71 So. 737 | Miss. | 1916
delivered the opinion of the court.
This is a suit brought by the Southwestern Company, a book publishing corporation of Nashville, Tenn., against T. J. Wynnegar on a letter of credit executed by T. J. Wynnegar and J. J. Taylor, as sureties guaranteeing the account of Paul Wynnegar for books, cash, etc., which the said Southwestern Company agreed to furnish and furnished to Paul Wynnegar.
The only question to be determined in this case is whether or not the sureties on the letter of credit sued on are released from liability thereon, because at the time the
¥e think this was error. ..In his brief counsel for appellee relies on the text, 32 Cyc. 66, section (IY), subsection (B), which is as follows:
“Knowledge of a prior default of the principal known to agents of the obligee at the time a .surety executed' a bond making himself liable therefor, will prevent an action being maintained thereon; but the general rule is that knowledge by a public agent of prior defaults of a public officer will not affect the liability of sureties on the bond of such officer, as a public agent has no authority to represent the state or county in such matters.”
The only case cited in support of the text is the case of Franklin Bank v. Cooper, 39 Me. 542; but that is a case wherein the principal at the time the bond was executed was an embezzler, and his acts of dishonesty were known to the officers of the bank and not to the surety.
This is a different case. The principal in this case, it is true, was insolvent and indebted to the Southwestern Company, but no inquiry was made with reference to whether or not he was so indebted by the sureties. This principal had committed no criminal offense and had been guilty of no act of dishonesty, and the Southwestern Company had reason to believe that the previous indebt
The granting of the peremptory instruction for the defendant was error.
Reversed and remanded.