Court Opinion

ID: 7036559
Source: CourtListenerOpinion
Date Created: 2022-07-24 06:46:10.774091+00
Date Added: 2024-06-11T16:11:09.895456
License: Public Domain

On petition for rehearing.
Perkins, J.
This was a suit against Michael Batzner, and ■some twenty-five other persons as his sureties, on Batzner’s ■official bond..
The sureties answered non est factum. Trial by the Court. Judgment for plaintiff.
The plaintiff contends to sustain the judgment:
1. That the sureties executed the bond sued on.
2. That if they did not, they are estopped by the facts in the case, to deny its execution. The bond is not commercial paper.
It is not clear that the plaintiff could give evidence of the estoppel, it not having been replied; but we shall waive this point. The point as to the technical execution of the bill of exceptions was not made on the original hearing, either by Court or counsel, and will not be noticed now.
The bond was not executed by all the defendants. As to one, it was a simple forgery; and as to others, against whom judgment was rendered, though the bond was signed by them, it was never delivered. It was not delivered by them to the obligee, nor, absolutely, to any one else for the obligee, but, conditionally, to the principal in the bond, to be delivered to the obligee, only in the event of its being first signed by certain other persons. It was delivered as an escrow, if it could be thus delivered to a co-obligor. See Berry v. Anderson, at *419this term. As to some of the defendants, it must he admitted, no condition was imposed'as to delivery, and as to some Nof them, the condition was _ not expressed with sufficient certainty to clothe it with the character of a contract. The question which we propose briefly to discuss is, were those defendants who signed the-bond and delivered it conditionally to the principal in it, estopped to dispute its validity as to themselves, it having been delivered by the principal to the obligee, in breach of the condition?
It seems to be settled.that an estoppel does not exist in such cases, at all events, where there are circumstances, in the given case, calculated to. put the obligee on inquiry, or that may operate as notice of the imperfect condition of the instrument; for, in such case, the obligee does not stand as an innocent party; his own negligence is the proximate cause of the injury he sustains. Passumsic Bank v. Goff, et al., 31 Vermont, 315; Swann v. The North British Australian Company, in the Exchequer Chamber, May, 1863; 10 Jurist, (N. S.) p. 102; The York County Ins. Co. v. Brooks, and note, Am. L. Reg. vol. 12, p. 399; Berry v. Anderson, at this term. The estoppel will prevail, if at all, only as to an innocent party—a party ordinarily diligent.
The inquiry arises, then, was there negligence in this case, on the part of the obligee, or those acting for the obligee, in accepting the bond? Our code provides that, a person elected county treasurer, “shall, before entering upon the duties of his office, execute his official bond, with at least four freehold sureties, in a penalty of not less than double the amount of money which may come into his hands at any time during his term, by virtue of his office, to the acceptance of the county commissioners.” 1 G-. & H., p. 640.
The code further provides, in an act on p. 160, 1 G. & H., that if it is discovered, after an officer enters upon his duties, that his bond is insufficient; or if it shall become so by reason *420of the removal, &c.; of any of his sureties, the principal may be summoned before the Judge of Common Pleas to improve the old or execute a new bond.
The 14th section of this act, p. 165, reads thus:
“Any officer required to execute a bond, as provided herein, in consequence of the insufficiency of the sureties, may procure other sureties, to sign the old bond, at the time set for hearing such petition, and if such judge shall deem such new sureties sufficient, no new bond shall be required, but such old bond, with the names of the new sureties subscribed thereto, shall be directed to be filed with the proper keeper of such bond; and such new sureties, shall be liable for all the official acts of such officer, from the original date of the execution of such bond; and such bond thus signed by such additional sureties, shall be valid against the principal, the original and new sureties, and all such sureties shall be jointly and severally liable, for the official acts of such principal, from the date of the original execution of such bond.”
These sections are public law, and those signing the bond m the case at bar, may be taken to have acted with a view to them.
Row, what do these sections import? Certainly that there is to be a sort of judicial investigation and approval of official bonds. Take the first section quoted. It is made the legal duty of the commissioners—
1. To fix the penalty of the bond, for it must be not less tnan double the amount of money, &e. The commissioners, then, must ascertain the probable amount of money, &c., and must then fix the penalty.
2. They must ascertain that there are not less than four freeholders among the sureties on the bond, and to do this, they should properly examine the persons themselves, because property is constantly changing hands.
*4213. They must determine, that the bond has been executed by those whose names appear to it.
4. They must decide as to the amount of property represented by the bond to satisfy themselves of its sufficiency. All these facts the public interest, as wrell as the law, requires that the commissioners should be satisfied about. How, the passing upon these points necessarily involves a full investigation of the facts connected with the execution of the bond. Such an examination, the commissioners will be negligent if they do not make. Such an- examination, those signing the bond in the case at bar, had a right to expect would be made, and the commissioners must be chargeable with knowledge of the fact. And public policy, as well as justice to all parties, requires .that the decisions of Courts should be such as will tend to induce commissioners to discharge this statutory duty. It may occasion loss in a few instances of existing bonds, on making the first decision, but the loss will be the fault of the commissioners not of the law or Courts, and future losses will be prevented.
It would seem that the natural way of complying with the statute quoted, by commissioners, in approving bonds, would be to first fix the amount of the penalty; then approve, on investigation, a number of persons as sureties; then let the bond be drawn up in that penalty with the approved names inserted in the body of the bond, &e.; and, afterwards, when the bond should be presented, satisfy themselves of the genuineness of signatures, &c. This is the mode in which Courts approve administration-bonds, appeal-bonds, &c. There are then fixed rules of law to determine the binding obligation of the instruments. In this case, no such course was taken. The principal got up a bond according to his notion, not upon the approval of the commissioners, and went about soliciting names to it, not of those whom the commissioners had accepted, not freeholders or non-freeholders, and with *422nothing to guide the signers as to what would be the ultimate penalty, or who, or how many would be co-obligors. In such a state of facts what could signers do but make their own terms and conditions-, knowing that, by law, all must be investigated, and might be changed on a hearing before the commissioners? That hearing and investigation it was the duty of the commissioners to institute, as they were bound to know. It was not instituted then, and, hence, may be now as to execution by each surety, and the consequence is, the county may suffer. The case of Bibb v. Reid & Hoyt, 3 Ala. p. 88, is directly in point, and, after much reflection, we are prepared to say, is, in our judgment, good law. Ve do not say that the same rule that applies to bonds taken pursuant to a statute, would apply in private transactions.
L. Barbour, J. D. Howland, and Hanna £ Quick, for the appellants.
Geo. Holland and C. C. Binkley, for the appellees.
Per Curiam.
The judgment is reversed, with costs. Cause remanded.