Trovatten v. Minea

• Decision Date: 31 December 1942
• Docket Number: No. 33213.,33213.
• Citation: 213 Minn. 544,7 N.W.2d 390
• Parties: TROVATTEN, Commissioner of Agriculture, Dairy and Food, v. MINEA et al.
• Court: Minnesota Supreme Court

7 N.W.2d 390

213 Minn. 544

TROVATTEN, Commissioner of Agriculture, Dairy and Food, v. MINEA et al.

No. 33213.

Supreme Court of Minnesota.

December 31, 1942.

Appeal from District Court, Ramsey County; Kenneth G. Brill, Judge.

Action by R. A. Trovatten, Commissioner of Agriculture, Dairy and Food of Minnesota, on behalf of certain creameries, against A. M. Minea, the American Bonding Company, and others to recover on bond for amounts due for butter. From a judgment in favor of the American Bonding Company notwithstanding a verdict for plaintiff, the plaintiff appeals.

Judgment reversed.

Weyl & Weyl, of St. Paul, and Carl W. Gustafson, of Center City, for appellant.

Daniel F. Foley, of Minneapolis, for respondent.

PIRSIG, Justice.

This is an appeal from a judgment for respondent notwithstanding a verdict for plaintiff against respondent and defendant Minea.

From 1934 to September, 1939, the period here relevant, defendant A. M. Minea was engaged as a wholesale dealer in the business of selling and distributing butter to retail grocery stores, restaurants, and the like. During this period he purchased butter from the Somerset and Taylors Falls Creameries, in which A. J. Rivard was substantial owner and officer. As required by Minn.St.1941, §§ 27.01 to 27.20, Mason St. 1940 Supp. §§ 6240-18½ to 6240-18½p, 6240-19, 6240-20, 6240-21, Minea held a license as such wholesale dealer, and had qualified therefor by giving a bond, which until June, 1939, was in the sum of $500. As time went on it appears that Minea became in arrears in his payments to Rivard for butter purchased. This indebtedness had reached the sum of approximately $1,300 in the early part of 1939. Rivard became concerned and insisted that Minea increase the amount of his bond to $2,000, with the understanding that Rivard would pay a portion of the premium. Minea did obtain such a bond with respondent, the American Bonding Company, dated June 7, 1939. It designated Minea as the principal and respondent as surety. The conditions of the bond were in part that the principal should "faith fully perform the duties imposed upon a licensed dealer at wholesale * * * make payment, when due, of the purchase price of all produce purchased."

During the same period Minea claims that he was desirous of selling his business, but that he could not do so without obtaining a definite written contract from Rivard relating to the sale of butter by Rivard to him. After considerable negotiation, a written contract was prepared under the direction of Rivard and executed. The parties thereto, however, were not confined to Rivard and Minea. Mrs. Minea was added as one of the contracting parties. This agreement "granted unto A. M. Minea and Loretta Minea * * * hereinafter referred to as the dealers, the exclusive right to sell products manufactured" by Rivard in the territory covered by the Twin Cities. Throughout the agreement reference is made to "the dealers." It is "the dealers" who agree to pay for the butter delivered, to exert their best efforts to sell the products, and to pay interest on amounts past due. It is "the dealers" who agree to maintain a wholesale dealer's bond in conformity with law. In short, it is an agreement between the creameries and Mr. and Mrs. Minea jointly.

This agreement was made on July 18, 1939. As stated above, the bond executed on June 7, 1939, was made by Mr. Minea only as principal. Mrs. Minea was not included. After the foregoing agreement was made, no new bond was procured, either by Mrs. Minea or by the Mineas jointly. Therein arises all of the difficulty here encountered. Had the transaction been in the hands of a competent lawyer, undoubtedly the questions with which we are now confronted would not have arisen. The testimony in the case suggests that not a lawyer but a layman drew up this contract for the parties. This court, in previous decisions, has made it plain that persons not admitted to the bar violate the law when they engage in the practice thereof. Fitchette v. Taylor, 191 Minn. 582, 254 N. W. 910, 94 A.L.R. 356; In re Otterness, 181 Minn. 254, 232 N.W. 318, 73 A.L.R. 1319. As this case demonstrates the interests of clients and the public require that this prohibition be observed.

In September, 1939, Rivard cancelled the contract. The present suit, as permitted by statute, is brought by the commissioner of agriculture on behalf of the creameries. In substance and effect it is an action by the creameries and will be treated as such here. The suit is on the $2,000 bond to recover amounts due for butter which had been delivered subsequent to the execution of the bond and the agreement. The questions with which we are concerned arise from the defenses interposed by respondent. Its principal defense is that under the agreement of July 18, 1939, the business, in the course of which the butter was purchased, was conducted by Mr. and Mrs. Minea as joint operators, whereas respondent's obligation under the bond extended only to the acts and obligations of Mr. Minea alone, and that this substantial change in the status of its principal operated to relieve it from liability as surety under the bond.

It is undoubtedly the general rule that the liability of a surety for the acts of one or more individuals does not extend to acts performed by him or them jointly with others. The most frequent example arises in cases where the principal is a member of a partnership. A surety for a partner is relieved from liability if a change is made in the membership of the partnership. Spokane Union Stockyards Co. v. Maryland Cas. Co., 105 Wash. 306, 178 P. 3; Lumbermans B. & T. Co. v. Sevier, 149 Wash. 118, 270 P. 291; National Surety Co. v. Geo. E. Breece Lbr. Co., 10 Cir., 60 F.2d 847. By the addition of a new partner, there is always the possibility...