63 W. Va. 189 | W. Va. | 1907
In the chancery suit of S. B. Baker v. D. R. Tappan in the circuit court of Wood county, J. Herndon Abbott was appointed as a special receiver to take charge of the Jackson Hotel in Parkersburg and continue the hotel business of the partnership of Baker and Tappan by running the business of the hotel. The suit was to settle the accounts of the partnership which had been formed between Baker and Tappan for the carrying on of the hotel business. The court required of Abbott a bond as special receiver, and Abbott gave a bond in which Citizens Trust and Guaranty Company of West Virginia was surety, in which the condition, after reciting that Abbott had been appointed special receiver to take possession of and manage the property of the firm of Baker and Tappan known as the Jackson Hotel, was that “if the said J. Herndon Abbott shall well, truly and faithfully discharge the duties aforesaid as set forth in said decree and pay over all monies that may come to his hands by virtue thereof as the court shall direct, then this obligation to be void otherwise to remain in full force and virtue.” Later a decree in the case referred it to a commissioner in chancery with directions to state an account showing the property of the partnership and its debts. Later a decree ordered J. Hern-don Abbott as special receiver to make a full and complete settlement of his account as such before a commissioner to whom the cause had been referred. The commissioner was directed to settle such accounts of the receiver and make a full and complete statement of all the acts of said receiver connected with said hotel Jackson, after notice to Abbott, which, was given him. The commissioner made a settlement of the accounts of the said special receiver, and upon it a decree was made, by which it was adjudged, ordered and decreed that exceptions of J. Herndon Abbott be overruled, and it was found and .decreed'that there was in the hands of said receiver a “balance” of $6,659.57, and it was decreed that he was chargeable with that sum as receiver, and it was “further adjudged, ordered and decreed that the said J. Herndon Abbott, special receiver, do pay the said sum of $6,659.57,
On trial of the case, the-Trust Company offered oral evidence to show that Abbott had complied with the conditions of the decree appointing him, and properly discharged his duty, and to show that the report of the commissioner of the settlement of the accounts of Abbott as special receiver was erroneous, and to enter into the said accounts and open up the same before the jury, and to show that the hotel had been conducted properly, and that the receiver had accounted for all money which came into his hands; in other words, the Trust Company proposed to make full defense so as to show that there was no liability against the receiver, and nothing due from him, as fully as could have been done in the chancery cause, and thus open up again the question of his liability. Say that such was the purpose of the questions; but in fact the expected answers do not appear. It does not appear what was proposed to be proven. The court refused to receive such defense, being of the opinion that the decree requiring Abbott to pay said sum to Beard was final and conclusive upon the surety in the receiver’s bond. In the case of State v. Nutter, 44 W. Va. 385, we discuss the matter of the effect, whether only prima faoie or conclusive, of a judgment against a principal as to the sureties. We there said that if the bond binds its makers to abide the result of certain litigation or to satisfy any judgment therein, a judgment against the principal is conclusive upon the sureties, so that they cannot contest that judgment, or reopen the question of liability. We there said that upon bonds merely stipulating for a faithful discharge of duty, a judgment against
“Three distinct views are maintained upon the question of the effect to be given to a judgment against the principal in establishing a liability against the surety.
(a) That such judgment is not admissible against the surety.
(b) That a judgment against the principal is prima facie evidence agaist the surety.
(c) That such judgment is conclusive against the surety.
The first of these positions is supported by the somewhat plausible argument that an official bond is different in its terms from a bond of indemnity against a failure to perform a specific act, such as a bond that a principal will pay a certain sum of money or satisfy a judgment. A finding against the principal on default of either of these conditions might well be considered prima facie evidence against the surety, or even conclusive, since the surety agreed that the principal would do the particular things of which he has been adjudged in default.” He then shows that as to official bonds in which the sureties merely stipulate that the principal will perform his duties the authorities conflict, some holding that the judgment against the principal is not only evidence against the sureties prima facie, but conclusive, while others hold that it is simply prima facie evidence of liability. Eminent authorities hold, even on bonds for mere faithful discharge of duty, such judgment conclusive, as in Stoval v. Banks, 10 Wall.
Counsel for the Trust Company cite us the case of Thompson v. McGregor, 81 N. Y. 519. That case was a receiver’s bond stipulating only for faithful discharge of duty.' The court held the judgment only prima facie; but the opinion distinctly says that it is clear law that where “besides the general covenant to faithfully execute the trust, there is also the special agreement to obey all orders of the surrogate. That the rule in these cases which makes the adjudication against the principal conclusive on the surety, is always based upon the special covenant which in terms submits the latter to the judgment or order of the court, indicates very plainly that the general words were not deemed sufficient, in and of themselves, to effect that result.” The opinion concedes that on such a bond as we have the judgment is conclusive. It is strong authority for the position we take. I call attention to the fact that in Abbott’s bond there are both covenants. In that case numerous New York cases are cited to sustain our holding. The case of Kirker v. Owning, 98 Fed. R. 499, cited by counsel, is notin point. It only holds that in a case where the receiver is appointed the court cannot enter a summary decree against the sureties, but that they are entitled to a hearing on their bond in a law action. It does not touch the effect of a judgment against the principal. The same may be said of Thurmond v. Morgan, 79 Va. 367. The .argument and cases cited by counsel for the Trust Company are strong and apposite in cases of ordinary official bonds with conditions only to faithfully discharge duty; they relate to bonds of that kind; but as applied to a bond of the description involved in this case, they are inapplicable.
We must therefore affirm the judgment.
Affirmed.