniels had several telephone conversations with Lloyd Elliott, attorney for the surety company, concerning the losses under the bond in question. The record further reveals that as various claims were presented to the surety company, after default of the principal, they were examined by Lloyd Elliott, as attorney for the surety company, who would usually telephone Sarah Daniels concerning the correctness of certain claims prior to issuance of drafts in payment thereof. On one occasion Sarah Daniels told Elliott that the principal was in her office and that she had talked with the principal and that certain claims were correct. Drafts were prepared by the surety company to pay such claims, but before sending them out, attorney Elliott asked Sarah Daniels to confirm his understanding as to the correctness of these claims. Thereafter, under date of June 9, 1960 attorney Elliott forwarded to Miss Daniels a letter, known as Exhibit 2, in which he said:
'We are today requesting drafts covering the following claims:
The Patent Scaffolding Company $231.40
Southwestern Glass & Paint Co. 440.94
Pratt & Lambert, Inc. 5,250.16
Pittsburgh Plate Glass Co. 2,484.55
Safway Scaffolds Co. 120.10
The Texas Company 82.50
It is our understanding from our conversation with you that your clients have confirmed the correctness of these claims.
Will you be kind enough to confirm this by signing the attached copy of this letter and returning it to us?
This will confirm the correctness of the above accounts.
/s/ Sarah Daniels
Attorney for Ona Daly Shaw'
When Exhibit 2 was offered in evidence objection was made thereto that same was a part and parcel of a settlement negotiation and therefore not admissible. Also, same was objected to because there was no showing of authority on the part of Miss Daniels to bind Mr. Shaw. Miss Daniels testified that the letter was signed by her after discussing certain settlement propositions with attorney Elliott. Attorney Elliott denied that settlement negotiations were discussed. The court refused defendants' requested issue inquiring as to whether or not Exhibit 2 was a part and parcel of settlement negotiations.
There was no denial of the capacity in which appellants were sued as provided by Rule 93, Texas Rules of Civil Procedure. The evidence is conclusive that Z. George Shaw was a partner with his wife, Ona Daly Shaw, and therefore the actions and conduct of his partner would bind him. 32 Tex.Jur., Partnership, Sec. 79.
Neither do we think there is any substance in appellants' contention that the letter was inadmissible, being a part and parcel of a compromise and settlement agreement. It is to be observed that there is nothing whatsoever in...
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