6 Wyo. 1 | Wyo. | 1895
Lead Opinion
This is an action brought in the district court by defendant in error on two promissory notes, the execution of which in his favor by plaintiff in error is admitted. The notes were executed under the following circumstances: One Charles Rastaetter was treasurer of school district number six in Converse County, and defendant in error and John Schlichter were sureties on his bond. Rastaetter was, or had been, partner of plaintiff in error in a mercantile business. Shortly prior to April 7, 1890, Rastaetter absconded, and was defaulter in the funds of the school district to the amount of $542.82. The notes are of that date and for that amount — one for $300.00 at sixty days and the other for $242.82 at four months, both with interest at twelve per cent per annum from maturity.
At the time of the execution of the notes, defendant in error and Charles Schlichter, sureties of Rastaetter, were attempting to have an attachment served upon the interest or supposed interest of Rastaetter in the property of the partnership consisting of Rastaetter and plaintiff in error. Upon the execution of the notes these proceedings were discontinued. It is claimed that this suit in attachment, if commenced at all, was not in proper form, and that the notes were given without consideration and under duress ; but it is immaterial whether the action was in proper form, or whether it was commenced at all, or not. The parties had a right to prosecute an action by attachment against Rastaetter to obtain indemnity as his sureties, and the alleged mistake in the form of action is immaterial. The settlement of an action, either begun or threatened, unless
Defendant in error testifies that pending attachment proceedings he told Bolin, who wished to avoid the service of the attachment of the interest or supposed interest of the absconding partner, that in order to discontinue the attachment suit he (plaintiff in error) must have security. He further testifies that the notes sued on were given to indemnify him ; that he thereupon stopped the attachment proceedings and the suit against Rastaetter, and “this closed up the entire transaction.” This portion of the testimony is not contradicted, and is relied upon by both parties.
At the time of the execution of the notes, the following written agreement was signed by defendant in error:
“Whereas George Bolin has this 7th day of April, A. D. 1890, made two notes for the amount and sum of five' hundred and forty-two dollars, being the amount claimed to be short by Charles Rastaetter as treasurer of school district number six. It being hereby agreed by the payee of said notes that if the said amount found to be due said district is less than aforesaid amount it shall be allowed and credited on said notes.”
The defalcation was for the exact amount of the notes, and the sureties, defendant in error and Charles Schlichter, afterward paid a judgment for that amount against them and in favor of the school district. The security or indemnity, which defendant in error had obtained, was these notes of plaintiff in error for the exact amount of the defalcation of Rastaetter. And this security or indemnity was for the benefit of his co-surety, Charles Schlichter, equally with himself. Even if defendant in error intended this indemnity for his own benefit to the exclusion of his co-surety, the law will apply it for the benefit of both. (24 Am. & Eng. Ency. of Law, p. 815, subdiv. 7, note 3,
This legal proposition is nowhere questioned or doubted by any authority, so far as we are advised, and it is not necessary to discuss the question, as there are no conflicting authorities to weigh. It is immaterial in what proportion the two sureties paid the defalcation. Equity will make the burden of payment and the benefit of the indem-. nity equal between them by contribution. And defendant in error could be fully indemnified by nothing less than the payment of the amount of the defalcation.
In our opinion the judgment of the trial court should have been rendered in favor of defendant in error for the entire amount of the notes. It was for a less amount, but he has not appealed. The other party can not complain that the amount of the judgment against him is too small. Judgment affirmed.
Justice Potter, having announced his disqualification to sit in the hearing of this cause, the other justices called in Judge Hayford of the second judicial district.
Rehearing
ON PETITION FOR REHEARING.
It is urged that the majority of this court were in error in saying on the first hearing of this cause that the indemnity against loss obtained by Metcalf as surety for Charles Kastaetter was for the benefit of his co-surety equally with himself. It is urged that this rule applies only where the indemnity is furnished by the principal debtor, and not where it is furnished by a third party. It is true that a third party may indemnify one of several sureties to the exclusion of the co-sureties. This is a right of the party furnishing the indemnity so to limit his liability. There is no lack of authority on the part of a co-surety to accept indemnity from a third party sufficient to secure all of the sureties against loss. The indemnity furnished in this
It is urged that there was error of law occuring at the trial in the admission i-n evidence of a former judgment against defendant in error and his co-surety, John Schlichter, in favor of the school district on account of the defalcation of Rastaetter. 12 Am. & Eng. Ency. of Law, p. 81, is cited in support of this contention, but that authority seems not to sustain the point to which it is cited. It reads as follows: “As a rule, a judgment is not admissible in evidence against a stranger to the action in which ‘ ‘it was rendered. An agent or attorney is not estopped by “a judgment because he conducted the suit, nor is a wit“ness bound by a judgment in which he testifies. But in “the absence of fraud and collusion, a judgment is conclu- ‘ ‘sive evidence, even against a stranger, of the relation of “debtor and creditor between the parties thereto, and of “the amount of the indebtedness.” The amount of the indebtedness is the fact to be determined in the case at bar, not the validity of the former judgment. The limitation of this rule is stated in note 3, p. 86: “Supposing “such third persons were not bound with or for the parties “found liable, the rule applies. ” And further: “Accord- * ‘ing to some authorities, the judgment is prima facie evi
A question has been raised as to the necessity of joining the co-surety, Schlichter, as party plaintiff in the action. This seems to be unnecessary in either view of the case. If the indemnity was for the benefit of Metcalf alone, he is the only party in interest, and the only one competent to sue. If for the benefit of Metcalf and Schlichter both, then Metcalf is a “person with whom or in whose name a “contract is made for the benefit of another, ” and may sue alone. See Rev. Stat., Sec. 2384.
At the time plaintiff in error executed the notes sued on, the sheriff of the county was proceeding to take possession of the goods in question by virtue of a writ of attachment against Rastaetter. It is urged that there was evidence tending to show that no such writ of attachment had been issued, and that no bond for the attachment had been filed, and that the suit in which the attachment was ■claimed to have been issued was not really commenced. It is urged that it was error to take this issue from the jury. If the consideration for the notes had been the forbearance to proceed under this particular writ, this would be plausible. But it would have been of small consequence to plaintiff in error to protect himself from this writ, and leave'matters so that another would be immediately sued out and served on the goods. If any of the ■objections now urged to the writ are truthful, he could have made short work of that writ by raising those objections in a proper proceeding in the trial court, and without giving any notes or other indemnity to Rastaetter’s ■sureties or either of them. But his object was to prevent the seizure of the goods by attachment. He testifies, “I “gave these two notes to save my property from attach“ment.” A decision that the particular writ which the sheriff held was invalid, would not have accomplished this object. Plaintiff in error was evidently aware of this, and he accomplished his object in another way,- by giving as indemnity the notes which he now repudiates. It is
Rehearing denied.
Dissenting Opinion
dissenting.
I think I should give my reasons for dissenting from the majority opinion, particularly as I merely announced my dissent upon the original hearing. The plaintiff below brought suit upon two promissory notes executed by Bolln, the defendant, and alleged in his petition nothing more than is ordinarily alleged in such a suit. The defendant in his answer set up five defenses, one of which was a general denial. The substance of the other defenses is as follows: That the promissory notes sued upon were obtained without any consideration whatever, and at the time of the execution of the notes, defendant was not and never had been indebted to plaintiff in any sum whatever; that the plaintiff as an inducement to the defendant to execute and deliver said notes, falsely and fraudulently represented to defendant that one Charles Bastaetter was indebted to plaintiff in the sum of $542.82 on account of the defalcation of Bastaetter to a certain school district in Converse County, of which he, Bastaetter, was treasurer, said Bastaetter having absconded, and that plaintiff “had to pay ” the amount of the defalcation as surety on the official bond of Bastaetter; that Bastaetter had been a
A reply was filed to the answer, admitting that the defendant Bolln had been engaged with Kastaetter in business dealings, and that they had been doing business under the name of Bolln and Kastaetter; that at the time of the execution of the notes, Kastaetter was a fugitive from just tice and a non-resident of the State, and that the plaintiff well knew this; and, further, the plaintiff denied that the collateral agreement was made at the time of the execution and delivery of the notes, but asserts that it was made thereafter, and denied that by the terms of said agreement
The collateral agreement referred to, executed by plaintiff to defendant, is as follows:
“Whereas, George Bolln has this 7th day of April, “A. D. 1890, made two notes for the amount and sum of “five 'hundred and forty-two dollars, being the amount 1 ‘claimed to be short by Charles Rastaetter, as treasurer of “school district No. six (6). It being hereby agreed by the ‘ ‘payee of said notes that if the said amount found to be due “said district is less than aforesaid amount, it shall be “allowed and credited on said notes.” The writing was signed by the payee of the notes, the defendant in error, Metcalf, and was admitted in evidence. The cause was tried to a jury, and during the trial and after the evidence was all in, the court, over the objection of the defendant below, instructed the jury to return a verdict for $370.54, although special findings of fact were asked by defendant to be returned by the jury and certain instructions were requested and offered by him, all of which were refused by the court. All evidence offered on behalf of the defendant below showing or tending to show that Rastaetter had no interest in the property attached as the property of Bolln and Rastaetter, was excluded and such evidence as had been introduced to establish the fact was stricken out, although that question was at issue under the pleadings. I do not care to discuss the assignment of error involving the correctness of the ruling of the trial court upon the rejection*16 of this proffered testimony, as there is abundant reason for reversal without discussing this proposition. I have thus far given a brief outline of the pleadings and the proceedings of the court in order that my position can be readily understood, and will now give my reasons for dissenting:
1. It is clear and undisputed that the promissory notes sued upon were executed and delivered for the purpose of indemnifying Metcalf, the payee, from any loss that might accrue to him, and to him alone, as one of the sureties on the official bond of Rastaetter as treasurer of the school district. So Metcalf himself testifies and the notes were executed to him alone as payee and were made payable to his order. A question and answer appearing in the evidence will suffice to show that such was Metcalf’s understanding and that of his counsel in the trial court: “You “stated that you took the notes to indemnify you against ‘ ‘any loss that might arise from your being a surety on Ras-“taetter’s bond. Now state how much, if any, money you “had to pay as such surety?” To this question Metcalf replied: ‘ ‘Mr. Schlichter and myself, he being a surety “with me on Rastaetter’s bond, we paid five hundred and “forty-two dollars on a judgment rendered against us in the “court at the next term.” This scrap of evidence is all that appears in the record showing what amount was paid by Metcalf to satisfy the claim of the school district on the official bond of Rastaetter, upon which he was surety. The judgment referred to by the witness was rendered in the district court of Converse County in a suit brought for the use of the school district against Metcalf and Schlich-ter as sureties upon Rastaetter’s bond; and it was rendered Oct. 22, 1890, for the sum of $542.82 with interest thereon from June 3, 1890, at the rate of twelve pef cent, per annum, the actual amount of thé judgment being $567.97, with costs in an amount not taxed. The amount of this judgment therefore was not paid, but only $542.00 thereon. The evidence was wholly insufficient to show what Metcalf paid. He might have paid one half or one third, or any other proportion thereof, for aught that
2. The notes sued on were executed to secure the release of an attachment levied upon the interest of Ras-taetter in the former copartnership of Bolln and Rastaetter, and under the writ, the sheriff levied upon the entire stock of goods, in order to get possession of the interest of Rastaetter. It was to free his business that this levy or threatened levy by the sheriff armed with the writ, that the notes were executed. It makes little difference whether or not the levy was actually made, if it was threatened by the sheriff under a writ. Bolln did not make a settlement with Metcalf while proceedings were threatened, although requested to do so, and it is clear from the testimony that the sole inducement for indemnifying Metcalf was to obtain a release from the attachment. The sheriff testifies that the goods were levied upon under a valid writ of attachment. The deputy clerk of the court, the only officer apparently in charge of the office, testifies that he issued no writ of attachment in the cause and that no suit was commenced. He further states that the attorney for Metcalf desired to secure some advantage over other creditors and might commence suit in attachment against Rastaetter. He requested that the writ of attachment should be completed by the signature of the clerk and the seal of the court, so that he could use it. The deputy clerk says that he did not affix either his signature or the seal of the court to the writ, which was drawn up by the attorney, because no bond had been filed and no sureties given; that the suit was never commenced, that the
There was then a conflict of testimony upon this point of the commencement of the suit and the issuing of the attachment writ, and this matter should have been submitted to the jury, as the only possible consideration for the execution of the notes was the dismissal of the attachment suit to release the goods of Bolln, the maker of the notes from attachment with those of his former co-partner. No claim, however well founded, should be permitted to be enforced under the guise of a sham suit, and the process of the court should not be abused to secure the enforcement of a settlement of even an undisputed claim. However immaterial the informality of the proceedings were for attachment, there certainly was a question whether the suit was ever begun, and whether the defendant Bolln was coerced into executing the notes to prevent
3. But could either Metcalf or Schlichter, the sureties on the official bond, or both of them, have maintained an action in attachment against Rastaetter or his property? The petition filed in their suit is in the record, and so is the affidavit for attachment. These are verified by Metcalf. The former is a suit for money paid to the use of Ras-taetter, and discloses that the debt is due from the sureties, and the affidavit in attachment contains all, or nearly all of the statutory grounds in attachments brought in an ordinary civil action where the debt is due. Under such a state of facts as pleaded by Metcalf himself, there was ño right to attachment, for it plainly appears from these pleadings that neither he nor his co-surety had paid' the debt, and thereby stood in the shoes of the school district creditor, to whose rights by such payment they would be subrogated. The provisions of our code of civil procedure applicable to their position before payment of the debt, are embodied in Sec. 3050 of the Revised Statutes: “A surety may ‘ ‘maintain an action against his principal to compel him to “discharge the debt or liability for which the surety is
The obligation was executed January 3, 1889, and by its terms does not' cover past transactions. Without any allegation in the petition of the school district to the effect that Rastaetter held over beyond the expiration of his term, it would probably be assumed that the bond was given to cover only a portion of his term, from January 3,1889, until the succeeding month of May, when his term expired; yet the defalcations, or the larger part of them, charged in the petition occurred before the execution of the bond, and after the expiration of Rastaetter’s term. However, I do not express any opinion on this point, although it seems to be directly in issue upon the pleadings.
For the reasons given, I think the motion for a re-hearing should be granted.