Court Opinion

ID: 6677290
Source: CourtListenerOpinion
Date Created: 2022-07-20 21:17:12.452661+00
Date Added: 2024-06-11T16:00:44.312259
License: Public Domain

The opinion of the court was delivered by
Mr. Justice McGowan.
In May, 1887, the department of agriculture of the State granted to W. T. Seward & Co., a body corporate, a license to dig and mine phosphate rocks and phosphatie ■deposits in certain navigable waters of the State; subject to the requirements, terms, and conditions provided by and expressed in the laws of the State and the rules of the department of agriculture. (See the license and the rules in the case.) The defendants, with Seward & Co., the licensees, executed a joint and several bond to the State in the penalty of $5,000, conditioned “that the said W. T. Seward & Co. shall make true and faithful returns to the comptroller general of the number of tons of phosphate rocks and phosphatie deposits by the said W. T. Seward & Co. dug, mined, and removed and shipped or otherwise sent to market, at the end of every month, and shall punctually pay to the State treasurer at the end of every quarter or three months *571the royalty provided by law to be paid thereon, to wit, one dollar upon each and every ton, to be estimated only on the crude rock, and not upon rock after it has been steamed or dried ; the first quarter to commence to run on the first day of January in each year; then the above obligation to be void and of none effect, otherwise to remain in full force and virtue,” &c.
It seems that the said Seward & Co. went immediately to mining and made “returns” of the number of tons mined and removed, by what conveyance, and the amount due the State in money therefor, for the months of September, October,'November, ar^d December of 1887, and of January, February, and March of 1888. But as it appeared from the records of the treasurer’s office, that Seward & Co. were largely in arrears of dues to the State, viz., $7,764.86, the department of agriculture revoked their license to mine about the middle of April, 1888, and soon thereafter brought this action on the bond in the name and for the benefit of the State. The bond itself was not before the court, but the third paragraph of the complaint set out the condition in the terms above set forth, and then proceeded, in a number of paragraphs, to assign breaches of the bond, as follows:
“Paragraph 4. That the said W. T. Seward & Co., under and by virtue of said license, dug, mined, and removed large quantities of phosphate rocks and phosphatic deposits from the navigable streams and waters of the State.
“Paragraph 5. That the condition of said bond has been broken ; that the said W. T. Seward & Co. did not make true and lawful returns to the comptroller general of the number of tons of phosphate rocks and phosphatic deposits by them dug, mined, removed or shipped, or otherwise sent to market at the end of each month, and that they did not pay to the State treasurer at the end of every quarter or three months the royalty provided by law to be paid thereon.”
Paragraphs 6, 7, 8, 9, 10, 11, and 12 assign breaches for the different months named, in the words following: “That. W. T. Seward & Co. did not pay the royalty provided by law to be paid by them on phosphate rocks and phosphatic deposits, dug, mined, and removed by them, as required by said bond,” &c.
Paragraph 13 assigned as a breach “that the said W. T. Sew-*572arc! & Co. failed and neglected to make returns to the comptroller general of the number of tons of phosphate rocks and phosphatic deposits dug, mined, or removed by them during the months of April and May, 1888; and that the said W. T. Seward & Co. did not pay to the State treasurer at the end of the current quarter the royalty provided by law to be paid, &c.; and that the said W. T. Seward & Co. are now indebted unto the said plaintiff in the sum of $2,936.53 on account of royalty due by them for said months on phosphate rocks, &c., dug, mined, and removed by them, and for which they have made no returns as aforesaid,” &c.
“Paragraph 14. That the defendants are indebted to the plaintiff upon the said bond, by reason of the breaches of the condition thereof as hereinbefore assigned, in the sum of $5,000 ; that payment has been demanded of the defendants, but they have refused to pay the same,” &c.
At the September term of the court (1888), the complaint having been read, the defendants, without making any particular objections to the pleadings or alleged discrepancies, moved to dismiss the complaint on the ground that it “did not state facts sufficient to constitute a cause of action.” Judge Norton overruled the motion, but gave the defendants twenty days to answer. They availed themselves of this privilege, and answered as follows : “I. That they admit as true the allegations made in the first three paragraphs of the complaint. II. That they have no knowledge or information sufficient to form a belief as to the truth of the allegations made in the fifth, sixth, seventh, eighth, ninth, tenth, eleventh, twelfth, and thirteenth paragraphs of said complaint, &c. III. That they have no knowledge or information sufficient to form a belief as to the truth of the allegation made in the fourteenth paragraph of the complaint, that these defendants are indebted to the plaintiff upon their bond, by reason of the breaches of the conditions thereof assigned in the said complaint, and therefore they deny said allegations, but admit the other allegations of said paragraph of demand and refusal of payment,” &c.
Upon these pleadings the case came on again for trial before Judge Hudson and a jury. After the trial commenced, Mr. Verdier, *573for the defendants, called the attention of the court to the fact that there were some discrepancies between the complaint filed and the copy served upon the defendants, the alleged copy not being in all respects a perfect copy. The court said“The bond must speak for itself. If there should be any little error in the recital of the bond, I don’t think it would be fatal.” Mr. Verdier called attention to the fifth paragraph, 4th and 5th line from the bottom, where the attorney general read “and” where the alleged copy has the word “or,” and therefore he objected to the reading of the complaint. (Overruled and exception taken.) The attorney general then offered the evidence for the State, consisting first of the sworn returns of Seward & Co. for seven months. (For specimen return, September, 1887, see following page.)
Mr. Verdier, for the defendants, objected to the competency of this testimony, but the judge ruled that the written acknowledgments of the principal were binding upon the sureties.
Mr. E. L. Roche, an officer of the department of agriculture, was sworn, who testified that Seward & Co. made no returns for the months of April and May (1888), and that at that time they had on hand of phosphate rocks mined under the license and after-wards disposed of at least 2,000 tons, worth $2,000, or more— “estimated,” as was the universal practice according to law', “only on the crude rockthe difference being 5 per cent, between that and dried rock. (Mr. Verdier objects to this testimony as irrelevant.)
The defendants offered no testimony, except formal proof of the license, but mo^ed for a non-suit, “on the ground that the State had not made out its case. There is no allegation that we have ‘shipped’ one ton of rock. They must prove that we have ‘mined,’ dug, and shipped or sent to market the rock. The royalty is only payable when the rock has been dug, mined, and shipped,” &c. The judge refused the motion and sent the case to the jury, which found a verdict for the State for $5,000, the penalty of the bond.
The defendants appealed, filing fifteen exceptions, which, being! long and printed in “the record,” need not be set out here. There is no appeal -from Judge Norton’s order refusing to dismiss the

*574

*575complaint at a previous term of the court. The defendants did not plead performance or offer any evidence, so that the only question in the case-is whether there was error in refusing the non-suit on account of the alleged discrepancies between the complaint filed and the copy served on the defendants, which discrepancies were first brought to the attention of the court during the progress of the trial. The matter is certainly out of the usual course, and, for the sake of clearness, we think the exceptions may be condensed, substantially, into the three following propositions, which we will now proceed to consider:
“First. That the judge erred in holding that no proof of the bond was necessary, as it was dispensed with by the admissions of the answer, although it was shown that the bond set forth in the complaint was, in its condition, materially different from that stated in the copy served on the defendants.” It does not appear that the copy of the complaint showing the alleged discrepancy was offered in evidence, but assuming that it was before the court, the third paragraph of the complaint set out the condition of the bond as stated above, and the first paragraph of the answer “admitted as true the allegations made in the first three paragraphs of the complaint.” Why, was that not an admission of the condition of the bond, which dispensed with further proof of it? The defendants had seen the original complaint, when, at a previous term of the court, the motion was made before Judge Norton to dismiss it, and if they intended to object to any alleged discrepancies in the copy, then was the proper time to have done so, when necessary correction could have been made. But that was not done, the defendants did not disclose the discrepancy, but afterwards answered to the merits, which, as it seems to me, was a waiver of the objection. See Waldrop v. Leonard, 22 S. C., 121.
But if the defendant's had the right to stand upon the precise phraseology of the copy served, notwithstanding their knowledge of the terms of the bond as contained in the complaint filed, we do not think that the condition of the bond stated in the copy was, in meaning and effect, “materially different” from that in' the complaint filed. The discrepancy complained of was manifestly a clerical error of the copyist, being the omission of the *576words “and not” in the 5th line from the bottom of the third paragraph of the copy. In the complaint the sentence reads, “one dollar upon each and every ton, to be estimated only on the crude rock, and not upon rock after it has been steamed or dried;” while the copy reads, “one dollar upon each and every ton, to be estimated only on the crude rock [and not] after it has been steamed or dried.” It is manifest that the purpose was to express the idea that the estimate was to be only on the crude rock, known to be the express requirement of the law. The first part of the sentence expressed it affirmatively, and the second part was merely intended to express the same thing negatively. The omission of the words “and not” may make the whole paragraph somewhat confused and less clear, but there can be no doubt as to the meaning with or without the omitted words. In both readings the positive declaration is made that the “estimate” should be “only on the crude rock,” and in either case that necessarily controls the meaning.
It will be observed that the word is “estimate,” which, according to the established rule of 5 per cent, difference, could be made as well after as before the rock was dried. Besides, both the original and copy complaint, in setting out the condition of the bond, correspond in the statement that the said W. T. Seward & Co. “shall punctually pay the State.treasurer at the end of each quarter the royalty provided by law to be paid thereon,” which provides expressly that the “estimate shall be made only on the crude rock.” The objection is obviously technical. The defendants must be taken to know the-law. They had knowledge of the terms of the bond, and it is not claimed that they were misled by the omission of the two words in the copy of the condition.
Section 190 of the Code declares that “'no variance between the allegation in a pleading and the proof shall be deemed material, unless it have actually misled the adverse party to his prejudice in maintaining his action or defence upon the merits. Whenever it shall- be alleged that a party has been so misled, that fact shall be proved to the satisfaction of the court, &c. In Ahrens v. State Bank (3 S. C., 401), it was held that “under the Code, non-suit cannot be granted for a variance between the *577allegations and the proofs. The only remedy is by amendment upon such terms as shall be just, as provided in section 192 (190), and to entitle himself to the remedy, the party prejudiced by the variance must satisfy the court immediately by affidavit that he has been misled, and in what respect he has been misled,” &c. In 4 Wait Practice (630), it is said: “The policy of the legislature and the tendency of the decisions of the courts are in favor of simplifying the practice in legal proceedings as much as possible, and of disregarding the technicalities and matters of form, and especially so when it becomes necessary for the furtherance of justice to disregard mere technical errors. * * * An amendment may be made by inserting in the copy of the summons filed the names of defendants actually served with the summons, or who have appeared in the action. An omission to serve a copy of the complaint with the summons, or to state in the summons where such complaint is or will be filed, will not render the judgment void. Such an omission is a mere irregularity, which ought to be taken advantage of by motion, for the court will have acquired jurisdiction by the service of the summons, and may grant an amendment as to form,” &c. We cannot doubt that the omission in the copy of the complaint of the words “and not” was a clerical error-, not material in substance, and, therefore, a mere irregularity, which the judge was right in overruling as a ground for non-suit at the trial.
“Second. That it was error to admit in evidence the returns of Seward & Co. and the testimony of Mr. Roche, the officer representing the State, for the reason that the assignments of alleged breaches were defective, not being in the very words of the condition of the bond, therefore the evidence was.irrelevant.” There is here no allegation of discrepancy between the complaint filed and the copy served, but the objection, as we understand it, is that the testimony was inadmissible, for the reason that the assignment of breaches was defective in not denying all the requirements of the condition — “dug, mined, and removed and shipped,” and therefore the evidence under these said assignments was not admissible, because “irrelevant.” The question of the relevancy of testimony is necessarily left very much to the judgment of the trial judge.
*578But were the assignments of breaches in this complaint defective and insufficient ? The terms of the condition were “dug, mined, and removed and shipped, or otherwise sent to the market.” The paragraphs of the complaint, from six to twelve inclusive, state breaches substantially as follows, viz. : “That the said W. T. Seward & Co. did not pay to the said treasurer the royalty provided by law to be paid by them on phosphate rocks, &c., dug, mined, and removed by them, as aforesaid,” &c. The words “and shipped” are omitted in assigning the breach ; but we incline to think that the assignment was sufficient. Ik was only necessary to negative clearly the very thing covenanted to be performed, and whether that was done was a matter of intention to be determined by construction. The assignment positively denied .that Seward & Co. had paid the royalty on phosphates “dug, mined, and removed.” Why was that not a breach well assigned ? The word “removed” is quite as comprehensiveas that of “shipped,” which gives no new force to the sentence, but seems to have been added as a sort of legal tautology, only “to make assurance doubly sure.” We do not understand that, according to the conditions of this bond, there could be no breach until the phosphates were not only “dug, mined, and removed,” but also “shipped,” in the sense of being actually placed on board of a vessel. If this were the proper construction of the bond, then the State could never recover anything from these parties, for the reason that the very “returns” of Seward & Co. state that they “removed” their phosphates by railroad, and it could not be averred that they had “shipped” them, unless in the sense of business men, when, in practical life, they say “shipped by rail,” or “shipped by express,” ko.
' But if we pass over all the paragraphs indicated (from 6 to 12) without making any ruling on the point made as to them, we think there can be no doubt as to the sufficiency of the assignment of breaches in the fifth paragraph of the complaint, which is almost in the identical words of the bond, as follows, viz., “alleges that the condition of said bond has been broken ; that the said W. T. Seward k Co. did not make true and faithful returns to the comptroller general of the number of tons of phosphate rocks and phosphatic deposits by them dug, mined, *579removed, or shipped, or otherwite sent to market, at the end of each month, and that they did not pay to the State treasurer at the end of each quarter the royalty provided by law to be paid thereon,” &c. Is this not a good assignment of breaches ? What does “thereon” refer to? Certainly the phosphates by them “dug, mined, removed, or shipped, or otherwise sent to market.” These are the words verbatim of the bond, except that between the words “removed” and “shipped” the word “or” instead of “and” is used. The defendants say that, considering the connection, the word “and” made it necessary in every ease to allege and prove that the phosphates were not only dug, mined, and removed, but also “shipped.” We have just seen that it is at least doubtful whether this could have been the intention, if the word “shipped” is to be taken in its literal sense. It is true that “and” is a copulative conjunction and “or” is disjunctive; but if the word “or,” which immediately precedes the word “shipped,” disconnects it from the preceding sentence, the word “or,” which immediately siicceetfedAtrt=:wqrd, must, by the same rule, disconnect it from the sentence lfhich follows “or otherwise sent to market.” “^
We think the fifth paragraph of the complaint assigns a good breach for not paying for phosphates “dug, mined, removed, or shipped, or otherwise sent to market” — tha,t is to say, sent to market by rail, wagon, lighter, “or otherwise and that there was no error in refusing to exclude the evidence on the ground that it was “irrelevant.” There being pertinent and relevant testimony to go to the jury, it was not a case for non-suit. “When the declarations or admissions of the principal are made in the course of the performance of the business for which the surety is bound, so as to become part of the res gestae, they are evidence against the surety.” Brant on Surety, 658, and authorities.
“Third. That his honor erred in charging the jury that the terms on the back of the license did not confine the liabiltv of the defendants as sureties to a single quarter, but they were liable to the State for the amount due by their principal, provided that amount did not exceed the penalty of the bond ; while it is submitted that the rules of the department of agriculture formed *580part of the contract between the State and the defendants, and ■limit their liability to the first quarter in arrear.” This objection relates only to the amount recoverable, in effect admitting tbe liability of the sureties for the first quarter in arrear.
The judge charged “that the liability on the bond is to the extent of the royalty due, but not beyond the penalty of the bond, $>5,000 ; therefore, if the undisputed testimony shows that there is as much as $>5,000 due, you will find to that amount.” Was this error ? A copy of the rules and regulations of the department of agriculture was attached to the license to mine, one of which was as follows“That in all cases where phosphate royalties [are] not promptly paid in tbe time provided by law, the license shall be suspended, and any mining done under the same after such suspension shall be considered and treated as illegal,” &c. The bond had no attachment, and speaks for itself, but as it required the royalty to be paid quarterly, the defendants claimed that, upon the first default, the license should have been suspended ; and that, as sureties, they are not liable for any default of their principal after that time. The aforesaid rules and regulations were attached to the license manifestly as information to Seward & Co. that in the case indicated the department retained the power to revoke the license, and thereby prevent any further mining under it. But we fail to see that the department, acting for the State, assumed any obligation to suspend a license on the very day default of payment may be made, or at any particular day. We think the right to suspend the license was retained by the department for the purpose of enforcing payment, and thereby protecting and securing the rights of the State; that the regulation was not mandatory?i but merely directory. “Affirmative words make a statute directory and negtive or exclusive words make it imperative.” Attorney General v. Baker, 9 Rich. Eq., 521.
Until the license was suspended Seward & Co. had the right to continue mining. Tbe right to suspend constituted no part of the contract with either the principal or his sureties on the bond. As a matter of fact, the license was not suspended until about April 10, 1888, and there is no evidence that Seward & Co. mined any phosphates after that time. “If a statute is directory *581as to the principal affected by it, it is equally so as to his sureties and those incidentally affected.” Endl. Interp. Stat., § 431, and note; Looney v. Hughes, 30 Barb., 605. It is well settled that mere indulgence will not discharge a surety. In order to have that effect, there must be an agreement for indulgence between the creditor and principal debtor, obligatory on the creditor for a certain and definite period. Witte v. Wolfe, 16 S. C., 275, and authorities. We agree with the Circuit Judge, that within the penalty of the bond “the sureties are liable for all the shortcomings and defalcations of the principals.”
The judgment of this court is, that the judgment of the Circuit Court be affirmed.
In this case counsel for appellants filed their petition asking for a rehearing, alleging as grounds therefor, that the court, had misconceived the proper meaning of the word “removed,” which did not apply to rock “shipped, or otherwise sent to market,” but only to the taking of rock from the stream where dug; that'the court had overlooked the legal question raised by the exceptions, which alleged error to the Circuit Judge in charging that the treasurer’s certificate showed an indebtedness of over seven thousand seven hundred dollars, whereas only a transcript from the treasurer’s books, showing credits, would be sufficient to show a failure to comply with the conditions of.the bond ; that the additional penalty of suspending the license was not provided by statute, but only by contract, and therefore defendants were entitled to its protection; that the suspension of the license increased the liability of defendants ; that the paper in suit was a penal bond, and not a negotiable security ; and that this court had overlooked these points of law.
On this petition the following order was endorsed January 28, 1891:
Per Curiam.
We have carefully examined this petition and do not find that the court has overlooked any material fact or important principle of law. It is therefore ordered, that this petition be dismissed.1

 This completes the cases of April term, 1890.- — -Reporter.