Court Opinion

ID: 3478097
Source: CourtListenerOpinion
Date Created: 2016-07-05 20:52:07.364567+00
Date Added: 2024-06-11T14:04:57.322530
License: Public Domain

The judgment of the Civil District Court for the Parish of Orleans decrees that the claimant, Mrs. Ida Lewis Cobb, Administratrix substituted for Derolice D. Cobb, have judgment in her favor, in solido, against the National Surety Company of New York and the American Surety Company of New York in the amount of $15,000, and that the balance due this claimant, after the receipt of her pro rata share from the funds deposited in the registry of the Court by the Fidelity  Deposit Company of Maryland, be paid claimant by the American Surety Company of New York.
The claim of the intervener, Mrs. Ida Lewis Cobb, Administratrix, against the American Surety Company and against the Fidelity  Deposit Company, is based on the qualifying bonds executed at different times by each of these companies for the National Surety Company.
Intervener contends that she is entitled to participate, not only in the fund of $50,000 *Page 1060 
deposited in the registry of the court by the Fidelity  Deposit Company, but also that she is entitled to judgment against the American Surety Company.
In our original decree, the judgment appealed from is annulled, in so far as it awards judgment in favor of Mrs. Ida Lewis Cobb, Administratrix, substituted for Derolice D. Cobb, against the American Surety Company, and the claim is dismissed to that extent.
(1) The application for rehearing herein granted protests against the dismissal of intervener's claim against the American Surety Company of New York, and against the reduction of intervener's judgment to $15,000, against the National Surety Company of New York.
The relation of the parties involved in this claim is as follows:
The Tri-State Transit Company operated the bus which caused the injury of Derolice D. Cobb, the claimant's deceased husband.
The Equitable Casualty and Surety Company was the automobile liability insurer of the Tri-State Transit Company.
The National Surety Company, as surety, executed the qualifying bond of the Equitable Casualty and Surety Company.
The American Surety Company, on February 24, 1931, became the surety on the qualifying bond of National Surety Company.
The Fidelity and Deposit Company of Maryland, on March 3, 1932, executed, as *Page 1061 
surety, the qualifying bond of the National Surety Company.
The Fidelity  Deposit Company of Maryland deposited $50,000, the amount of its bond, in the registry of the court as in concursus.
The American Surety Company made no deposit in court, but is vigorously contesting the claims asserted against it, denying any liability whatsoever thereon.
(2) The contention of the appellant, American Surety Company, is that the qualifying bond of the Fidelity  Deposit Company, filed with the Secretary of State on March 3, 1932, superceded the qualifying bond filed by the American Surety Company on February 24, 1931, and that thereafter appellant ceased to be liable for any debts or claims against the National Surety Company, except such debts or claims as may have arisen and accrued while its bond was in effect.
The further contention of the appellant, American Surety Company, is that none of the claims involved herein arose or accrued during the existence of its qualifying bond, which was from February 24, 1931, to March 3, 1932, and that hence, under the terms of its bond, it is not liable for any of the claims asserted in this case.
The conditions of the qualifying bond, as executed by the American Surety Company, for the breach of which a cause of action arises, reads as follows:
"Now, therefore, the conditions of the above obligations are such, that, of (if) the said National Surety Company, shall *Page 1062 
make prompt payment of all claims arising and accruing to any person during the term of said bond, by virtue of any contract of insurance or indemnity or fidelity or guaranty, entered into in this State, whenever such payment may become due, and shall promptly pay any judgment obtained in any of the Federal or State Courts of this State, arising out of any contract of insurance or indemnity or fidelity or guaranty, entered into in this State, and shall faithfully comply with and perform all and singular the duties and obligations imposed upon it, under and by reason of the provisions of an Act of the Legislature of Louisiana, approved November 17, 1921, being Act No. 58 of the Extra Session of the Legislature for the year 1921 and entitled * * *".
It is provided in Section 1 of Act No. 58 of the Extra Session of 1921 that "said bond or deposit to be held subject to any claim, liens or judgments that may be judicially obtained against them in the courts of this State, or the Federal courts in this State, or arising from any contract of insurance, or indemnity, or fidelity, or guaranty entered into [in] this State." There is nothing originally in Act No. 58 of the Extra Session of 1921, nor in this act as amended by Act No. 340 of 1926, that imposes any liability on any subsequent qualifying surety for the pre-existing obligation of its principal. Nor is such liability assumed by any of the subsequent sureties under the terms of its bond.
It is clear, therefore, if the claim arises during the term of the bond signed by a particular qualifying surety, that that particular *Page 1063 
surety, and not a subsequent qualifying surety, is liable for the claim when reduced to judgment.
The bond required by Act No. 58 of the Extra Session of the year 1921, as amended by Act No. 340 of 1926, is not a single bond of $50,000, filed by all of the Guaranty, Fidelity, Surety and Bond Companies doing business in the State, with one or more Guaranty, Surety and Bond Companies as sureties thereon; but each Guaranty, Fidelity, Surety and Bond Company doing business in the State is required by the Act to give a separate bond in that amount with such sureties.
Nor does Act No. 340 of 1926 declare that any of these separate surety bonds shall be deemed a continuous bond, as contended by the intervener, Mrs. Ida Lewis Cobb, Administratrix.
Under Article 2315 of the Revised Civil Code, "Every act whatever of man that causes damage to another, obliges him by whose fault it happened to repair it." In other words, a tort under the law of this State creates an obligation front which a cause of action for damages arises.
As declared in Articles 28, 31, and 32 of the Code of Practice: "Personal actions are grounded on one of four causes which give rise to personal obligations. The causes are contracts, or quasi contracts, offenses, or quasi offenses." Article 28.
"Personal actions arise from offenses, as when one has become liable to another for the injury he has inflicted on him by some crime or offense, such as theft or slander." Article 31. *Page 1064 
"Personal actions arise from quasi offenses, when the ground of action is the injury done to another by one of those faults which are not considered as real crimes or offenses." Article 32.
Necessarily, Cobb's claim for damages against the Tri-State Transit Company arose when the accident, in which he was injured, occurred on May 7, 1930.
Cobb's suit was filed in the District Court on October 7, 1930. On both dates, the qualifying surety of the Equitable Casualty and Surety Company, the automobile liability insurer of the Tri-State Transit Company, was the National Surety Company.
The American Surety Company became the surety on the qualifying bond of the National Surety Company on February 24, 1931, almost a year after the accident occurred and more than four months after the suit was brought.
The condition of the bond given by the American Surety Company is that it shall make prompt payment of all claims arising and accruing to any person during the term of the bond, by virtue of any contract of insurance or indemnity or fidelity or guaranty entered into in this State.
It is true that the judgment obtained by Cobb against the Tri-State Transit Company was rendered on March 14, 1931. But the judgment did not create Cobb's claim, as contended by intervener, Mrs. Ida Lewis Cobb, Administratrix. It merely created the validity of the claim which actually arose at the time of the accident. We so held in the original opinion *Page 1065 
and adhere to the conclusion then reached by this court.
(3) We also held in the original opinion that Mrs. Ida Lewis Cobb, Administratrix, was not entitled to an increase of the judgment in her favor from $15,000 to $30,000. This increase is asked under the provisions of Act No. 292 of 1926, which requires that a motor carrier, before obtaining a certificate of convenience and necessity from the Louisiana Public Service Commission, furnish a policy or bond in the sum of $30,000 on each motor vehicle having a seating capacity of more than seven passengers.
But the policy issued by the Equitable Casualty  Surety Company contained a provision limiting its liability to $15,000 in cases of personal injuries, and the Public Service Commission accepted the policy.
We find no warrant for holding that a claim under the policy can be allowed in any greater sum than that stipulated in the contract, since appellant's claim against the receivership of the National Surety Company is necessarily based on the bond issued by its principal, the Equitable Casualty  Surety Company, in which the liability of that company is limited to $15,000.
Appellant's claim against the American Surety Company is not well-founded, as we have already shown.
(4) The American Surety Company, on February 24, 1931, became surety on the qualifying bond of the National Surety Company. This bond was in existence *Page 1066 
from February 24, 1931, to March 3, 1932, when the Fidelity and Deposit Company of Maryland became surety on the qualifying bond of the National Surety Company.
In the original opinion we have found that the following debts or claims arose while the American Surety Company was surety on this qualifying bond of the National Surety Company and is liable for same:
(2) Sol Weiss, Successor to Weiss Yarrut and Stich .......................................... $ 1,500.00 (3) James K. Feibleman Realty Co., Inc. ............   5,720.00 (4) Pan American Petroleum Corp; (Claim of Alex Ranieri Construction Co.) .................   2,768.97 (5) Mexican Petroleum Corp. of La. .................     964.80 (8) Sinclair Refining Co. (J.J. McGaughhey Co. Claim) .....................................   3,223.98 (13) Swift  Co. (Joe De Marco Claim) ...............   8,819.66 ---------- Total ...................................... $37,997.41
We have found no good reason for changing the result on the application for rehearing granted to the American Surety Company in this case.
(5) Judgment was rendered in the lower court in favor of Woodward, Wight  Company, Ltd., against the National Surety Co. of New York, and the funds deposited by the Fidelity  Deposit Company of Maryland, in solido, in the sum of $4,430.10, to be paid on a pro rata basis from the $50,000 deposited in the registry of the Court by the Fidelity  Deposit Company of Maryland. *Page 1067 
A devolutive appeal was taken from this judgment at a subsequent session of the court. As it was necessary to cite the appellees in order to perfect the appeal, and it appeared from the record that this had not been done, the appeal was not considered by this court in its original opinion.
However, a rehearing was granted to Woodward, Wight  Company, Ltd., when it was pointed out in its application that, as a matter of fact, the attorneys for the appellees in this concursus proceeding had accepted service of the petition of appeal, but, through inadvertence, the documents evidencing the waivers of citation of appeal were omitted from the supplemental transcript filed by Woodward, Wight  Company, Ltd., in this court.
As the appeal is now properly before us, we will consider same.
The judgment of the lower court recognizes the claims of twenty-nine claimants, including the claim of Woodward, Wight 
Company, Ltd., for $4,430.10 and decrees that all of these claimants have judgment in solido in the amounts set opposite their names against the National Surety Company of New York, as principal, and against the funds of $50,000 deposited by the Fidelity  Deposit Company of Maryland, the qualifying surety on the bond of the National Surety Company of New York.
Among these twenty-nine claimants are nine claimants, who also have judgment in their favor, in solido, against the National Surety Company of New York and *Page 1068 
the American Surety of New York, the qualifying surety on the bond of the National Surety Company of New York, in the respective amounts set opposite their names. This judgment decrees that the remainder due these nine claimants, after their pro rata payment from the funds of $50,000 deposited in the registry of the court by the Fidelity  Deposit Company of Maryland, be paid them by the American Surety Company of New York, qualifying surety on the bond of the National Surety Company of New York. See Judgment, Report of Commissioner, pages 89, 90 and 91.
The total claims of all of these twenty-nine claimants in solido against the National Surety Company of New York and its surety, the Fidelity  Deposit Company of Maryland, to be paid on a pro rata basis from the $50,000 deposited in the registry of the court by the Fidelity  Deposit Company of Maryland, amount to $164,509.21.
The total claims of the nine claimants in solido against the National Surety Company of New York, and its surety, the American Surety Company of New York to be paid out of its bond for $50,000, amount to $41,226.61, the remainder of which is to be paid by the American Surety Company to these nine claimants, after their pro rata payment from the funds of $50,000 deposited in the registry of the court by the Fidelity  Deposit Company of Maryland.
The total claims allowed, plus fees, etc., are more than the $50,000 deposited in *Page 1069 
court by the Fidelity  Deposit Company of Maryland.
As all of the twenty-nine claimants have judgment in solido against the National Surety Company of New York and its surety, the Fidelity  Deposit Company of Maryland, it follows necessarily that each of these claimants must receive his pro rata share out of the $50,000 deposited by the Fidelity  Deposit Company of Maryland, the principal and surety on the bond being debtors in solido of these claimants, and the fund not being sufficient to pay all claims in solido against the debtors.
Upon the Receiver's petition the Court issued an order authorizing him to cite all Louisiana creditors to assert in the concursus proceedings any claim which they may have.
The Fidelity  Deposit Company of Maryland, the qualifying surety on the bond of the National Surety Company, and the American Surety Company, the qualifying surety for the National Surety Company, from February 24, 1931 to March 3, 1932, were cited to appear and answer to any and all claims filed herein against any of the said companies. But Woodward, Wight  Company, Ltd., brought suit only against the National Surety Company of New York and its qualifying surety, the Fidelity  Deposit Company of Maryland.
Appellant did not seek to obtain judgment against the National Surety Company of New York and its qualifying surety, the American Surety Company of New York, while the nine claimants *Page 1070 
herein obtained judgment in solido against the National Surety Company of New York and against both of its qualifying sureties, the Fidelity  Deposit Company of Maryland and the American Surety Company of New York.
The National Surety Company of New York, principal, and the two sureties on its bond, are all debtors in solido to these nine claimants.
Woodward, Wight  Company, Ltd., under its appeal attempts to modify the judgment in favor of these nine claimants, so as to decree that their claims allowed against the American Surety Company be paid by that company primarily and that said claimants be allowed to participate in the fund deposited by the Fidelity Deposit Company only in the event their claims remain unpaid after full recourse has been had on the American Surety Company.
This modification of the judgment is attempted by appellant on the theory that the American Surety Company alone is primarily bound.
A complete answer to this contention is that the National Surety Company of New York, the principal on each of these bonds, is insolvent.
Necessarily, its two sureties, one on each of these bonds, are both liable primarily to these nine claimants, judgment in solido.
This is not a case where there are several sureties, each for a part, on the same bond; but the bonds are separate bonds, with a separate surety on each bond, and *Page 1071 
the principal debtor on both bonds is insolvent.
The Fidelity  Deposit Company of Maryland, one of these sureties, has not pleaded benefit of division, but has paid the whole amount of the bond, in the sum of $50,000, into the registry of the court.
Nor has the American Surety Company, the other surety, pleaded the benefit of division, nor could it do so, since, at the same time, it denies any liability as surety. Kilgore v. Tippit et al., 26 La.Ann. 624.
Nor can the surety demand discussion before judgment, but only under execution. J. Davidson Hill  Co. v. Bourcier, 29 La.Ann. 841; Brink et al. v. Bartlett et al., 105 La. 336, 29 So. 958; R.C.C. Art. 3046.
Appellant, Woodward, Wight  Co., Ltd., does not attack the judgment of these nine claimants against the American Surety Company of New York, "but, on the contrary, urges and upholds the validity thereof," as stated in its brief filed in this case.
If the sureties themselves, under the facts of this case, can not plead the benefit of division, or of discussion at this time, it is clear that appellant, Woodward, Wight  Co., Ltd., cannot be permitted to do so, in order to modify the judgment in favor of the nine claimants herein.
(6) Intervener seeks to obtain judgment against the National Surety Co. and its qualifying surety, the Fidelity  Deposit *Page 1072 
Company of Maryland, in the sum of $15,748.08.
Intervener proved that on or about August 1, 1929, the Equitable Casualty  Surety Company became surety on a bond for $439,400 of the Levee Construction Company, Inc., a Louisiana corporation, in favor of the United States of America and furnishers of labor and material under the provisions of Section 270, title 40 U.S.C.A., known as the Heard Act. This bond was given in connection with a contract by the United States of America and Levee Construction Company, Inc., for the construction of the Bedford-Bayou Vidal Levee, Lots 1-2-3 in the Lower Tensas Levee District of the State of Louisiana.
The Levee Construction Company, Inc., was placed in receivership proceedings filed in the Civil District Court for the Parish of Orleans, in the matter entitled Acme Blow Pipe 
Sheet Metal Works, Inc., v. Levee Construction Company, Inc., No. 189-825 of the docket of that court. The intervener is the holder and owner, before maturity, for materials furnished, of a certain promissory note dated May 12, 1930, drawn by the Levee Construction Company, Inc., to the order of intervener, in the sum of $13,290.31. This note bears interest at the rate of 8% from January 1, 1930, and in principal and interest calculated to January 28, 1933, amounts to $17,056.39.
Intervener sold on open account during August, 1930, and delivered to Levee Construction Company other materials in the value of $50.84. *Page 1073 
The above amounts are subject to certain credits, as shown by the proof in this matter.
Intervener showed that materials, etc., to the amount of $4,430.10 were delivered on the job and used in the construction of the levee by the Levee Construction Company, Inc. This sum of $4,430.10 was arrived at by taking one-third of $13,290.31, being the principal sum as shown by the testimony.
One-third of the materials making up this sum was delivered and used in the construction of the levee. Intervener is therefore entitled to recover to the extent of one-third of $13,290.31 or $4,430.10.
Due to the receivership of that company, intervener could not collect from the Equitable Casualty  Surety Company.
The National Surety Company was the qualifying surety on the bond of the Equitable Casualty  Surety Company, and, consequently, intervener now asserts its rights against the National Surety Company in this receivership.
Intervener further showed that the Fidelity  Deposit Company of Maryland was the qualifying surety on the bond of the National Surety Company and requested judgment against it.
As intervener fully proved up its claim, the Commissioner recommended that there be judgment, in solido, in favor of Woodward, Wight  Company, Ltd., in the sum of $4,430.10 against the National Surety Company and the Fidelity  Deposit Company of Maryland. *Page 1074 
Upon its depositing $50,000, the amount of its bond in the registry of the court, the judgment of the lower court decreed that this company had fully and completely relieved itself from any further obligation or liability whatsoever on its bond.
As the claim of Woodward, Wight and Company, Ltd., is not contested by the surety, and is fully proved, we see no good reason why this claim should not be allowed.
It is therefore ordered that our original decree be amended by ordering that the judgment appealed from against the National Surety Company of New York and its surety, Fidelity and Deposit Company of Maryland, in favor of Woodward, Wight  Company, Ltd., in the sum of four thousand four hundred and thirty and 10/100 dollars ($4,430.10) be affirmed, with five (5) per cent interest per annum from judicial demand until paid.
It is now ordered that our original decree, as amended, be reinstated and made the final judgment of the court.
The right to apply for a rehearing in this case is reserved to Woodward, Wight  Company, Ltd., appellant.
FOURNET and HIGGINS, JJ., dissenting in part.