Tyler v. Walt

• Decision Date: 02 March 1936
• Docket Number: 33453
• Citation: 167 So. 182,184 La. 659
• Court: Louisiana Supreme Court
• Parties: TYLER v. WALT et al

167 So. 182

184 La. 659

TYLER v. WALT et al

No. 33453

Supreme Court of Louisiana

March 2, 1936

Rehearing Denied March 30, 1936

Fred. Zengel, Jr., and H. W. & H. M. Robinson, all of New Orleans for tyler.

P. M Milner, of New Orleans, for Fidelity & Deposit Co. of Maryland.

William C. Dufour, Purnell M. Milner, and Gordon W. Goodbee, Jr., all of New Orleans, for liquidators of Hibernia Bank & Trust Co.

OPINION

ROGERS, Justice.

Sterling P. Tyler sued Ernest W. Walt, the liquidators of the Hibernia Bank & Trust Company and the Fidelity & Deposit Company of Maryland, in solido, to recover certain bonds, or $ 7,000, the price thereof, which he alleged were intrusted by him to Walt as manager of the Holmes Store Branch of the Hibernia Bank & Trust Company, for safe-keeping in the vault of the bank, and which were converted by Walt to his own use. The suit was filed more than thirty days after plaintiff had made an unavailing written demand for the payment of his claim on the defendant liquidators and on the defendant surety company, and attorney's fees of 10 per cent. on the amount involved were also asked in the suit.

Plaintiff's demand against the defendant surety company was predicated on his claim that its bond in favor of the Hibernia Bank & Trust Company insured the fidelity of Walt and covered the bank's liability to plaintiff for the loss he had sustained through the breach of trust committed by Walt, the bank's employee.

Exceptions of no right or cause of action were filed by the liquidators of the bank and by the surety company. The exception of the liquidators was overruled, but the exception of the surety company was sustained, and as to it plaintiff's suit was dismissed.

Walt answered, denying that plaintiff's bonds were intrusted to him for safe-keeping. He admitted that he had pledged the bonds to the Hibernia Bank & Trust Company as collateral security for his personal debt, alleging that plaintiff had lent him the bonds for that purpose.

The defendant liquidators answered, denying the material allegations of plaintiff's petition, alleging specifically that the transactions between plaintiff and Walt, the bank's employee, were purely personal. The same defendants also filed a plea of estoppel on the ground that plaintiff had made no claim on defendants from August 8, 1933, when plaintiff learned that Walt had converted the bonds to his own use, until November 7, 1933, when he notified the special agent of the state bank commissioner in charge of the liquidation of the bank of the actions of Walt, and demanded the return of his bonds.

The defendant Walt filed a plea of prescription of one year, and a like plea was filed by the defendant liquidators. Both pleas were overruled.

The case was tried by the court sitting with a jury, and resulted in a verdict and judgment in favor of plaintiff against the Hibernia Bank & Trust Company, in liquidation, condemning the liquidators to deliver plaintiff the bonds claimed by him, or, in the alternative, to pay plaintiff $ 7,000, their value, and interest, together with 10 per cent attorney's fees.

Plaintiff appealed from the judgment so far as it failed to give him judgment in solido against the defendant Walt, and also from the judgment maintaining the exception of no right or cause of action filed by the Fidelity & Deposit Company of Maryland and dismissing the surety company from the suit.

The liquidators of the Hibernia Bank & Trust Company also appealed from the judgment.

The exception of no right or cause of action filed by the Fidelity & Deposit Company of Maryland was properly sustained by the district court.

The bond here involved is what is generally known as a 'Banker's Blanket Bond.' For an agreed premium the bond specifically insured the Hibernia Bank & Trust Company and several of its affiliate and subsidiary corporations against the direct loss of any money or securities, or both, 'in which the Insured has a pecuniary interest, or held by the Insured as collateral, or as bailee, trustee or agent, and whether or not the Insured is liable therefor.' Plaintiff was not a party to the bond, nor named therein as obligee or indemnitee, nor did he pay any consideration or premium therefor. The bond, read as a whole, negatives the idea that it was made for the benefit of any one except the designated obligees or indemnitees.

We think it would be contrary to common sense and violative of the purpose of the bond for us to include among the obligees or indemnitees a party who was neither privy to the contract nor to the consideration, and to sanction a suit by such third party against the surety company, as obligor, where no such result was intended by the contracting parties.

A case similar in principle to the one presented here was that of Salmen Brick & Lumber Company v. Le Sassier et al., 106 La. 389, 31 So. 7. There the bond was not a statutory bond executed under the provisions of Act No. 180 of 1894, but was a conventional bond containing the direct obligation of Le Sassier, the contractor, and Fidelity & Deposit Company of Maryland, his surety, to Henderson, the owner, to secure the carrying out of a building contract. There was no stipulation pour autrui contained in the bond. This court held that the bond did not bind the surety for the obligations of the contractor to the laborers and materialmen and that the latter had no right of action against the surety.

The right of a third person to sue on contracts made for his benefit is clearly defined by the statutes of the state and the jurisprudence arising out of the interpretation of those statutes. Plaintiff's action against the Fidelity & Deposit Company of Maryland is not authorized by the statutory law or by the jurisprudence of this state. Act No. 55 of 1930, amending Act No. 253 of 1918, relied on by plaintiff, affords no support for plaintiff's action. That statute applies to accidents and damages for the injuries sustained or the losses occasioned thereby; and the purpose of the act was to impose liability on the casualty insurer in case of the insolvency or bankruptcy of the insured tort-feasor.

Plaintiff's asserted cause of action against the Fidelity & Deposit Company of Maryland contravenes the rule that a promise for a valid consideration by one person to another gives no right of action to a third person who is neither privy to the contract nor to the consideration, where the contract was not made for his benefit and he was not intended to be benefited thereby.

On the theory that plaintiff's action was in tort, the defendants Walt and the liquidators of the Hibernia Bank & Trust Company pleaded that the action was prescribed by plaintiff's failure to institute it within one year from the date the alleged tort was committed. The trial judge overruled the plea on the ground that plaintiff's action was predicated on a contractual obligation and not on a tort. Defendants have apparently acquiesced in the ruling, since they have not presented in this court any argument in support of their plea. For our part, we think the ruling was correct.

The plea of estoppel filed by the liquidators of the Hibernia Bank & Trust Company was both a plea of judicial estoppel and estoppel in pais. The trial judge overruled the plea of judicial estoppel and referred the plea of estoppel in pais to the jury with the merits of the case. We assume the jury found that the plea was untenable, because they returned a verdict in favor of plaintiff, which had the effect of rejecting the plea.

We find no error in the ruling of the judge or in the action of the jury.

The plea of judicial estoppel is founded on allegations in plaintiff's petition to the effect that, after the run of the bank had started in February, 1933, plaintiff called on Walt, who was still the manager of its Holmes Store Branch, for the delivery of the bonds, which plaintiff had intrusted to him in his official capacity for safe-keeping, but that Walt gave him various dilatory excuses for his failure to do so; that on August 8, 1933, Walt called at plaintiff's home to explain his failure to deliver the bonds, and that, after Walt left plaintiff's home, plaintiff found Walt's receipt dated August 8, 1933, the last paragraph of which reads as follows, viz.: 'It is understood that I am to represent Mr. S. P. Tyler's interest in the handling of the above securities with the guarantee that within reasonable time he will receive full value of the above,' which paragraph plaintiff alleged was a pure fabrication on the part of Walt, and that at no time did plaintiff enter into any such agreement with Walt; that on October 25, 1933, plaintiff learned that without his knowledge or consent Walt had pledged his bonds to the bank, his employer, to secure a personal loan, and that the bonds were in possession of the liquidators of the bank or the Reconstruction Finance Corporation; and that on November 7, 1933, plaintiff and his counsel called on the special agent of the state bank commissioner, in charge of the liquidation of the bank, and that at his suggestion plaintiff filed with him on November 15, 1933, a sworn statement giving the facts, together with a written demand for the return of his bonds.

It is obvious that the allegations which we have summarized were embodied in the petition for the purpose of disclosing all the facts as a matter of convenience to the parties concerned. Plaintiff's bonds were pledged by the bank to the Reconstruction Finance Company in May, 1933. Plaintiff's suit was not filed until February 26, 1934. The defendant liquidators do not pretend, nor could they successfully pretend, that they were misled to their prejudice or that they have been injured in any manner by the recitals of plaintiff's...