58 S.W.2d 366 | Ky. Ct. App. | 1933
Reversing.
R.E. Culbertson leased from J. Boyd Stewart a dwelling house in Ashland for a period of one year at a monthly rental of $50, and agreed to give him a surety bond for the proper care of the property and payment of the rent. At that time Culbertson was the agent of the Central West Casualty Company, acting under a duly recorded power of attorney authorizing him to execute on behalf of the company as surety "any bond, undertaking or contract of suretyship, not to exceed the sum of Fifty Thousand Dollars ($50,000.00)." On June 1, 1929, and while the power of attorney was in full force and effect, Culbertson, as principal, and the Central West Casualty Company, as surety, by and through Culbertson, as attorney in fact, executed and delivered to Stewart a bond for $600, conditioned that Culbertson would pay the rent. Culbertson failed to pay the rent, and, when he vacated the premises, he was indebted to Stewart in the sum of $400.
Relying on the foregoing facts, Stewart brought this action against Culbertson and the casualty company to recover on the bond. Its demurrer to petition having been overruled, the casualty company filed a separate answer pleading, in substance, that Culbertson at the time of the execution of the bond had no actual authority from the company to sign its name as surety on any undertaking in which any private interest of Culbertson might be involved; that Culbertson well knew this fact, and did not report the execution of the bond to the casualty company in the usual course of business, or at all, and that no premium therefor was ever paid; that the company did not know of the undertaking until demand for payment was first made, and it then notified Stewart that Culbertson had acted without authority, and it did not consider itself liable by reason of the execution of the bond. Stewart's *139 demurrer to the answer having been sustained, and the company having declined to plead further, judgment was rendered in favor of Stewart for $400, with interest and costs. The company has prayed an appeal.
The ground on which the contract is assailed is that it is contrary to public policy. In a general way the public policy of a state is its attitude toward certain acts, transactions, and practices, as declared in its Constitution and statutes, and in its common law found in the opinions of its court of last resort. If the Constitution or statutes speak upon the subject, the policy of the state is necessarily fixed to that extent. Whatever they authorize or approve is sanctioned by public policy, and whatever they prohibit is against public policy. Gathright v. Byllesby Co.,
Here Stewart accepted the bond knowing that it was executed by Culbertson as principal, and on behalf of the casualty company as surety, for the purpose of securing the rent, which Culbertson agreed to pay. Authority to execute "any bond or undertaking" was not sufficiently broad or specific to bind the company on Culbertson's own debt. The facts pleaded in *141
the answer negative the theory of knowledge, acquiescence, or ratification. As Stewart accepted the bond knowing that the interest of Culbertson and those of the casualty company were necessarily antagonistic, he was charged with notice of Culbertson's want of authority to bind his principal by his acts. 21 R. C. L. p. 910; Langlois v. Gragnon,
Judgment reversed, and cause remanded for proceedings consistent with this opinion.