177 Ga. 648 | Ga. | 1933
The certified questions, when considered with the name and style of the case, indicate that the litigation concerns a default of a clerk and treasurer of the City of Monroe; and hence the questions should be answered in the light of any pertinent provision of the charter of that municipality. While in other questions will be found the terms, “insurer,” “fidelity company,” and “fidelity insurance,” the first question states that a fidelity company “bonded a city clerk” in the sum of $2000 for the year 1920 in consideration of a premium of $10, the bond not providing for any renewal thereof. The charter of the City of Monroe declares that “the mayor and council may provide for taking bond and security from” the clerk and treasurer. Ga. L. 1896, p. 212, § 15. The act of bonding the city clerk presumably comprehended the execution and delivery of a bond signed by the officer as prin
The facts that the agent of the fidelity company mailéd to the city clerk a bill for $10, and that this bill specified the number of the original bond, its amount, the amount of the premium due for the new year, and had at the bottom the words “Bead your policy,” and that the premium was thereafter remitted to the company and the bill was marked “paid,” did not amount to a writing signed by the fidelity company, and thus did not constitute a renewal of the bond, it not appearing that the bill so rendered was signed by the company or by any agent authorized to act for it. See Delaware
The full payment and acceptance of the premium for an additional year would not remove the subsequent transaction either from the rule of law that a bond must exist as an instrument in writing signed by the obligors, or from the operation of the statute of frauds. Such was the rule as to a sale of realty until the enactment as a part of the Code of the statement now contained in section 4634. Ga. L. 1853-4, p. 58; Civil Code (1910), § 3223; Black v. Black, 15 Ga. 446 (4); Franklin v. Matoa Gold Mining Co., 86 C. C. A. 145 (158 Fed. 941); Kentucky v. Hinson, 143 Ky. 428 (136 S. W. 912, L. R. A. 1917B, 139); Wood on Statute of Frauds (1884), 823, § 486. Where the law requires a contract to be in writing, a court of equity will enforce an agreement not so executed only where “the parties have so acted upon and by virtue of the contract as that it would be a fraud to permit the defendant to repudiate it.” Haisten v. Savannah, Griffin &c. R. Co., 51 Ga. 199; Simonton v. Liverpool &c. Ins. Co., supra; Brunswick Grocery Co. v. Lamar, 116 Ga. 1 (2), 6 (42 S. E. 366). The relief granted in such a case is allowed upon the principle of estoppel, and it is incumbent upon the complainant to show not only that
The mutuality required in a case of this sort is well illustrated by the decision in Kinderland v. Kirk, 131 Ga. 454 (2), 456 (62 S. E. 582), in which it was said: “The exception that partial payment of the purchase-price, accompanied by possession, is such part performance as will take a parol contract for the sale of land out of the statute of frauds rests upon the principle of equitable estoppel that the vendor has so dealt with the purchaser in receiving a part of the purchase-money, and putting him in actual possession of the land in part execution of the contract of sale, that it would be a fraud upon the vendor’s part to repudiate the contract and stop short of its complete execution. It is the acts of the vendor which raise the estoppel; it is the vendor’s receiving some part of the purchase price, and his consent, express or implied, to the complete and exclusive occupation of the land by the vendee. Where the vendor manifests his intention to withhold possession of the land by a positive assertion of his actual occupancy, and the vendee, with a purpose of enforcing his invalid parol contract, enters upon other portions of the land, it can not be urged that the forced pos
Upon this question, it is clearly apparent that any acceptance by the company related solely to what it regarded as an agreement embracing the continuation certificate, and it would not be a fraud upon the opposite party, such as could be relieved in equity, for the company to refuse to perform a different alleged agreement, with reference to which there was no acceptance by it. Even if it be true, as contended by counsel for the city, that the clerk and treasurer was not the agent of the municipality in the matter of renewing his own bond, but was to be treated as the agent of the fidelity company (cf. Lewis v. Gordon County, 70 Ga. 486, 496; White v. Duggan, 140 Mass. 18 (2 N. E. 110, 54 Am. R. 437); King County v. Ferry, 5 Wash. 536 (32 Pac. 538, 19 L. R. A. 500); Paxton v. State, 59 Neb. 460 (81 N. W. 383, 385, 80 Am. St. R. 689); Singer Mfg. Co. v. Freerks, 12 N. D. 595 (98 N. W. 705); Gritman v. U. S. Fidelity & Guaranty Co., 41 Wash. 77 (83 Pac. 6); San Antonio Brewing Asso. v. J. M. Abbott Oil Co. (Tex. Civ. App.), 129 S. W. 373; Cresap v. Furst, 141 Miss. 30 (105 So. 848); Times-Picayune Pub. Co. v. Frierson (Miss.), 144 So. 235; Maryland Casualty Co. v. Wellston, 47 Okla. 417 (148 Pac. 691); Thompson v. Citizens Bank & Trust Co., 222 Ky. 492 (1 S. W.
Counsel for the municipality invoke the principle that “when one of two innocent persons must suffer by the act of a third person, he who put it in the power of the third person to inflict the injury must bear the loss.” Civil Code (1910), § 4537. The facts do not justify an application of this principle. There was no reason for the company to anticipate injury to the municipality as a result of communications had solely with the clerk and treasurer. The only real authority of the clerk was to present the bill and the continuation certificate, and he was not clothed with apparent authority to do more. It certainly can not be claimed that he was other than a special agent for a particular purpose; and in such a case, “persons dealing with the agent should examine his authority.” Civil Code (1910), § 3595. If in concealing the certificate and delivering only the unsigned bill for the premium the clerk and treasurer attempted to renew an official bond without a writing signed by the party or parties to be charged, the law itself placed the city authorities on notice that this could not be done, and they
Furthermore, the municipality can not claim such innocence on its part as will entitle it to invoke the principle. It was charged, as a matter of law, with notice that the clerk and treasurer as agent of the fidelity company could not consummate a valid' contract in the nature of air official bond without a writing signed by the company. If the clerk sought to renew his bond in a manner not recognized by law, this irregularity alone was sufficient to put the mayor and council on inquiry and to affect them with constructive knowledge of every condition and circumstance which a proper inquiry would have disclosed, including the fact that the only contract actually proposed by the company was one which should embrace the terms of the continuation certificate. “Notice sufficient to excite attention and put a party on inquiry is notice of everything to which it is afterwards found such inquiry might have led. Igno
In Sroelowitz v. Schultz, 86 Ill. App. 341 (2), it was said: "Equity will not postpone the interest of one who has omitted no duty devolving on him to the interests of another whose negligence has made it possible for a loss to occur.” In Keeney v. Bank of Italy, 33 Cal. App. 515 (165 Pac. 735), it was held that “A bank having constructive notice that an account was impressed with a trust was not an innocent party, and could not invoke the doctrine that where one of two innocent parties must suffer he should suffer whose act contributed to the wrong.” In 21 C. J. 1129, it is said: "As a corollary to the proposition that the party setting up an estoppel must have acted in reliance upon the conduct or representations of the party sought to be estopped, it is as a general rule essential that the former should not only have been destitute of knowledge of the real facts as to the matter in controversy, but should have also been without convenient or ready means of acquiring such knowledge. One relying upon an estoppel must have exercised such reasonable diligence as the circumstances of the case require. If he conducts himself with a careless indifference to means of information reasonably at hand or ignores highly suspicious circumstances which should warn him of danger or loss, he can not invoke the doctrine of estoppel.”
Since the lack of authority in the city clerk to renew the bond in the manner claimed by the municipality was by construction of law within the knowledge of the governing authorities, the loss resulting from his conduct must rest where it falls, and can not be shifted to the fidelity company. The city is not in position to invoke the principle so ably and earnestly urged by its counsel. Hendry v. Cartwright, 14 N. M. 72 (2) (89 Pac. 309); Franklin Savings Bank v. International Trust Co., 215 Mass. 231 (102 N. E. 363); Quincy Mutual Fire Ins. Co. v. International Trust Co., 217 Mass. 68 (104 N. E. 845); Baker County v. Huntington, 46 Oregon, 275 (79 Pac. 187); Cutler v. Roberts, 7 Neb. 4, 13 (29 Am. R. 371, 376); Dair v. United States, 83 U. S. 1, 5 (21 L. ed. 493).
It is stated that the bill for the premium was accompanied by "a continuation certificate, expressly limiting the liability of the fidelity company to the amount of the original bond,” but the clerk in
Since the first question is answered in the negative, the Court of Appeals does not request instruction upon the second question. The rulings made in answer to the first question practically control the third question; and in reply to the third question it is held that the fidelity company would not be liable “for the defalcations of the clerk to the amount of the bond for each year;” but if renewals of the original bond were at all effectuated, the liability assumed thereby was limited, as stated in the continuation certificate, to the amount of the original bond.
It is contended by counsel for the municipality that the renewal of a bond or other liability contract from year to year would result in a new and distinct contract for each year, with a liability upon each renewal to the amount of the original bond, or, in other words, that the liability would increase annually by that amount. Although there are decisions to the contrary, the weight of authority appears to support the view as thus stated, where the original bond contained no provision as to renewal, and renewals thereafter effectuated were not accompanied by stipulations limiting the liability to the original amount. Cf. Maryland Casualty Co. v. First National Bank, 246 Fed. 892; Ætna Casualty &c. Co. v. Commercial State Bank, 13 Fed. (2d) 47; Proctor Coal Co. v. U. S. Fidelity & Guaranty Co., 124 Fed. 424; De Jernette v. Fidelity Co., 98 Ky. 558 (33 S. W. 828); Fourth Bank & Trust Co. v. Fidelity & Deposit Co., 153 Tenn. 176 (281 S. W. 785), and cit. See also John Church Co. v. Ætna Indemnity Co., 13 Ga. App. 826 (80 S. E. 1093); Chatham Real Estate &c. Co. v. U. S. Fidelity
The fourth question is subdivided into several distinct interrogations, the first of which is as follows: '“Is it essential to the validity of a contract of fidelity insurance in Georgia that the same be, in writing ?” At common-law it was not required that any contract of insurance should be in writing in order to be valid. The common-law rule prevails in most if not all of the States of the Union except the State of Georgia. Meriwether v. Metropolitan Life Ins. Co., 44 Ga. App. 596 (162 S. E. 421); Newark Fire Ins. Co. v. Smith, 176 Ga. 91 (167 S. E. 79). In this State it was long ago declared by statute that policies of life and fire insurance should be in writing in order to be valid. Civil Code (1910), §§ 2470, 2499. It does not follow from these statutes, however, that a policy of fidelity insurance must be in writing. Nor is such a contract to be classed as an undertaking of guaranty or suretyship, and it thus is not a promise to answer for the debt, default, or miscarriage of another within the meaning of the statute of frauds. Maddox v. Pierce, 74 Ga. 838; Everly v. Equitable Surety Co., — Ind. App. (127 N. E. 616); Pearson v. U. S. Fidelity &c. Co.,
But there are other statutes from which it appears that a policy of fidelity insurance must be in writing in this State. The Code of 1910, as adopted by the legislature on August 15 of that year, contains a compilation of statutes in a subdivision which is styled “Article 4, Chapter 2, Second Title.” This article begins with section 2388, and continues with other sections providing the manner of incorporating insurance companies. All of the other sections to which reference will be made in this connection are also contained in article 4. Section 2404 is in part as follows: “Contracts of insurance to be entered into by any company organized under this article shall not be binding unless evidenced by a policy of insurance in writing or print, or both, and the liability of said company, in case of loss sustained by any policyholder, shall be governed by the terms, stipulations, and conditions appearing upon the face of the policy.” These provisions apply to an insurance company of any character which is organized under article 4. Sections 2550-2562 inclusive expressly recognize fidelity insurance companies; and if such a compony is organized under the laws of this State, the organization must be accomplished as provided in article 4. See sections 2388, 2389, 2390. It follows that if a fidelity insurance business is carried on by a domestic company, its policies must be in writing as required by section 2404. If the insurer involved in this case is not a domestic company but was chartered by the laws of some other State, does the same rule apply ? Sections 2414 and 2415 provide for the licensing of insurance companies, and are applicable to insurance companies “chartered by this State or other State or foreign government.” By section 2462 it is provided that •“any fidelity-insurance company incorporated and organized under the laws of any other State of the United States, or foreign governments, and which has a paid-up capital of not less than two hundred and fifty thousand dollars, may be licensed to transact business in this State upon compliance with all the requirements
But an additional query in the fourth question was as follows: “Can a written contract of fidelity insurance, which provides for no renewal thereof, be renewed from year to year by the presentation by the obligor of an invoice, or bill for the premium due (which specifies the number of the original policy, its amount, the amount of the premium due for the next j^ear, and which con% tains this expression on the bottom thereof: ‘Bead your policy’), and the payment of the premium by the obligee in the fidelity bond to the obligor therein, such invoice being marked paid?” This question is answered in the negative. “Under our statute it is contemplated that the whole contract of insurance shall be in writing, and that it shall be signed by the insurer.” Delaware Ins. Co. v. Pennsylvania Ins. Co., supra. A suit can not be maintained upon a parol renewal of an insurance policy. Roberts v. Germania Fire Ins. Co., 71 Ga. 478. The rule that a policy of insurance shall be in writing and signed by the insurer applies to contracts issued upon a cash basis as well as to those issued upon a credit basis, if such there may be. Therefore the facts stated in the question as just quoted would not amount to a renewal of the original policy. Nor would the insurer be estopped to deny the invalidity of an alleged renewal based upon such facts. What is said in the first division of this opinion should be considered in connection with this question. If a given state of facts would be insufficient to constitute a renewal for a single year, a repetition of such facts from
The final interrogation stated as a part of question 4 does not require answer, in view of the rulings in answer to other questions.
Something has been said by counsel as to whether the company should be liable for a return of the premiums, and to this extent only. The Court of Appeals did not request instruction upon these questions, and nothing said in the above decision is intended as a ruling thereon.