Southern Sur. Co. v. Calverly

• Decision Date: 30 April 1924
• Docket Number: No. 23922.,23922.
• Citation: 143 N.E. 626,195 Ind. 247
• Parties: SOUTHERN SURETY CO. v. CALVERLY.
• Court: Indiana Supreme Court

195 Ind. 247

143 N.E. 626

SOUTHERN SURETY CO.

v.CALVERLY.^*

No. 23922.

Supreme Court of Indiana.

April 30, 1924.

Appeal from Superior Court, Elkhart County; William B. Hile, Judge.

Action by Hugh O'Donnell, on whose death Wm. F. Calverly, administrator, was substituted, against the Southern Surety Company. Judgment for plaintiff, and defendant appeals. Affirmed.

Orion L. Rider, of Vineta, Okl., and Deahl & Deahl, and Louis M. Hammerschmidt, all of South Bend, for appellant.

John G. Yeagley and Arthur L. Gilliam, both of South Bend, and Harry R. Lewis and Arnold J. Padgett, both of Vincennes, for appellee.

EWBANK, C. J.

Appellee's decedent sued to replevin 50 special assessment improvement bonds, of the aggregate face value of $11,900, issued by the city of Bridgeport, Ill. While the cause was pending, several of the bonds matured and were paid to appellant, and appellee recovered judgment for the face of the bonds, with interest, in the total sum of $15,460.10. Overruling the motion for a new trial is assigned as error, under which appellant complains of the refusal to give a requested instruction and the admission of certain evidence, and insists that the verdict is not sustained by sufficient evidence and is contrary to law, and that the damages are excessive.

It was shown without dispute that appellee's decedent was the owner of the bonds, that they were not negotiable by the merchant, but were payable only out of special assessments, and that appellant received them as collateral security for a debt of Stewart, Sheets & Co., a partnership consisting of said decedent's father-in-law and another man to whom decedent had loaned them, and that demand was duly made before suit. There was evidence (not undisputed) to the effect that they were so loaned on May 6, 1913; that at that time the partnership executed a receipt for them, which certified that the said partners “have in their possession $13,000 in Bridgeport special assessment bonds belonging to Hugh O'Donnell (appellee's decedent), which are to be delivered to said Hugh O'Donnell on demand without charge”; that the partners were contractors for the construction of a sewer in Vincennes, Ind., and appellant was the surety on their bond; that O'Donnell was the son-in-law of one of the partners, and was employed by the partnership; that they asked him to “let them have the bonds to put up at Indianapolis to secure a loan.” and he said he would, and brought them the bonds; that they agreed to pay the interest on the bonds at what the bonds were drawing, and to keep them intact and return them to O'Donnell, and promised to return them when they got a settlement with the trust company at Indianapolis from which the loan was obtained, representing that said partners had a balance of $45,000 coming to them; that an officer of the appellant company who was managing its business at Vincennes and South Bend knew the bonds belonged to O'Donnell, the son-in-law; that later in the same month O'Donnell asked for the return of his bonds, and again asked to have them returned five months later, but each time was told that they were still down at Indianapolis, “tied up,” and that O'Donnell did not know that they had passed into the possession of anybody else than the trust company at Indianapolis until nearly two years had elapsed; that within five or six weeks after the bonds were loaned by O'Donnell to the partnership, and used by it as security for a loan from the trust company at Indianapolis (on June 11, 1913), the partners obtained a new loan from a trust company of South Bend and paid off the Indianapolis loan, and the bonds were delivered to the trust company at South Bend as collateral for the new loan, and the partners at that time executed a writing by which they agreed that the bonds should be so deposited as collateral security; that within four months thereafter the appellant company, which had also became surety for the partners on a second contract, made them a new loan, part of which was paid on their debt to the trust company at South Bend, and that the partners then delivered to the trust company at South Bend a written notice that the appellant company should “have a lien on all funds and bonds coming into your hands in excess of the amount necessary to pay off the note of $25,000 due you and the amounts advanced by you,” and the trust company at South Bend acknowledged, under date of September 26, 1913, the receipt of such order, and then agreed in writing that said “order and assignment is prior and superior to any other orders, claims, assignments, or demands against said funds, security, and collateral,” except what was then due itself; that thereafter a vice president of appellant company, who was managing its business in connection with these matters, was told by Hugh O'Donnell that the Bridgeport bonds, which the...