Case Name: Lucille F. Parsons and J. Lester Parsons, her husband, Plaintiffs in Error, vs. Federal Realty Corporation, a Florida corporation, and National Surety Company, a New York corporation authorized to do business in the State of Florida, Defendants in Error
Court: Florida Supreme Court
Jurisdiction: Florida
Decision Date: 1931-12-15
Citations: 105 Fla. 105
Docket Number: 
Parties: Lucille F. Parsons and J. Lester Parsons, her husband, Plaintiffs in Error, vs. Federal Realty Corporation, a Florida corporation, and National Surety Company, a New York corporation authorized to do business in the State of Florida, Defendants in Error.
Judges: 
Reporter: Florida Reports
Volume: 105
Pages: 105–135

Head Matter:
Lucille F. Parsons and J. Lester Parsons, her husband, Plaintiffs in Error, vs. Federal Realty Corporation, a Florida corporation, and National Surety Company, a New York corporation authorized to do business in the State of Florida, Defendants in Error.
143 So. 912.
En Banc.
Opinion filed December 15, 1931.
Petition for rehearing granted February 2, 1932.
Opinion Reh.eari.ng filed September 29, 1932.
William Otis Badger (N.Y.) Kurtz & Reed and Loftin, Stokes <& Calkins, for Plaintiffs in Error.
Knight, Adair, Cooper <& Osborne and Evans <& Mershon, for Defendants in Error.

Opinion:
Davis, J.
Upon the trial of an action at law before the Circuit Judge sitting without a jury, a jury trial having been waived, a g'eneral verdict in favor of the defendant, National Surety Company, was found in an action against such company on a bond alleged to have been executed by it to secure the payment of $100,000.00 by the Federal Realty Corporation to plaintiffs in erro'r, who were the obligees named in the bond.
The bond sued on recites that it is made by the Federal Realty Corporation, as principal, and by the National Surety Company, as surety. It was not one of the regular printed form bonds prepared by the Surety Company and turned over to its agents for execution in its behalf, but appears to be a bond of an unusual and special character which was prepared by the attorney for the obligees to be executed by the Surety Company to meet the requirements of the particular transaction in which the bond was to be given. For the Surety Company it is signed, "National Surety Company, by D. W. Raie, Attorney in Fact." The National Surety CoUipany's seal appears to be attached. The issue which was raised by the pleadings, and upon which the verdict for defendants was entered by the Circuit Judge at the trial, is whether or not the bond sued on by the plaintiffs is such a bond as made the defendant National Surety Company liable thereon as a surety under the facts and circumstances of this particular case as disclosed by the pleadings and the evidence.
On this point there were special findings by the Circuit Judge in addition to the general verdict. These special findings, while only pertinent to be considered as indicating the pro'cess of reasoning followed by the Circuit Judge in reaching his general verdict, are to the effect that it had not been made to appear from the evidence that the agent, Raie, had authority to execute and deliver the bond in question; further, that if, notwithstanding this fact, it should he contended that the bond ought to be upheld because the agent, Raie, had apparent authority to execute the bond sued on, and thereby to bind the Surety Company in the interest of an innocent third party, that nevertheless the court had found on that point that the circumstances shown to have surrounded the negotiations for the bond, as well as its execution and delivery, were such as put the plaintiffs, and those acting for the plaintiffs, upon inquiry as to the nature and extent of the agent's actual authority which did not authorize such an undertaking to be signed by him.
After the verdict was rendered, plaintiffs moved for a new trial. Such motion for a new trial containing, as it does, appropriate grounds for that purpose, brings up fdr review the sufficiency of the evidence to sustain the findings of the judge. Such is the case in a common law action, when a jury has been waived. Alley v. Ball, 102 Fla. 1034, 136 Sou. Rep. 706.
It appears from the evidence that a real estate boom syndicate composed of M. R. Gano, o'f Philadelphia, and others, in August, 1925, through a sales agent, agreed to purchase the winter home of Mr. and Mrs. J. Lester Parsons, who were the plaintiffs in the Court below; that the agreed purchase price was $250,000.00,—$7,500.00 cash being paid down, $67,500.00 paid on closing the trade and the balance of $175,000.00 to be represented by a purchase money mortgage; that before the sale was completed Gano and associates (following the custom of boom transactions of this character) resold the property to' Federal Realty Corporation for $307,000.00, out of which transaction Gano, and associates, expected to make a profit of $45,-000.00.
In carrying out the latter transaction Gano wished the deed from the Parsons to be made direct to Federal Bealty Corporation. This Mrs. Parsons refused to do, stating that it was her property and that she would not convey it to Federal Bealty Corporation without obtaining a surety bond, in addition to' the mortgage which was proposed to be made on the premises to secure the balance .of the purchase price. The title to the property was in Mrs. Parsons' name and she remained firm in her determination not to convey the property except upon the conditions which she had elected to exact.
Mrs. Parsons had come to' Florida in connection with the sale and arrived about the last Monday in September. Her husband, J. Lester Parsons, was a man of wide experience, who had been in the fire insurance business for over twenty-five years, and was then the President of two fire insurance companies. Mr. Parsons did not come to Florida at the time of the closing o'f .the sale, but Mrs. Parsons at that time had the services and advice of one Henry J. Wyatt, of New York City, an attorney associated with the Parsons insurance companies, who undertook to represent Mr. and Mrs. Parsons in connection with the deal. Mr. Wyatt was the individual who' finally closed the entire transaction for Mr. and Mrs. Parsons after the departure of Mrs. Parsons for New York.
It appears that Mrs. Parsons, Mr. Wyatt, Mr. Gano, and a Mr. Beed, of the law firm of Kurtz & Beed, which law firm represented Mr. and Mrs. Parsons in Miami, met at the office of Kurtz & Beed to discuss and arrange for the closing of the sale and the delivery of deeds. Such meeting appears to' have been held shortly after Mrs. Parsons' arrival in Miami. At this conference various conversations were had with reference to obtaining the character of bond insisted on by Mrs. Parsons, which was to secure the pay ment of the first two notes of Federal Realty Corporation mortgage.
It appears to' have been understood from the start that a bond of the kind Mrs. Parsons wanted was unusual in character and that no ordinary agent of a surety company was authorized to write such a bond. This is indicated by the testimony of a man named Vanderpool, who appears to have represented two or three companies and who' stated that he did not want to undertake to write the bond because it was not a customary bond and was out of the regular course.
This led to a solicitation of one Donald W. Raie, a general agent o'f the National Surety Company, to undertake the task of procuring such a bond to be executed by that company. Raie, it appears, lived at Fort Lauderdale, and was authorized to act as a general agent, but with limited authority, for the National Surety Company in Dade, Palm Beach and Broward Counties. Raie appears to have also held certain powers of attorney to' execute instruments for the National Surety Company, as well as an appointment as agent under an agency agreement which contained rather broad powers, but which did not authorize him to execute bonds of any kind in excess of $50,000.00 without referring them to the home office o'f the surety company for specific authorization.
It appears that when first spoken to with reference to executing the kind of bond Mrs. Parsons wanted, that Raie then stated to those present that he did not have authority to execute such a bond without securing the written consent of the National Surety Company, and that it would also be necessary to have an application signed, as well as an indemnity agreement from the individuals who desired to have the bond, so that all of these papers could be sent to the home office of the National Surety Company in New York for approval. These papers were accordingly pre pared and appear to have been sent to New York by Raie.
But on Monday, October 5, 1925, Raie was called and told that it was essential that the bond be signed immediately, otherwise that the sale would not go through. At this time Raie was expecting a wire from the company approving the transaction and had given directions that if such a wire was received it should be sent to him in Miami. No such wire arrived and finally realizing that the only chance of writing the bond would be lost by the rescission of the trade and the departure of Mrs. Parsons for New York, Raie appears to have taken the chance of executing the bond on behalf of his principal, National Surety Company, knowing that he had not obtained the requested authority so to do, but believing that the application and other papers for it, which he had previously sent in, would be approved in due course by the surety company and thereby validate all that had been done.
But the Surety Company did not approve, and expressed its unwillingness to' approve under any circumstances, unless the local agent could secure full liquid collateral. This disapproval was communicated to the agent about October 9, 1925, which was after the bond had already been executed without authority and delivered to the obligee on October 5th.
Subsequent to this, it appears that the National Surety Company's officers in New Yo'rk took prompt steps to advise Mrs. Parsons and her husband that the bond had been executed without authority by Raie, their local agent at Port Lauderdale, and that they would resist all efforts to enforce any liability upon it. The Circuit Judge found, and we think properly so, that the National Surety Company promptly denied liability and notified the plaintiffs to that effect, although it was some two months or more after the bond was actually executed that the higher officers of the National Surety Company took this action. The reason for this delay is satisfactorily accounted for by the finding of the court that the defendant National Surety Company was not informed of the actual execution and delivery of the bond until more than two months had expired and that it acted promptly upon receipt of that information.
In disposing of the case we shall first consider the proper construction to be placed upon our statutes relating to surety companies' agents in this State.. We do this because, if the contentions of the plaintiffs in error with regard to the construction of this statute are correct, then the statute itself fixes the liability of the Surety Company by the fact that the bond in truth actually signed and delivered by its agent, whether with authority so to do or not.
The statute relied on to have this effect (Section 6307 C. G. L., 4345 R. G. S.), reads as follows:
"AGENTS.—Every person who shall so far represent any surety company established in any other State as to receive or transmit applications for suretyship, or to receive for delivery bonds founded on application forwarded from this State, or otherwise to procure suretyship to be effected by such company upon the bonds of persons or corporations in this State, or upon bonds given -to persons or corporations in this State, shall be deemed as acting as agent for said Company. (Chapter 3596, Acts of 1885, Sec. 5)."
Such statute has never before been considered, or construed, by this court, but a similar Florida statute relating to agent of insurance companies (Section 2765, Gen. Stats. 1906, now 6207 C. G. L. 1927, 4256 R. G. S. 1920) has been before the Supreme Court of the United States and was construed by that Court in Mutual Life Ins. Co. v. Hilton-Green, 241 U. S. 613, 60 L. Ed. 1202, 36 Sup. Ct. Rep. 676. The insurance agents statute was also recently considered by the Circuit Court of Appeals for the 5th Circuit in Pacific Mutual Life Ins. Co. of Cal. v. Barton, 50 Fed. (2nd) 362.
In both of the cases last mentioned, the Court said that the Florida statute relating to agents of insurance companies, Section 6207 C. G. L. supra, which undertakes to designate as .agents certain persons who in fact act for such companies in some particular, does not fix the scope of their authority as between the company and third persons, and certainly does not raise special agents, with limited authority, into general agents possessing unlimited power to bind the insurance company.
But the contention of the plaintiffs in error here is, that under the surety company agents statute (Section 6207 C. G. L.) when a surety company creates a general agent and authorizes him to receive or transmit applications for suretyship, or to' receive for delivery bonds grounded on applications forwarded from this State, or otherwise to procure suretyship to be effected by such company upon bonds of persons or corporations in this State, that such surety company is to' be deemed responsible for anything that the agent may actually do in executing a contract of suretyship, whether conventionally authorized thereunto or not, and regardless of any limitations on the agent's authority, and notwithstanding notice of limitations on the agency which, under the circumstances of a particular case, may be-imputed to the particular party dealing with an agent.
Or, to express it another way, plaintiffs in error contend that by force and effect of the statute alone, there is a presumption of law that the agent coming within the terms of the statute, had authority to do the things he actually did in fact do, and that this presumption being one of law, is, by reason of the legal effect of the statute under which the agent was authorized to act and acted, an irrebuttable presumption, which neither admits of rebutting the fact of agency, nor the extent of authority authorized to be exercised by the agent.
But it is obvious from a comparison of the Florida statute relating to agents for surety companies (Section 6307, C. G. L., 4345 R. G. S.) with the similar Florida statute relating to agents of insurance companies (Section 6207, 6222, C. G. L., 4256 R. G. S.) that both have a similar purpose in view, and should therefore receive a similar construction when their true meaning and legal effect is necessary to be decided in the course of a judicial proceeding involving a claim of liability against a company with regard to undertakings of the company alleged to have been entered into in this state through a statutory agent. See Lumber Co. vs. National Surety Company, 124 Iowa, 599, 100 N. W. 550.
Our statute relating to agents of insurance companies was construed and applied by this Court in American Fire Insurance Co. vs. King Lumber and Mfg. Co. 74 Fla. 130, 77 Sou. Rep. 168, and the holding of that case was approved by the Supreme Court of the United States in 250 U. S. 2, 63 L. Ed. 810, 39 Sup. Ct. Rep. 431. In that case this Court held that where tire insurance was procured on property in Florida by a broker who was a resident of this state, that the broker, who acted for the insurance company in obtaining information as to the subject insured, or who delivered the policy and collected the premium therefor, was, under the terms of the Florida statute above referred to, to be deemed, to all intents and purposes, an agent or representative of such insurance company in this state, regardless of conventional authority in the premises.
But the decision in that case did not hold that the effect of the Florida statute was to confer on the agent unlimited authority ex proprio vigore to bind the insurer so as to forbid inquiry into the facts as to the agent's actual authority in proper cases, and upon the theory that such was the proper construction of the statute, the validity of the act was upheld by the Supreme Court of the United States as against a claim by the insurance company that it was violative of Section 1 of the Fourteenth Amendment to the Federal Constitution, because it created an irrebuttable presumption which had the effect of depriving it of its property without due process of law.
The statute relating to the agents of surety companies, as well as the statute relating to the agents of insurance companies, does appear to declare an irrebuttable presumption of law, but such a presumption as to the fact or status of agency only, on the part of the person who acts under the statutory particulars. It does not undertake to' conclusively fix the scope and extent of the authority of agents as between the company and third persons. This appears to be the view of the Supreme Court of the United States as expressed in the Hilton-Green case, supra, with regard to insurance agents, and in that conclusion we are inclined to concur by placing the same construction on oUr statute controlling surety company agency.
But statutes of this character having for their object the regulation of the business of insurance and suretyship for hire when transacted through agents licensed by the State to act for the companies in soliciting business for them, do have the effect of imputing liability to the company on bonds executed by agents having apparent authority to execute and deliver them, even if they are not conventionally or in fact authorized to execute such bonds as they in fact execute under such apparent authority.
Under a statute o'f the kind just referred to, the status of agency being irrebuttable when the statutory particulars of agency are present, apparent authority is equal to real authority when the agent's limitations are not made known, and liability of the company on particular undertakings executed by the agent under his apparent authority to execute them, will depend upon the facts and circumstances of the particular case. Pacific Mutual Life Ins. Co. of Cal. v. Barton, 50 Fed. (2nd) 362 (C. C. A. 5th Cir.); Champenois & Blank v. Donald Co., 153 Miss. 719, 121 South. Rep. 485.
And where a state license has been applied for by a surety company, naming a particular person as its agent, with no restrictions on the agency stated in the application, a power of attorney restricting the authority of agent is ineffectual against one dealing with the agent without notice or knowledge of the restrictions. Sun Ins. Office, etc. v. Mitchell, 186 Ala. 420, 65 Sou. Rep. 143.
Persons intrusted with blank bonds, undertakings and seals by a surety company, having access to the surety company's official seal and authorized to negotiate and write bonds and undertakings for it, accept and reject risks, attach seals thereto, etc., are properly held to be general agents of the surety company to execute and issue bonds on its behalf. Corklite Co. v. Rell Realty Corp., 249 N. Y. (Court of Appeals) 1, 162 N. E. 565.
And an agent authorized to sign the name of his principal may effectually bind him simply by affixing to the instrument the name of his principal, as if it were his personal act, the particular form of the execution not being material when done in the name of the principal, and by tíne having authority in fact to execute the instrument. Independence Indemnity Co. v. Grants Pass and Josephine Bank, 29 Fed. (2nd) 83, C. C. A. 9th Circuit.
Accordingly it has been held that, where the body of a bond sets forth that the surety therein is an authorized surety company doing business in a State, and the signature to such bond is that of the surety company's authorized agent Timing authority to execute surety bonds of that general class, although the signature as signed to the bond does not indicate that the agent in signing the bond was signing it in the particular instance as agent of the surety company, and when such bond appears to have been delivered by the agent as the bond of such surety company, whether it was so delivered or not, the company will be estopped from denying the agent's authority to deliver the bond, ob that the signature' thereto is not such as to bind the company, where a State statute provides that every person who shall so far represent any surety company as to receive or transmit applications for. suretyship, or otherwise to procure suretyship to be effected by such company, etc., shall be deemed an agent of the company. Champenois & Blank v. Donald Co., 153 Miss. 719, 1212 Sou Rep. 485.
Likewise an agent authorized to solicit and receive applications for insurance, and to countersign and issue policies intrusted to him for that purpose, is regarded quoad hoc as the general agent of the company, and while his powers could be limited, and such limitations would be binding as between the company and himself, and as to all persons having notice thereof, his authority, as to third persons without notice, or knowledge of facts to put them upon inquiry which would lead to notice, is to be determined by the nature of the business usually done by the agent, and is primia facie co-extensive with its requirements. Sun Ins. Office, etc., v. Mitchell, 186 Ala. 420, 65 Sou. Rep. 143.
The tendency of Florida decisions has been to regard surety companies, insofar as they transact their ordinary business of becoming sureties for hire under the laws of this state, as being in a like situation to insurance companies, and as being governed by the same legal principles in so far as the conduct of their affairs is carried on.
Thus it was held in National Surety Company vs. Williams, Receiver, 74 Fla. 446, 77 Sou. Rep. 212, that an indemnity bond, executed by a surety company in the course o'f its business of suretyship for hire, was in effect a con tract to which the rules governing ordinary contracts of insurance should be applied, it appearing in that ease that the bond in question had been given to indemnify the bank against losses by its cashier through breach of duty. Many authorities were cited in the opinion to support that view, and the bond in that case was construed in like manner as an insurance contract is construed, although it appeared that the particular instrument sued on was denominated a bond by all the parties to it, was executed in the form of a bond was regarded by all the parties as a contract of suretyship and was sued on in the declaration as such. Other authorities have regarded the proposition in the same light. See Spencer on Suretyship, sec. 30; Anderson vs. National Surety Co., 196 Penna. St. Rep. 288. The oft stated maxim that "sureties are favored in law" has no application to the business of suretyship for hire. People ex rel. Kasson vs. Rose, 174 Ill. 310, 51 N. E. 246.
No sound reasoning has been suggested as to why the business of suretyship as carried on by surety companies under state regulation, should not be regarded by the Courts as analogous to the insurance business conducted by insurance companies under similar circumstances, and we are therefore impelled to the conclusion that our statute relating to agents of surety companies, and defining who shall be deemed and held to be agents of such companies, should receive the same construction that has been put upon Section 6207 C. G. L., 4256 R. G. S. supra.
We are therefore of the opinion that under section 6307 C. G. L. 4345, R. G. S., every person who shall so far represent any surety company in this state as to receive or transmit applications for suretyship, or to receive for delivery bonds founded on application forwarded from this state, or otherwise to' procure suretyship to be effected by such company upon the bonds of persons or corporation in this state, must be deemed and held to be an agent of such surety company as a matter of law, and that such surety company will not be heard to assert that the status of agency do'es not exist in any case falling within the purview of the statute.
But we are further of the opinion that while the public have a right to rely upon the statutory agent's apparent authority, arising from the fact of the agency itself imputed to him by the statute, to do any act in the course of his agency which he undertakes to do of a character usually performed through agents, and that persons dealing with such statutory agent are not bound to inquire as to his special powers to act in a particular transaction wherein he undertakes to act for the company, unless the circumstances are such as to put them upon inquiry as to a limitation on the agent's power to act in the special instance, that nevertheless, when the circumstances cw*e sufficient to suggest such an inquiry as to a limitation on the agent's authority, notice of such limitation, if it exists, will be imputed and the party held bound by the actual facts he might have discovered had he given heed to the circumstances which put him upon inquiry. American Fire Ins. Co. vs. King Lmbr. & Mfg. Co. 74 Fla. 130, 77 Sou. Rep. 168, 250 U. S. 2, 63 L. Ed. 810; Mutual Life Ins. Co. vs. Hilton-Green, 202 Fed. 113, 211 Fed. 31, 241 U. S. 613, 60 L. Ed. 1202; Pac. Mutual Life Ins. Co. of Calif. vs. Barton, 50 Fed. (2nd) 362 (C. C. A. 5th Circuit); Southern States Fire Ins. Co. vs. Vann, 69 Fla. 549, 68 Sou. Rep. 647 L. R. A. 1916B 1189; Aetna Ins. Co. vs. Holmes, 59 Fla. 116, 52 Sou. Rep. 801.
In the case now before the Court, the Circuit Judge found from the evidence that the agent of the National Surety Company had no authority to execute and deliver the bond sued on. There is nothing in the record which shows that the Court erred in reaching this conclusion. The bond that the agent signed was for the penal sum of $100,000.00 and was of a special and peculiar form framed by the attorney for the obligees, and not by the surety company or its agent. Neither the agency agreement nor the two powers of attorney which Raie had, gave him any power to incur an obligation of this kind or in this amount, so actual authority on his part to bind the National Surety Company was wholly lacking, and the Court properly so held.
But apparent authority is equal to real authority in cases of this kind when limitatiohs on the agent's authority are unknown (Pac. Mutual Life Ins. Co. vs. Baryon, supra) and so it is argued by counsel for plaintiffs in error that since Raie was admittedly authorized to, and did, solicit the writing of bonds for the National Surety Company in Broward, Palm Beach and Dade Counties, received applications fob bonds, collected premiums,' wrote bonds, and delivered bonds, the statutes of the State of Florida impose on the National Surety Company responsibility for all the acts reasonably done by Raie on its behalf in the prosecution of its business, even though he had no express authority to write the particular bond in question. Corklite Co. Inc. vs. Rell Realty Corporation, 249 N. Y. (Ct. Appeals) 1, 162 N. E. 565, Champenois et al., vs. Donald Co. 121 Sou. Rep. 485, supra; Sun Ins. Office, etc., vs. Mitchell, 65 Sou. Rep. 143 Supra; Zell vs. Herman Farmers Mut. Ins. Co. 75 Wis. 521, 44 N. W. 828; Am. Fire Ins. Co. vs. King, etc. Co. 74 Fla. 130, supra. But as we have heretofore pointed out, constructive agency of this kind is subject to being defeated by circumstances brought to the attention of the party dealing with such an agent, sufficient to put him upon inquiry that the agent had no authority to write the kind of bond being applied for.
Whether or not the agent Raie had apparent authority to execute the bond in question by reason of his general agency, and the circumstances surrounding the manner in which he carried on his business of representing the surety company, so as to bind that company in the interest of an innocent third party, presents a mixed question of law and fact. Watkins vs. Sims, 81 Fla. 730, 88 Sou. Rep. 764. And had a jury not been waived, such question would ordinarily have been submitted to the jury under appropriate instructions, so that they might determine from the evidence whether an agency did in fact exist for the purpose of executing the particular bond. Standard Oil Co. vs. Nickerson, 138 Sou. Rep. 55, opinion filed Nov. 24, 1931, at the present term.
The Circuit Judge, sitting as a trier of the facts, specifically found that the circumstances surrounding the negotiations for the bond sued on in this case, as well as the circumstances surrounding its execution, were such as in law and fact put the plaintiffs, and those acting for the plaintiffs, upon inquiry as to the nature and extent of the agent's authority which did not warrant his execution of the particular kind of bond applied for, and that therefore no agency fot its execution on behalf of the National Surety Company in this instance could be justly found.
This finding has substantial support in the evidence, and therefore an appellate court is not warranted in reversing the judgment and awarding a new trial on the ground that the evidence does not support the verdict, or that the verdict is against the weight of the evidence. Palatka Abstract & Title Co. vs. Haskell, 100 Fla. 1504, 131 Sou. Rep. 394 and cases cited. Standard Oil Co. vs. Nickerson, supra, decided at the present term.
In the consideration of this case the Court has had the benefit of able oral arguments and exhaustive briefs which have given us the benefit of all available authorities touching or controlling the points in issue, but in none of them have we found anything which stands contrary to the con elusion we have reached here that the verdict ought not to be disturbed.
We have also' considered whether or not there was a ratification, under the principles on that subject most recently stated by Mr. Justice Terrell in Meyer v. Nator Holding Co., 102 Fla. 689, 136 Sou. Rep. 636, where it was said that one for whom another acts as agent, even if unauthorized, cannot accept and retain any part of the benefits of the transaction, without also incurring the liability incident to the alleged agent's acts in the transaction.
But ratification cannot be implied from the fact that the premium was paid to the agent Raie, because the evidence shows that the company did not know of it at the time and that it was never remitted to nor accepted by the surety company. Neither did this premium paid, nor any part of it, ever reach that company's treasury, and obligee's payment to' Raie with imputed notice at the time that Raie had no authority to execute the bond for which the premium was paid, was equally as ineffective to bind the company through this payment as was Raie's unauthorized execution of the bond, because the lack of authority to execute the bond precluded the existence of authority to accept on behalf of the company a premium for doing something which the surety company expressly disavowed.
The retention of the indemnity agreements executed by the applicants for the bond is equally insufficient to show ratification of this particular bohd. These indemnity agreements appear to be so framed as to constitute a general continuing contract of indemnity not only for this one bond, but for any and all bonds which may be applied for by the same parties in futuro.
Ratification because of a claim under these agreements was urged against the indemnors as to this particular bond, cannot- be implied because there is nothing to show that the surety company was not entitled to bona fide assert reliance on these indemnity agreements in seeking indemnity for costs and expenses incurred by the company is seeking the cancellation of the bonds already executed which would in equity be subject to cancellation for any just or equitable cause, whether such a claim would be upheld or not. The indemnity provided for might have covered damages arising out of applications for bonds which were never issued at all, and if such was the surety company's bona fide claim, it cannot be said that the mere assertion of rights claimed under a general continuing indemnity agreement of this character would ratify the bond where the damages claimed arose from the application, not the bond.
Actual or conventional authority on the part of the agent to execute the bond sued on in this case was undoubtedly lacking. So whatever right of recovery plaintiffs in' error acquired against the surety company was by reason of the execution of the bond delivered to them under circumstances showing apparent authority which would amount to real authority, coupled with the absence of notice on the part of the obligees as to any limitation on the powers of the agent to execute it.
Under circumstances such as appear here the question of agency was a question primarily of fact where the evidence was conflicting, as it was here, and that question was determined adversely to the plaintiffs in error by the verdict of the Circuit Judge.
This is not a ease where authority to execute and deliver the bond existed as was the case in Champenois & Blank v. Donald Co., from Mississippi, supra, where there was a question raised as to its exercise in fact, which the statute estopped the company to deny. Neither is it a case where the agent was vested with authority to frame the terms of bonds to be issued and to sign the bond so framed and attach the seal of the company to it, and receive the premium therefor, as in Corklite Co. vs. Rell Realty Co., from New York, supra, especially when the amount of the bond involved here is taken into consideration in connection with a power to execute bonds up to' $50,000.00 only in any case, except with special permission from the company.
So without in anywise disapproving the doctrine of those eases on which plaintiffs in error most strongly rely, we find them to be inapplicable to demonstrate error in the finding of the Court below, and so holding, we must affirm the judgment rendered.
Affirmed.
Whitfield, P.J., and Terrell, J., concur.
Buford, C.J., and Brown, J., concur in the opinion and judgment.
Ellis, J., dissents.
The bond was in effect a contract of guaranty given to secure the payment of two notes, aggregating $100,000.00, executed by Federal Realty Corporation to Lucille F. Parsons and J. Lester Parsons, her husband, both of which were secured by a mortgage.