St. Louis Brewing Ass'n v. Hayes

• Decision Date: 21 November 1899
• Docket Number: 799.
• Citation: 97 F. 859
• Parties: ST. LOUIS BREWING ASS'N v. HAYES et al.
• Court: U.S. Court of Appeals — Fifth Circuit

97 F. 859

ST. LOUIS BREWING ASS'N v. HAYES et al.

No. 799.

United States Court of Appeals, Fifth Circuit.

November 21, 1899

George E. Mann, for plaintiff in error.

John Lovejoy, Alex Sampson, and M. L. Malevinski, for defendants in error.

Before PARDEE, McCORMICK, and SHELBY, Circuit Judges.

SHELBY Circuit Judge.

On the 18th of November, 1893, the St. Louis Brewing Association made a contract with George Hayes, making him its agent for the sale of beer. This contract was duly signed by both parties to it. The association agreed to furnish Hayes the beer at a price stated, and he was to be its only agent to sell beer in Galveston, Tex. He was to pay cash on receipt of bill of lading, and to return empty kegs and barrels. The association was to furnish him with horses, carts, and harness, free of charge, to perform the duties of the agency the same to be returned to the association at the termination of the agency. The agreement required the agent 'to give good and sufficient bond or security, in the amount of $2,500, signed by two responsible sureties. ' The required bond was given. In the body of the bond, it purports to be the obligation of 'George Hayes, as principal, and the other subscribers hereto, Nicolaus Bohn, H. C. Kerst, and George Schwoebel, as sureties. ' The bond is signed at the foot by the three sureties named in it; but it was not signed by George Hayes. The bond bears date November 20 1893,-- two days after the date of the contract of agency signed by George Hayes, under which the bond was given. The condition of the bond was, in brief, that Hayes should pay the association for the beer sold and delivered to him under the contract from its date, 'November 18, 1893, to November 18, 1894. ' The bond recited the fact that Hayes was appointed agent for the association, and that it was given as the security required by the agreement. Under the contract the association delivered beer to Hayes who received and sold it. The value of the beer delivered was over $11,000, but payments were made by Hayes which reduced the debt to about $5,000. This suit was brought to recover this debt. The plaintiff, by its petition, sought judgment against Hayes for the amount remaining due on the account, and judgment against the defendants who are sureties on the bond for the amount of the bond, $2,500. On the first trial in the court below, verdict and judgment were had against Hayes for the amount due on the account; but, under the instructions of the court, the sureties were relieved of liability by reason of an alleged new contract between the association and Hayes. A writ of error was sued out to this court, where it was held that the transaction on which the case had been determined in favor of the sureties 'did not operate wholly to release them from their obligation. ' The opinion of this court on this point appears in 17 C.C.A. 634, 71 F. 110. The case was reversed, and remanded for a new trial. On the second trial, verdict and judgment were had against Hayes for $5,167.46, with interest from January 1, 1895, and a verdict for the sureties on the bond (to quote the verdict), 'releasing them from responsibility on the bond. ' Hayes is insolvent. The case is brought to this court by the association, seeking to make the sureties liable for $2,500 of the debt.

The main question in this case is whether the failure of Hayes to sign the bond made it invalid. The defendants the sureties alleged in their answer that the bond was 'not the obligation of the defendants, in that it was not executed by the principal therein named. * * * ' The evidence of these defendants tended to show that they signed as sureties with the understanding that Hayes was to sign the bond as principal. Their answer also averred that the bond was not to be delivered until it was so signed by Hayes, the principal named in it. At the request of the defendants, the court charged the jury:

'If you believe from the evidence in this case that the bond or written obligation sued on was never signed and delivered by the defendant George Hayes, or by any one for him, or with his knowledge and consent, to the St. Louis Brewing Association, the plaintiff in this suit, then your verdict should be for the defendants Nicolaus Bohn, H. C. Kerst, and George Schwoebel.'

It was an undisputed fact in the case that George Hayes did not sign the bond. The bond itself was in evidence, signed only by the sureties. To instruct the jury to find for the sureties unless Hayes signed the bond, was equivalent to peremptory instructions to discharge the sureties. It was, in effect, the announcement of the court, binding on the jury, that the bond was not a legal obligation of the sureties, even if formally delivered, because it had not been signed by George Hayes, the principal named in it. If the failure of Hayes to sign this bond made it invalid, this charge is correct; otherwise, it is erroneous. The reason underlying the discharge of sureties from liability in cases like this is the increased liability of the surety caused by the failure of the principal to sign the obligation executed by the surety. It would be manifestly unjust to hold the surety bound, when the principal fails to sign the instrument, if by its terms it was to be signed by him, and his signing fixed a liability on him not otherwise placed on him by the transaction, for in such case his signature would lessen the liability of the surety. The same principle would govern where the signature of the principal would give the sureties some right or power tending to protect them which was not conferred on them otherwise by the transaction or by law. The surety on a...