Southwestern Sur. Ins. Co. v. Davis
| Decision Date | 14 December 1915 |
| Docket Number | 7435. |
| Citation | 156 P. 213,53 Okla. 332,1915 OK 1066 |
| Parties | SOUTHWESTERN SURETY INS. CO. v. DAVIS ET AL. |
| Court | Oklahoma Supreme Court |
Rehearing Denied April 4, 1916.
Syllabus by the Court.
Corporations possess such powers as are expressly conferred upon them by law, and such implied powers as are necessary to enable them to exercise and enjoy the powers expressly granted.
Where a building and loan association enters into a contract that is germane to the purpose for which it is formed, is not in violation of its charter, nor against the public policy of the state or any statute prohibiting it, and by its promise induces a party relying thereon to expend money and perform his part of the contract, the corporation will be liable thereon.
Where a building and loan association, charged with the duty of filing a statement showing the manner of conducting its business, executes a bond as required by section 1321, Revised Laws 1910, and, receiving a certificate to transact business, the court in the absence of a showing to the contrary, will presume that such statement was filed, and the surety will be held to have executed such bond with knowledge of the manner of conducting its business, and will not be permitted to question the right of the association to conduct its business in such manner.
Section 1346, Revised Laws 1910, provides that the rule of the common law requiring a strict construction of the obligations of a surety shall have no application to the obligations of a surety for hire, but all such obligations shall be liberally construed in accordance with the rules of the general law applicable to policies of insurance.
If language in a bond of suretyship for hire is ambiguous and susceptible of two constructions, one of which will give effect to the bond, the other render it void at the time of its execution, that construction should be adopted which will make it effective.
Until the contrary is made to appear, the law presumes that officers have discharged the duties which the law imposes upon them.
Error from District Court, Oklahoma County; Geo. W. Clark, Judge.
Action by J. Ramsey Davis against the Southwestern Surety Insurance Company and another. Judgment for plaintiff, and defendant named brings error. Affirmed.
G. A Paul, of Oklahoma City, for plaintiff in error.
L. H Prichard, C. H. Shubert, and R. M. Campbell, all of Oklahoma City, for defendants in error.
On October 31, 1914, plaintiff filed his petition in the district court of Oklahoma county, against the Prudential Loan & Trust Company, and the Southwestern Surety Insurance Company, asking judgment against said defendants in the sum of $308, on a certain bond executed by the Prudential Loan & Trust Company, with the Southwestern Surety Insurance Company as surety thereon. Plaintiff alleged that the business of the Prudential Loan & Trust Company consisted in selling what is known as home and saving gold bonds, for seven of which plaintiff made application, which were issued to him on October 5, 1911, and that plaintiff paid therefor the full purchase price thereof; that on May 1, 1912, the Prudential Loan & Trust Company became insolvent and unable to fulfill its contracts, and on October 26, 1912, a receiver was appointed for said company, who administered the assets thereof and paid plaintiff the sum of $77. Issues were joined and trial resulted in judgment for plaintiff, and defendant Southwestern Surety Insurance Company brings error.
The Prudential Loan & Trust Company was chartered under the laws of this state, regulating building and loan associations, as found in chapter 15, arts. 7, 8, Rev. Laws 1910, and its sole method of doing business was by the issuance of said gold bonds, the conditions of which, briefly stated, are as follows: (1) By the payment of 10 per cent. of the purchase price the holder became eligible for a loan from the loan fund, which was created as follows: 90 per cent. of the money received from the purchase of gold bonds and all revenue on loans made out of the loan fund which was loaned to eligible members in the order of their application for gold bonds said bonds being issued and numbered at the home office. (2) After bond had been in force 12 months, the holder might receive all money back paid thereon, less $6 on each bond, with 4 per cent. interest for the average time, upon written notice of the intention to withdraw, and allowing the company 120 days in which to refund. (3) If gold bond was carried to maturity, which was 80 months, the company agreed to pay $500, the face value of each bond. From June 30, 1911, to January 1, 1912, the Prudential Loan & Trust Company had realized from the sale of bonds of this character about $20,000, from over 200 residents of this state, including churches and fraternal organizations. The evidence shows that on January 1, 1912, the company ceased doing business on this plan, but engaged in other business entirely foreign thereto. The officers of the company discovered about this time that they were unable to refund the money received on such gold bonds or to continue this character of business, and thereafter made efforts in other ways to procure money with which to comply with said contracts, but failed.
It is the contention of the Surety Company that this character of business was not authorized under the statutes of the state, and was outside of the charter powers of the company, and therefore it is not liable upon the bond. Corporations possess the powers expressly conferred upon them by law, and such implied powers as are necessary to enable them to exercise the powers expressly granted; and, if a contract made by a corporation is germane to the purpose for which it is formed, is not in violation of its charter, the public policy of the state or any statute prohibiting it, and the corporation by its promise induces a party relying thereon to expend money and perform his part of the contract, the corporation is liable upon such contract. Derr et al. v. Fisher et al., 22 Okl. 126, 98 P. 978; Oklahoma Portland Cement Co. v. Anderson et al., 28 Okl. 650, 115 P. 767; Overholser et al. v. Oklahoma Interurban Traction Co., 29 Okl. 571, 119 P. 127.
Chapter 15, art. 7, governs the method of organization, and prescribes the manner of conducting business, and enumerates the powers of domestic building and loan associations, and article 8 of said chapter 15 governs the business of foreign building and loan associations in this state. Domestic associations carrying on business only in the county of their domicile are not required to give bond, but section 1334 provides that where any domestic association carries on its business outside the county in which its principal place of business is located, such association shall be governed and regulated by the article governing foreign associations, and by section 1322 of this article such associations are required to file with the bank commissioner a copy of their charter, constitution, by-laws, and all other rules and regulations showing their manner of conducting business together with a statement containing certain other information, before they shall receive a...
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