1. As stаted, Norbo has filed in support of its own motion for summary judgment and in opposition to that of the opposing parties, an affidavit signed by Emil Tucker the language of which, with paragraph numbers eliminated, is identical with the allegations of the petition. Resolute Insurance Company, on the other hand, in addition to Charles Leick’s affidavit attached to its motion, took various interrogatories and the depositions of some 30 parties primarily concerned in the pertinent transactions. The Norbo document, considered as a petition, states a cause of action.
Norbo Trading Corp. v. Resolute Ins. Co.,
There is in fact some doubt as to whether the Tucker affidavit should be considered at all. As stated in
Crutcher v. Crawford Land Co.,
(a) Tucker’s general statement in the pleadings as copied in the affidavit that Norbo Trading Corp. was not in default when the consent order of May 14 was signed is conclusively disproved by depositions of the following creditors or their officers which establish: (Myron Doty, Chief, Disposal Branch, U. S. Maritime Administration) delivery was not taken on any of the four ships at the time specified in the contracts, as a result of which demurrage charges piled up which had to be paid by Resolute on June 17, 1965, and represented a loss on the bonds, and the U. S. Maritime Administration notified the bonding company prior to the takeover that it wаs looking to the bonds for payment; (McGowan, Executive Secretary, Savannah District Authority) Norbo was in default in rental payments in March, April and May, 1965; (Williams, President, Gulf Atlantic Towing Co.) Norbo owed $16,725.86 for towing charges, part of which was recovered in February, 1965, by an attachment proceeding: (Spencer, General Manager, Atlantic Towing Co.) $2,700 was owing on towing charges for which this company was forced to file suit; (W. A. Porter, President, Porter Trucking Co., Porter Equip. Rental, Porter-PIuggins, Inc.) operations of these compaines in preparing the shipyard for the use cost these companies a loss of $24,550.44 in unpaid contractual obligations between February 1 and May 14, 1965, and while some other bills were paid, all were paid late; (P. E. Clifton, President, Kay C. Co.) Norbо and its subsidiary American Salvage during this period made late payments, paid with bad checks, and ultimately defaulted in the sum of $5,460; (Gignilliat, Savannah Electric & Power Co.) Norbo defaulted on electric bills in the amount of $470.89; (Davis, Southern Bell Tel. & Tel. Co.) Norbo defaulted in the sum of $1,468.26 on telephone bills; (Henkel, Manger Hotel, Savannah) between February and May, 1965, Norbo incurred a $1,684 debt for hotеl bills which was never paid; (Mears, Atlantic Coast Line R. Co.) between April 23 and May 11, $2,937.33 worth of freight bills were in default; (Nussbaum & Bell, Savannah Bank & *743 Trust Co.) the payroll account in this bank, which was in the name of American Salvage Company, was closed by the bank on May 11, 1965, because of overdrafts dating back to March 15, as well as a long list of checks returned for insufficient funds, running from small amounts for payroll to $52,000 to Bergen as trustee for Resolute. There were other creditors’ depositions in the same vein. Tucker, in the depositions taken by the defendants, denied some of the statements but in general said he “did not recall” how much was owing. His own statements in large measure supported the proposition that Norbo and American Salvage were in default on substantially all their contraсtual obligations, that most payroll checks issued for the two weeks prior to the consent order had been returned marked insufficient funds, and that the Norbo account in the Meadow-brook National Bank in New York had only about $3,000'. The payroll account alone was running between $6,000 and $9,000 per week. The evidence in the mass of interrogatories, depositions and affidаvits demands a finding that agreements with the bonding company were in default; that contract dates for delivery of scrap iron had been breached resulting in an agreement by Nissho American Trading Corp. to continue to accept salvaged scrap iron only at a reduced price, which agreement was made without notice to Resolute and which increased its risk on the total enterprise and that the corporation was in default in payment of labor, material, supplies and rent, all of which impeded the completion of its contracts.
(b) Some of the more serious allegations of the petition and affidavit were to the effect that the defendants Wohlmuth, Leick, Resolute and Bergen as trustee for Resolute in managing the salvaging activities of Southeastern Ship Salvage Corp. after the issuance of the consent order conspired together and did in fact move the fourth ship, John S. Milledge and proceed with dismantling operations on it without authority, it being contended that the power of attorney conveyed to Wohlmuth concerned only the first three ships. In holding that the Norbo pеtition stated a claim this court said: “The petition does not show on its face that the handling of the fourth ship purchased by plaintiff was included in the power of attorney shown in the
*744
petition.”
Norbo Trading Corp. v. Resolute Ins. Co.,
(c) The same is true regarding the conspiracy allegations that the defendants transferred money оut of and refused to deposit money in the Savannah Bank & Trust Company account for the purpose of preventing rent and payroll from being paid so that the Norbo operation could be closed down. On the contrary, it appears that Case Press advanced $80,000 of which $34,000 was used to pay the Maritime Commission for the S.S. Milledge, and the balance of which was dеposited in Meadow-brook National Bank in New Jersey. At this time, following an agreement entered into on March 24 under which Bergen’s trustee account for Resolute had been opened in Savannah subsequently to discovery that excess materials not involved in the two major contracts were disappearing or being sold and that the proceeds were not aсcounted for, the transfer of the supposedly remaining $46,000 to Savannah failed because Tucker had given his New York attorney, Friedman, a note and check for $15,000 for legal services; the check was returned marked insufficient funds and Friedman then placed the note for collection in the Meadowbrook National Bank, received the $15,000, and this caused the cheсk to the Savannah bank to be returned for insufficient funds. After more incidents of the same kind Bergen, as trustee, received a part of the money and Friedman relinquished $10,000 of the $15,000 which was deposited to the *746 new account under Wohlmuth’s direction. Friedman, the New York attorney for Tucker and Norbo, and Spence Grayson, the Savannah attorney for American Salvage who was also looking after Norbo’s interest, testified that no commitments were made to place this money in the Norbo rather than the trustee account, or that the defendants would commit new funds to the enterprise which would increase their own considerable liabilities at this point. In the meantime, the Savannah Bank & Trust Company closed out the American Salvage Company account which was under the control of Tucker on May 7 following the return of 16 checks for insufficient funds on April 14, 12 on the- 21st, 18 on the 22nd, 4 on the 23rd, 8 on the 26th, 5 on the 28th, 7 on the 29th, 38 on May 4, 15 on May 10 and 49 on May 11 prior to the consent decree of May 14. Sorrentino, the president of American Salvage Company and apparently the only person primarily involved in Tucker’s organization with experience and standing in the ship salvaging business, had withdrawn in March following his discovery of numerous irregularities and bad business practices. Disregarding for the moment the depositions of the defendants, disinterested employees, creditors, banking officials, and the Maritime Commission officials, the depositions of Tucker’s own attorneys in New York and Savannah and his partner Sorrentino are replete with factual material all of which was known to Norbo at the time the motions for summary judgment were filed and none of which is contradicted therein. Depositions and exhibits of all bank accounts involved in these transactions conclusively account for all money received and show its withdrawal for proper purposes. It is therefore obvious that the allеgations and general statements in the affidavit of Tucker that the defendants acted wilfully and in bad faith for the purpose of causing the Norbo enterprise to fail are entirely without evidentiary foundation.
2. An agreement giving a surety the right to protect its interests by taking over its principal’s obligations is not a violation of law or contrary to public policy, and the basic issue is whether the acts of the surety under these circumstances are in good faith for the protection of its interests. Seaboard Surety Co. v. Dale Construction Co., 230 F2d 625. A conspiracy is a
*747
combination either to accomplish an unlawful end or to accomplish a lawful end by unlawful and tortious means.
Oxford Chemical Corf. v. Detrex Chemical Industries,
3. There remain the allegations of Paragraph 17 that Wohl
*748
muth converted $13,000 of plaintiff’s money to his own use, construed in
Norbo Trading Corp. v. Resolute Ins. Co.,
The petition as a whole and the affidavit as a duplication of the petition basically contend that Norbo’s bonding company and certain individuals consipred together to force it to breach its various contracts so that they could take over the business and thereby make a profit. These allegations are totally unsubstantiated by factual proof. On the contrary, these defendants, acting under a power of attorney voluntarily given and a decree of the court based on the voluntary consent of the parties made a good-faith effort to salvage the enterprise.
When it eventually became evident that further efforts to salvage the ships would only increase the bond liability of Resolute Insurance Company, the mortgagee lenders and the surety company brought the foreclosure proceedings in a proper exercise of their legal rights as shown by the fact that Norbo Trading Corp. unsuccessfully contested the proceedings in a court action.
The trial court erred in denying the motions for summary judgment.
Judgments reversed.