Title Guar. & Sur. Co. of Scranton of Scranton, Pennsylvania v. State ex rel. Leavenworth State Bank

• Decision Date: 14 January 1916
• Docket Number: No. 8609.,8609.
• Citation: 61 Ind.App. 268,111 N.E. 19
• Court: Indiana Appellate Court
• Parties: TITLE GUARANTY & SURETY CO. OF SCRANTON, PA., v. STATE ex rel. LEAVENWORTH STATE BANK.

61 Ind.App. 268

111 N.E. 19

TITLE GUARANTY & SURETY CO. OF SCRANTON, PA.,

v.STATE ex rel. LEAVENWORTH STATE BANK.

No. 8609.

Appellate Court of Indiana, Division No. 2.

Jan. 14, 1916.

Appeal from Circuit Court, Harrison County; Wm. Ridley, Judge.

On petition for rehearing. Petition overruled.

For former opinion, see 109 N. E. 237.

Major A. Downing, of Indianapolis, Samuel A. Lambdin, of English, and Major W. Funk, of Corydon, for appellant. Stotsenburg & Weathers, of New Albany, for appellee.

CALDWELL, J.

Appellant, by its petition for a rehearing, earnestly and ably contends that the court in its original opinion (109 N. E. 237) erred in two material respects, to the following effect: (1) In holding that the bond involved in this action, although broader in its conditions than as required by the statute under which it was apparently given, may nevertheless be enforced according to its terms. (2) In applying sections 400, 401, and 700, Burns 1914, in order that the judgment below might be affirmed.

Respecting the first point, the holding is substantially that, where a board of county commissioners is authorized by a statute to contract for the performance of a work of public improvement, it may, by virtue of its incidental powers, require of the contractor the execution of a bond with surety, conditioned for the proper performance of the work and other matters properly related thereto, even in the absence of a statute providing that such a bond be taken; that where a statute requires that a bond be taken, conditioned as specified by such statute, the board may, by virtue of such incidental powers, take a bond more broadly conditioned than as required by the statute, provided the statute does not prohibit the taking of such a bond, and if the matter of the additional provisions is properly related to the work of the improvement, and that if such a bond be voluntarily given in consideration of the contract it may be enforced according to its terms.

It is now contended that this court in developing such general principles and in specifically applying them ran counter to certain decisions of the Supreme Court and also of this court, as United States Fidelity Co. v. Poetker, 180 Ind. 255, 102 N. E. 372,State ex rel. v. Heim, 108 N. E. 776, and State ex rel. v. Fletcher, 1 Ind. App. 581, 28 N. E. 111. In the Poetker Case, a bank cashier's bond was involved. It was executed pursuant to a statute the terms of which required that the board of directors take from the cashier a bond with surety, conditioned as specified by the statute. The bond as in fact executed contained limitations the effect of which, literally construed, was to narrow the conditions of the bond as required by the statute. Under such circumstances, the court held, in an action brought against the surety on the bond, that it should be construed and enforced as if it in fact contained the statutory conditions undiminished and unqualified. The question of whether a board of directors of a bank has the power, in the discharge of the discretionary duties of that office, to exact from a bank cashier as a part of the contract of employment, a bond conditioned more broadly than a statutory requirement that a bond with certain specified conditions be taken, or whether such a bond, if given, may be enforced according to its terms, was not involved, and hence not decided. In State ex rel. v. Heim, supra, a contract for a public improvement provided that the contractor's bond required by the board of commissioners should contain a certain condition not specified by the statute. The bond as executed in fact contained only the statutory conditions. In a suit brought by the board of commissioners against the surety on the...