Court Opinion

ID: 6678491
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:18:25.011157+00
Date Added: 2024-06-11T16:00:46.273833
License: Public Domain

Me. Chief Justice McIvee,
dissenting. This is an action on a bond, a copy of which appears in the “Case,” which should be set out in the report of the case. The main defence relied upon was that said bond was intended to be', and was in fact, a statutory bond given for the purpose of discharging certain writs of attachment, issued by the clerk of the Court of Common Pleas for Aiken in an action then commenced by the present plaintiff, W. B. Sullivan, against George W. Susong, W. A. Susong, A. E. Susong, James EL Bumbough, and D. L. Boyd, copartners in business, under the name of Susong & Co., which attachments had been levied upon certain property of said Susong & Co., and of some of the individuals composing that firm, in the counties of Greenville, Aiken, Edgefield, Abbeville, and Laurens, and the defendants contend that said bond was void as a statutory obligation for want of compliance with certain statutory requirements. The plaintiff, on the other hand, insists that said bond was a mere common law obligation, and never intended to be such an undertaking as was contemplated by the statute. So that our first inquiry is, whether the bond upon which the action is based was a statutory undertaking or a mere common law obligation.
When Susong & Co., the defendants in the action commenced by attachment, appeared in such action, the statute provides that they could apply to the officer who issued the attachments (the clerk of Aiken County), or to the court (meaning, of course, the Court of Common Pleas for Aiken County), for an order to discharge the same; and upon .such application, Susong & Co. should “deliver to the court or officer an undertaking * * * approved by such court or officer, to the effect that such sureties will pay to the plaintiff the amount of judgment that may be recovered,” &c., Code, sections 262-3. Now it does not appear that Susong & Co. ever took any step whatever towards obtaining a discharge of the attachments by an order of any officer or any court, but, on the contrary, it does appear that they sought such discharge by an agreement with *516the plaintiff. This most abundantly appears from the tele graphic correspondence which passed between Mr. Benet, acting as attorney for Susong & Co., and Messrs. Henderson Bros., attorneys for Sullivan, the plaintiff, on the 27th of July, 1887, in which Mr. Benet, being in Greenville, propounds the following inquiry to Messrs. Henderson Bros., who were in Aiken: “Will you authorize Ansel (a gentleman of the Bar in Greenville), to release Sullivan attachment on filing bond satisfactory to Greenville Clerk Court?” To which Henderson Bros., sent from Aiken the following reply: “Will authorize Ansel to release attachments upon bond for double amount claimed, approved by Ansel and clerk of Greenville.”
When this correspondence was offered in evidence, appellants objected, it seems, upon the ground that it was res inter alios acta, inasmuch as it did not appear that appellants either knew of or had any connection with snch correspondence. The objection was overruled and appellants excepted, and the competency of this evidence is one of the points presented by this appeal. One of the allegations in the complaint was that, “the defendants, on or about the 27th day of July, 1887, in order to discharge the said attachment, in pursuance of an agreement had between said W. E. Sullivan and said Susong & Co., did execute in favor of this plainttff their certain bond, &c., and this allegation was denied in the answers of these appellants. It seems to us that the evidence in question was directiy responsive to the issue thus presented, and was, therefore, competent — not as binding appellants to the terms of the agreement evidenced by the correspondence, but simply to show that the bond in question was given” in pursuance of an agreement had between said W. E. Sullivan and said Susong & Co., to which the appellants might or might not afterwards become parties, as they saw fit.
Having reached the conclusion that the bond in question must be regarded as an ordinary common law obligation, and not as a statutory undertaking contemplated by the provisions of the attachment act, it becomes unnecessary to inquire whether it lacks any of the essential requirements of such an undertaking, or, if so, whether the want of such compliance renders the *517bond void as against these appellants; and we are, therefore, not to be understood as passing upon any of these questions.
But it is insisted by appellant that if the bond be regarded as a common law obligation, no recovery can be had upon it in this action, because there is no allegation in the complaint which shows that it is a paper of that character, and the case of Booker v. Smith, 38 S. C., 236, is cited to sustain that proposition. While we do not propose to question the authority of that case for the point there decided, we do not think the case is applicable here. In the first place, the bond there sued upon was a bond to procure a warrant of attachment, while here the action is upon a bond given to obtain a release of the levy of an attachment. But this, which may possibly be regarded as an immaterial difference between the two cases, is not the only difference. There the bond, or undertaking, upon its face showed that the intention was to give the undertaking prescribed by the statute, and there was no hint or suggestion that the undertaking was intended to be a common law obligation, while here the bond not only does not purport to be a statutory undertaking, but, on the contrary, purports on its face to be an obligation given without reference to the provisions of the statute; and in the complaint it is expressly alleged that it was given “in pursuance of an agreementK between Sullivan and Susong & Co., which negatives the idea that it was an obligation given in pursuance of the statute. We do not think, therefore, that this position of appellants can be sustained.
Begarding, then, the bond constituting the basis of this action as a common law obligation, the appellants contend that they are not bound thereby, for the reason that the bond shows on its face that they were to be bound merely as sureties of Susong & Co., and that until each one of the members of that firm (the bond being an instrument under seal) signed the same, they, the appellants, assumed no liability; and they offered evidence tending to show that one of the members of that firm, to wit: A. E. Susong, the one who was understood to be worth the amount of the bond, never did in fact sign the bond, but his apparent signature thereto was forged, and that the signature showed on its face that it was not genuine. To understand *518properly the ruling of the court as to the offer of this testimony, it will be necessary to state substantially what occurred before and at the time the bond was signed by the appellants. According to the testimony of the appellant, Williams, which was not objected to, except as hereinafter stated, on the day the bond was signed, and before it was signed by appellants, G-. W. Susong and Boyd, two of the members of the firm of Susong & Co., went to the store of Williams, and requested him to sign the bond as surety for Susong & Go. “Mr. Susong stated that his two brothers belong to the company, and would sign the bond, of course; and I told him that I knew that there was no risk if W. A. and A. B. Susong signed it, and stated that they belonged to the company and of course would sign it.” To this testimony plaintiff’s counsel objected, unless notice is brought home to the plaintiff, and defendants’ counsel stating that they would prove notice, no ruling of the court was then made. The witness, Williams, further stated that he knew the financial condition of W. A. and A. E. Susong — “they were considered among the wealthiest and most substantial men in East Tennessee.” The witness also stated that he consented to sign the bond on condition that W. A. and A. E. Susong would sign it.
On the same day and soon after this conversation, the witness was sent for to go to the clerk’s office, and said: “I went into the clerk’s office, and Mr. Moseley showed me the bond, and I read it and glanced at it to see if W. A. and A. E. Susong were members of the company, and I saw their names set forth in it, and I signed the bond.” It also appears that when Williams went into the clerk’s office, the only name signed to the bond was that of G. W. Susong, and soon after Stuart and Williams signed in the order stated. At this time, the following persons appear to have been present: Mr. Ansel, who, it will be remembered, was representing the attorneys for the plaintiff, Mr. Benet, who was acting as attorney for Susong & Co., and Mr. Moseley, who, with Mr. Ansel, was to approve the security, besides Boyd and Bumbough, two of the members of the firm of Susong & Co., and probably G. W. Susong. The witness, Williams, further stated that Boyd, Benet, and Ansel were discussing the completion of the bond by the other parties, *519W. A. and A. B. Susong, who were not present. The witness was then asked this question: ‘ ‘State whether it was understood by Mr. Ansel and Mr. Benet and the other parties who were interested in this matter, that W. A. Susong and A. E. Susong should sign that bond before it should become effective?” To this question plaintiff’s counsel objected and the objection was sustained, to which defendants’ counsel excepted. The witness was then asked, “What was the substance of what passed?” to which the witness replied: “The substance of it was, that the bond was to be signed by W. A. and A. E. Susong, and the conversation was between Boyd, Benet, and Ansel, and'whether the others joined in, I do not know; I do not know that I said anything on the subject.” This witness further testified that he did not know, and had no information as to the fact, that A. E. Susong had not signed the bond before it went into the possession of the plaintiff, and never learned the fact until May or the summer of 1892, shortly before this action was commenced, 2d August, 1892.
On the cross-examination, this witness said that he did not remember to have said anything in the clerk’s office when he signed the bond, about the conversation between himself and Boyd and W. G-. Susong, at his store, wherein he agreed to sign the bond on condition that it was signed by A. E. and W. A. Susong. When this witness was recalled, he was asked: “What was the understanding- — what was expressed by these parties before you signed the bond as to who would sign it?” To which he replied as follows: “As I stated in my direct or cross-examination, that I did not remember saying anything to them about the condition of my signing it, but Mr. Boyd and Mr. Ansel and Mr. Benet were discussing the perfecting of the bond and the completion of it, and it was the understanding that that bond was not to be delivered until W. A. and A. E. Susong signed it.” When asked if that was his understanding, he replied: “That is my presumption; that that was the understanding' — -that was the understanding.” In the cross-examination, the witness again said that he did not state or say anything about his agreement at the store with Boyd and G-. W. Susong, while in the clerk’s office; but he added: “It was *520stated, by one of these men, Benet, Boyd or Ansel, that that bond was not to be delivered until it was completed by the signature of W. A. and A. E. Snsong. That was so stated by some of them, and if it had not been stated, I would not have signed it;” though the witness again repeated that he himself said nothing of the kind while in the clerk’s office.
The defendant’s counsel then proposed to offer evidence tending to show that the name of A. E. Susong was forged, which, upon objection, was ruled out, the court holding as follows: “It seems to the court that the testimony of Mr. Williams is not sufficient to show any agreement between himself and Ansel and Moseley with reference to the execution of this bond, nor does it appear that there was any condition between the parties at that time with reference to his signing the bond, and upon that ground I will have to exclude all evidence going to show forgery.” To this ruling defendants’ counsel excepted, and then proposed to offer evidence tending to show that the signature on the bond does resemble that of A. E. Susong, and that it shows on its face that it is not genuine, all of which was ruled out, and defendants excepted.
For the purpose of determining the legal question presented, it is proper to assume that appellants, if permitted to do so, could have shown, not only that the signature of A. E. Susong was forged, but, also, that it showed upon its face that it was not genuine, or at least that the testimony offered would have tended to show both of those facts, and this would, at least, have raised issues of facts to be passed upon by the jury. For the ruling of the Circuit Judge is necessarily based upon the theory that even if the forgery were proved, and even if the signature of A. E. Susong showed upon its face that it was not genuine, those facts would not relieve the appellant from liability, unless it also appeared that plaintiff had notice that the appellants signed the bond under an agreement that it was not to be delivered until it was signed by A. E. and W. A. Susong, or that appellants signed upon the condition that they were not to be liable until A. E. and W. A. Susong had also signed. Now conceding, for the present, the correctness of the legal proposition upon which the ruling of the Circuit Judge *521was manifestly based, and disregarding the parol evidence of what occurred at the time of the signing of the bond, it seems to us clear that the bond bore upon its face notice that the condition upon which the appellants signed was that all the members of the firm of Susong <& Co. should sign before the appellants incurred any liability. It is manifest that the appellants were mere sureties of Susong & Co., and had no further connection with the matter except as such sureties. Now what were they sureties for? The terms of the bond show that they were sureties for the performance of an obligation to be entered into by Susong & Co., which could only be done by the execution of the bond by each one of the members of that firm, whose names are mentioned in the bond as principal obligors. The contract of the appellants was to secure the performance of the obligation of Susong & Co. — not the obligation of any one or more of the members of that firm, but the obligation of all the members of that firm. The first step to be taken towards fixing the liability of the sureties, therefore, is to show that Susong & Co. have entered into the obligation, the performance of which the sureties have undertaken to guarantee. Until this is done, the appellants have incurred no liability, for as sureties they have the right to stand upon the strict terms of their contract.
It may be said, however, that this is a joint and several obligation, and only the appellants are sued in this action, and may be held liable as several obligors. But, in the first place, it is not so clear from the terms of the bond that the obligors are bound jointly and severally, for the terms are, “we bind our heirs, executors, and administrators, jointly and severally,” not ourselves, our heirs, &e.; but as the word “ourselves” may have been accidently omitted by the printer, we will not rest our conclusion upon this, and, on the contrary, will assume that the bond is in form, joint and several. But assuming this, the question still remains, what is the contract of appellants, treated as several obligors? Why, nothing more than a guaranty that an obligation to be entered into by Susong & Co. shall be performed by them. It is unlike an ordinary joint *522and several note, where each signer promises to pay a specified sum of money, either jointly with his cosigners or severally.
The question which we have been considering, has been the subject of much conflict of opinion in the courts of other States, as is apparent from the numerous cases with which we have been furnished by counsel on the one side and on the other of this case. Without undertaking to go over these numerous cases, we may refer to the case of State v. Potter, 63 Mo., 212 (21 Am. Rep., 440), as furnishing quite an elaborate review of the cases up to that time (1876); and we are, therefore, relieved of the necessity of considering any of the cases prior to that decision, except to say that in Dair v. United States, 16 Wall., 1, therein referred to, it was expressly stated by Davis, J., in delivering the opinion of the court, that if the name of Clond had appeared as a cosurety in the body of the bond, the decision would have been otherwise, for that would have been notice to the agent of the government, and then adds these words: “In any case, if the bond is so written that it appears that several were expected to sign it, the obligee takes it with the notice that the obligors who do sign it, can set up in defence the want of execution by the others, if they agreed to become bound only on condition that the other cosureties joined in the execution;” and that case was subsequently recognized in the case of Butler v. United States, 21 Wall., 272. It may also be noted that the case of Russell v. Annable, 109 Mass., 72 (12 Am. Rep., 665), which seems to have escaped attention in the review of cases in State v. Potter, supra, possibly for the reason that the cases under review were cases in which one surety was seeking to escape liabibity upon the ground that he signed upon condition that others were to sign as cosureties, whereas in Russell v. Annable, the question was to the effect of the failure of the principal obligor to sign upon the liability of the surety. We will recur to this case hereafter. It may be said that this review of the authorities in State v. Potter, shows that the weight of authority was in favor of the view stated above in the extract from Dair v. United States.
We shall not undertake to review the cases decided since 1876, but will content ourselves with referring to some of the *523cases which seem more immediately applicable to the case in hand; for it seems that in many, if not in most, of the cases, the question has been as to the effect of the failure of a cosurety to sign, which, it seems to us, may be different from the failure of the principal obligor to execute the bond in question; though we are not to be understood as definitely deciding that there is any real difference.
In Russell v. Annable, supra, the action, as in this case, was upon a bond given for the purpose of dissolving an attachment of partnership property. Both of the partners were named as principals, but the bond was executed by only one of them in the name of the firm. It was held that the surety would not be liable without proof of the assent of the other partner to the execution of the bond. In that ease the opinion of the court contains the following language: “The bond purports to be the joint and several contract of certain persons named therein as principals, and the defendant and George M. Stevens as sureties. The defendant’s undertaking is only that the principal obligors shall fulfill the obligation which by the terms of the bond they have assumed. But if the bond was not binding upon both Dennett and Pottle (as it was not, for want of due and proper execution of the instrument on their part), they assumed no obligation, and it was not binding upon the sureties. It was essential to the bond that the principals should be parties to it; it is recited that they are so, and the instrument is incomplete and void without their signature. * * * The instrument is incomplete without the signature of éach partner, or proof that the signature affixed had the assent and sanction of each of them. The sureties on a bond are not holden, if the instrument is not executed by the person whose name is stated as the principal therein. It should be executed by all intended parties” —citing Bean v. Parker, 17 Mass., 591; Wood v. Washburn, 2 Pick., 24. It may be said that, inasmuch as the bond in that case showed on its face that it was signed in the partnership name by one of the partners, this was notice to the obligee that the execution of the bond was incomplete, as all persons are presumed to know the law, that the signing of the partnership name to a bond by one of the partners does not *524bind his copartners unless their assent or subsequent ratification is shown. Admitting this to be so, would not the fact which the defendants offered to show, and were not allowed to do so, that the signature of A. E. Susong showed on its face that it was forged, operate as notice, and much stronger notice, to the plaintiff in this case.
In Johnston v. Kinball Township, 39 Mich., 187 (33 Am. Rep., 372), decided in 1878, the action was upon the official bond of the township treasurer, “which was drawn up in the usual form, setting “forth himself as principal and plaintiff in error as sureties by name, and bound them all to the performance of his duties.” The principal never 'signed the bond, and the court held that, in such cáse, the sureties were not liable, unless there was positive evidence that the sureties intended to be bound without requiring the signature of the principal. The court used this language: “The obligation of a surety cannot fairly be extended beyond the scope of his written contract * * * and we think that, presumptively, at least, where the contract which he signs calls for the signature of other parties, the instrument is to be deemed inchoate and imperfect until they also sign it” — citing the case of Hall v. Parker, 37 Mich., 590 (26 Am. Rep., 540), decided in 1877, which rested on the same principle. Bunn v. Jetmore, 70 Mo., 226 (35 Am. Rep., 425), is a direct authority to the same effect, and the court there said it was “the received doctrine” that sureties may show in discharge of their liability that their principal never was bound. On the other hand, the case of Trustees of Schools v. Sheik, 119 Ill., 579 (59 Am. Rep., 830), has been cited to show that the surety is not discharged by reason of the failure of the principal to sign the bond. But the reasoning of that case is far from satisfactory, as it treats the failure of the principal to sign as a mere technicality, while we think it is much more than a technicality, and, in fact, goes to the very root of the matter. But even that case concedes that if the obligee has notice of the fact that the bond was signed by the surety upon condition that the principal should also sign, or with notice of such facts as would puta prudent person upon inquiry, then the surety would be discharged. This admission *525is, as it seems to us, fatal to the validity of that decision; for there, as here, the name of the principal appeared in the bond as intended to be one of the obligors, and that fact, as has been held in many eases, and with good reason, is notice to the obligee that the intention of the parties was that the signature of the principal obligee was necessary to the completion of the bond. We prefer, therefore, to follow the cases previously cited rather than this Illinois case.
Many, if not the most, of the other cases cited are cases in which a surety has claimed a discharge upon the ground that he signed the bond upon the understanding that others were to sign as cosureties before the delivery of the bond, which they did not do; and where the names of such cosureties appear in the bond, there is much conflict of authority as to the effect of that fact as notice to the obligee. We do not propose to go into a consideration of those cases, for the reason, as already indicated, that such cases may, perhaps, be regarded as standing upon a different footing from cases like the present, where the defence is that the persons named as principal obligors in the bond have failed to sign the same. We will, however, notice one of them — Mathis v. Morgan, 72 Ga., 517 (53 Am. Rep., 847), for two reasons: 1st. Because it is claimed that that case has been approved by the Supreme Court of the United States, in Veach v. Rice, 131 U. S., 293; and 2d, because the case seems to be much relied upon by counsel for respondent. In the first place, the case of Veach v. Rice arose in the State of Georgia, and involved the liability of a surety on an administration bond taken by the ordinary, which must be determined by the law of Georgia, and the case of Mathis v. Morgan was merely cited to show what has been decided to be the law of Georgia, and cannot, therefore, be properly relied upon to show that the Supreme Court endorsed the proposition of law announced in that case.
But the case of Mathis v. Morgan, besides differing from the present case in the fact that there the surety claimed relief upon the ground that one of the cosureties failed to sign the bond, while the claim for relief here is based upon the ground that the principal failed to sign the bond, presents other mate*526rial points of difference, as may be seen by a brief statement of the facts of that case. In that case the complaining surety signed the bond before another surety whose name precedes his in the body of the bond, whose signature was subsequently forgeu, and the complaining surety entrusted the bond to the president of the bank, the principal obligor — one Samuel — -as escrow, not to be delivered to the obligee until the other sureties executed the bond; but Samuel delivered the bond to the obligee with all the signatures apparently genuine thereon, and it was held that the complaining surety was liable. It will be observed that in that case the surety, after executing the bond, entrusted it to Samuel, who should be regarded as practically the principal obligor, and thereby made him his agent to procure the signatures of the other sureties before delivering the bond; while here there is not only no evidence that the appellant entrusted the bond to any one, but, on the contrary, the undisputed evidence is that the appellants, after signing the bond, simply left it in the possession of the persons Avho were superintending the signing of the bond, two of whom, Ansel and Moseley, were the agents of plaintiff, the obligee. Again, in the Georgia case the bond was delivered to the obligee “with all the signatures apparently genuine thereon;” while here the appellants were not allowed to show that the signature of one of the principals, A. E. Susong, showed on its face that it was forged. The opinion of the court in that case was based upon the ground that, as the surety by entrusting the bond to Samuel to procure the signatures of the cosureties, put it in his power to commit the fraud, which was afterwards committed by some one, he must suffer, upon the familiar principle that where one of two innocent persons must suffer by the wrong-doing of a third person, the one who put it in the power of such third person to do wrong, must suffer the loss occasioned by such wrong. But for the operation of this principle in this case, it is necessary that the fact should appear, that the appellants put it in the power of the wrong-doer to do the wrong which has occasioned the loss, and that fact did not appear in this case, as it did in Mathis v. Morgan. We do not think, therefore, that the case from Georgia applies to this case.
*527It is urged, however, that the bond when delivered to Ansel bore upon its face the names of all the members of the firm of Susong & Co., and, therefore, the plaintiff, who had accepted it as genuine, should not be affected by the fact that one of the signatures was forged. Ordinarily a person, when he accepts an obligation purporting to be executed by another, takes it with the risk of being able to show that the signature thereto is genuine, when he finds it necessary to enforce such obligation by an action at law. But in addition to this, if the appellants had been permitted to show, as they offered to do, that the name of A. E. Susong, apparently signed to the bond, showed on its face that it was a forgery, then, clearly, the plaintiff could not claim to have been deceived.
It only remains to consider the two cases cited from our own State. In Martin & Walker v. Stribling, 1 Speer, 23, the action was against a surety upon a joint and several note, and the defence was that defendant signed the note as surety for McCullough with the understanding that one Bogers should sign as cosurety, and that McCullough should place in the hands of Bogers books and papers to be collected by him and applied to the payment of the note. The court held that, while there was no doubt that defendant signed the note with the expectation that Bogers would also sign, and that McCullough would deliver to him books and papers as an indemnity for their seeurityship, yet there was no evidence of any stipulation on the part of Stribling that his note should not take effect until one or both of these things were done; and there was no evidence that the signature of Stribling was obtained by any representation that Bogers would sign as a cosurety, and that McCullough would place in the hands of Bogers his books and papers to be collected and applied to the payment of the note. The case does not apply here.
Fowler v. Allen, 32 S. C., 229, is also cited. In that case the action was against the surety upon a negotiable note, and the defence was that the surety had signed the note upon a condition not communicated to the payee, which had not been performed. The court held “that where one signs a negotiable note perfect on its face as surety for another, upon the condition *528known only to the principal that it is not to be delivered to the payee until something else is done, the surety will be liable, even if such condition be not complied with, unless notice is brought home to the payee of such condition.” It is very clear, that this case is not in point here, not simply because the note in that case was a negotiable note, but because the note there was perfect on its face, and there was nothing to excite inquiry on the part of the payee. Besides, there the principal did sign the note, and the surety based her claim for relief solely upon the ground that an undisclosed condition, of which the payee had no notice of any kind, had not been performed.
It seems to us that the Circuit Judge erred in refusing to allow appellants to offer evidence tending to show that the name of A. E. Susong, one of the principals, as appearing on the bond, was a forgery, and that the same showed upon its face that it was a forgery, and for this reason the case should go back for a new trial.
I think, Therefore, that the judgment of the Circuit Court should be reversed, and that the case should be remanded to that court for a new trial.
Judgment affirmed.