Frink v. Southern Express Co. , 3 L.R.A. 482 ( 1889 )

Simmons, Justice.

The Southern Express Company sued Frink as principal, and Peacock and Carroll as sureties, on a bond given to the plaintiff by Frink, conditioned for the faithful discharge of his duties as express messenger, etc. It is alleged' in the declaration that there had been a breach of this bond, by reason of the failure of Frink to carry and deliver safely a certain package containing $3,000, which had been entrusted to him by the plaintiff’, and for the loss of which the plaintiff was compelled to recompense the consignor. On the trial of the case, the jury returned a verdict for the plaintiff against the principal and sureties, for $3,000 and interest from the date the money was entrusted to Frink. The defendants made a motion for a new trial, on thirty-one grounds, which motion was overruled by the court, and the defendants excepted. These numerous grounds, when analyzed, are, in substance: (1) That the verdict was contrary to the evidence, to the weight of evidence, and to law; (2) that the court erred in charging the jury that, whether Frink had instructions or not, his duty was to exercise ordinary care in looking after the safety of the money; (3) that the court erred in not allowing the defendants to prove certain admissions of Dempsey, the division superintendent- of the express company, to Peacock, one of the defendants ; (4) that the court erred in its instructions to the jury as to what acts of the creditor would release the surety; and (5) that the court erred in charging that if the jury should find for the plaintiff, they should add interest from the time the money was lost.

1. We have carefully read the evidence in the record, and we think it is sufficient to sustain the finding of the jury. There is no controversy about the loss of the money. The defendant, Erink, was conductor on the Cochran and Hawkinsville branch of the Macon & Brunswick railroad, as well as express messenger. The officers of the railroad company had consented for the express company to employ him as messenger. "When he reached Cochran from Hawkinsville, about two o’clock in the afternoon of September 16th, 1879, this package of money was delivered.to him. He immediately put it in the safe furnished him by the express company, locked the safe and put the key in his pocket. This safe was kept in a car which had three compartments, one for the white passengers, one for the colored and the other for .baggage. Carroll, one of the sureties on Brink’s bond, was the baggage-master, and had the key to the baggage compartment. There was also a colored man belonging to the crew of the train, employed by Erink and Carroll to assist them, who had access to the car. After receiving the money, Erink telegraphed to the agent at Hawkinsville that he had the money, and for that agent to meet him on the arrival of the train at Hawkinsville. Hnder orders from the railroad officials, he went with the engine twelve miles to procure water, and returned to Cochran about sundown. WCben he started .with the engine, he directed Carroll and the colored man above referred to to lock the baggage-car. This car was left on the track some distance from the depot, and remained in that position from about two o’clock in the afternoon until about ten o’clock at night. When Erink returned from the water station, he did not go into this car and examine his safe, nor did he examine to see whether the car was locked or not. He simply went by the car and saw that the door was closed. He then went on into the town, some three or four hundred yards off, and . remained there until about half past nine o’clock at nigbt, when he returned to the depot and got his train ready; and at about ten o’clock started for Hawkins-ville. He did not examine the safe during all this time, and did not miss the money until he arrived at Hawkinsville, when he unlocked the safe and discovered that it was gone. It was also in proof that about that time, there' were many gamblers and roughs in the town of Cochran. The safe was simply a small iron box, with an ordinary lock and key.

Under this state of facts, we think the jury were justified in finding a verdict against Prink and his sureties. Whether it was his duty or not, in the exercise of ordinary diligence, to carry this car along with the engine to the water-tank, it was certainly his duty, when he returned, to look after this money more closely than he did. It seems to us that no prudent man, knowing the surroundings as Prink must have known them, would have left that amount of money in the car seventy-five yards from the depot, no house being near by, from sundown until half past nine o’clock at night. While it was not his duty to neglect the business of the railroad, still, when he was not engaged in its business, it was his duty to look after this package, either in person or by some agent in whom he had confidence. It amounted almost to' gross negligence for him to leave this car and his safe for so long a time at night, to go up town and play' cards and visit drinking saloons. Would apy prudent man have left three thousand dollars of his own money in that condition for such a length of time? We apprehend not. There was no error in overruling this ground of the motion. This seems to have been the view taken by this court when the case was here before. Southern Express Co. vs. Frink, 67 Ga. 201.

2. But it is urged in behalf of Prink, that having carried out the instructions of Bowles, the agent of the express company, by placing the package of money in his safe immediately on the receipt thereof, he had fully complied with his duty, and if the money was afterwards lost, Brink would not be liable. The court below charged the jury, upon this point, that whether Brink had such instructions or not, it was his duty to exercise reasonable care and diligence in looking after the money; and this charge is complained of by the plaintiffs in error. We think the charge of the court upon this point was correct. The instructions of the agent certainly did not embrace the whole duty of Brink under the circumstances of this case. The special and only instructions which he says he received were, that when he received a money package to put it in the safe, lock the safe and put the key in his pocket. They were doubtless given to him to prevent him from carrying the packages around on his person, or leaving them carelessly in the depot, or the like, but it certainly was not contemplated that his compliance simply with these instructions should relieve him of the entire responsibility of guarding the package after it was placed in the safe. He would not have been justified in leaving that car containing the safe a mile from any habitation; and we do not think he was justified in leaving the car seventy-five yards away from the depot, and equally as far from where any person dwelt, without a guard, or without seeing that the car door was locked. We agree with the judge who tried this case, that the putting of the money in the safe and locking the safe was not the whole duty of the defendant. He was still bound to exercise ordinary care and diligence in taking care of the money after it was placed in the safe.

3. During, the progress of the trial, the defendants proposed to prove by Peacock, that.Dempsey, the plaintiff’s division, superintendent, who had charge of this suit, had stated to the witness that he had proof to show that a certain person had taken the money. The defendants also proposed to prove by Dempsey, that he had said to Peacock that he had evidence enough to show who had taken the money; and proposed to ask Dempsey if he did not say to Peacock that he had evidence enough to convict Carroll of taking the money, and if it was not true that he had sufficient information to convict Carroll of taking the money, and if he did not say that Carroll took the money, and that the express company was satisfied that Carroll had taken the money. The court declined to allow this testimony, and error is assigned thereon. "We see no error in this ruling. The declarations of Dempsey which the defendants proposed to prove by Peacock, were hearsay; and what the defendants proposed to prove by Dempsey himself was only the opinion of Dempsey as to the guilt of Carroll, and there was no ei’ror in excluding it from the jury. A statement of the proposition is a demonstration of it.

4. Peacock, one of the sureties, filed several special pleas, claiming that he had been released by the act of the express company in givingFrink a vacation of one month and putting Carroll in Frink’s place during that period, which was done without Peacock’s knowledge or consent or subsequent ratification ; and that this increased Peacock’s risk as surety, and exposed him to greater liability, for it gave to Carroll an opportunity of becoming acquainted with the safe, the only repository of the express company; that the express company gave the key of the safe to Carroll, thereby affording him the opportunity of having a duplicate key made, and that the safe was not broken open, but was unlocked by a duplicate key; that Carroll was the baggage-master on that car, and had access to the car. Peacock further pleaded that when he signed the bond, be did so relying upon tbe good faith of tbe plaintiff, and tbe duty and obligation resting upon said plaintiff to furnish said Erink with a safe place for tbe keeping of valuable packages ; that it failed to provide a separate compartment in tbe car, secured by a lock, and to which Frink alone could have access ; and that tbe express company, although knowing that Frink' could not remain all tbe time watching said safe, failed to provide for tbe watching of tbe safe during Frink’s absence; and that its failure so tó do exposed tbe surety to a greater risk and liability than be would otherwise have been exposed to. On these points tbe judge in tbe court below charged tbe jury as follows :

“ A man signing a contract as surety signs it with bis eyes open, or with tbe duty to have bis eyes open at tbe time. lie signs it with reference to tbe state of affairs as they may exist. At tbe time be signs that contract, be agrees to take certain risks as be knows or can reasonably find out by proper inquiry that he is to bear. He cannot sign a paper and afterwards, on a loss occurring, say, ‘ I did not know tbe condition of things at tbe time I signed it..’ ” He also charged that “ tbe express company and Frink bad a right to make an agreement that Frink might be temporarily absent from bis duties, and it is a question for tbe jury to inquire whether, when tbe surety signed tbe bond, be did it with tbe understanding that soine one should be put in tbe place of Frink during that temporary absence that “ if tbe surety signed tbe bond with the understanding (be having signed it agreeing to allow temporary absence on tbe part of Frink) that when Frink was absent from duty some one would be put in bis place to perform those duties, then be cannot set up his defence that he was released by reason of that having been done. If he knew it or could have found it out by reasonable inquiry, he cannot now set that up as a defence.” The same principle was given in charge in regard to the-other plea. These charges are complained of as erroneous. We think the propositions laid down by the trial judge are sound. It appears from the evidence that Peacock had lived and carried on business in the town of Cochran for a considerable length of time before he signed this bond. He had traveled on this train, and in this particular car with Erink. He must have known how the business was carried on in that car, the number of compartments therein, and that this safe was kept in the baggage compartment of the car. The bond which Peacock signed recited that it should not be impaired by a change of place, position or duties of said Erink, or by his temporary absence from duty. It also appears that Carroll, to whom the safe-key was given during Erink’s absence, was a co-surety with Peacock. Under this state of facts, we see no error in the charges complained of.

In the case of Magee et al. vs. Manhattan Life Ins. Co., 92 U. S. Rep. 98, Mr. Justice Swayne, delivering the opinion of the court, says : “ A surety is 1 a favored debtor.’ His rights are zealously guarded both at law £ind in equity. The slightest fraud, on the part of the creditor, touching the contract, annuls it. Any alteration .after it is made, though beneficial to the surety, has the same effect. His contract exactly as made is the measure of his liability; and if the case against him be not clearly within it, he is entitled to go acquit. But there is a duty incumbent on him. He must not rest supine, close his eyes, and fail to seek important information within his reach. If he does this and a loss occurs, he cannot, in the absence of fraud on the pai’t of the creditor, .set upas a defence facts then-first learned which, he ought to have known and'considered before entering into the contract. Vigilantibus non dormientibus leges subserviunt. Where one. of two innocent parties must lose, and one of them is at fault, the law throws the burden of the loss upon him.”

5. The next and last ground which we shall notice is, that the court below erred in its charge to the jury as to the recovery of interest upon the penalty in this bond. The court instructed the jury that if they should find for the plaintiff*, they should find interest upon the. amount from the time Frink, the principal, lost the money. Counsel for the plaintiffs in error insist that the plaintiff is not entitled to recover from the principal or the sureties more than the penalty of the bond; that the penalty named in the bond is the extent of the liability thereon, especially so as to the sureties. For a long time this has been a controverted.question, both in the courts of England and of this country. .The courts in England have decided the question in- different ways, one court holding that no more could be recovered than the penalty on the bond, another holding that interest and costs might be recovered in addition' to the penalty. We have spent a great deal of time in the examination of authorities upon this subject, and we. think that the weight of authority is, that in this class of actions, and under the circumstances disclosed by this record, the plaintiff’ is entitled to recover, in addition to the penalty named in -the bond, interest against the surety as -well as against the- principal from the time of the demand upon them.. This suit was for $3,000, the exact amount of the penalty in the bond. The condition of the bond sued on was, that Frink should well and truly account for all money which might come into his possession or control, or. foy which-he might.have, given, his receipt by reason of said employment, and make good all loss or damage which might happen to such money or property while under his control, for which he might be legally responsible; and indemnify and save harmless the said company from all liability on account of his fault or neglect. As before remarked, Frink did not deny having received the money, or that it was lost whilst in his possession ; nor was it denied that the express company had paid the consignor the $3,000. 'When, therefore, the money had been received by Frink and lost on account of his negligence, as the jury has found, and a demand was made upon him and his sureties to pay said money in accordance with the condition of his obligation, and they refused to do so, it became a debt due by Frink and his sureties to the plaintiff. If Frink had then paid the money, or in case of his default his sureties had paid it when demanded of them, in accordance with the condition of their obligation, of course no interest would have accrued thereon. "When the sureties refused to pay the money on demand, and by litigation delayed the plaintiff several years from the collection of its money, the plaintiff was entitled to damages for such delay, and the law gives the plaintiff' such damages by way of interest from the demand. Brandt on Surety-ship and Guaranty, §93, says: “It may be a reasonable doctrine that a surety, who has bound himself under a fixed penalty for the payment of money, or some other act to be done by a third person, has marked the utmost limit of his own liability. But when the time has come for him to discharge that liability, and he neglects or refuses to do so, it is equally reasonable, and altogether just, that he should compensate the creditor for the delay which he has interposed. The question, in short, is not what is the measure of a surety’s liability under a penal bond, but what does the law exact of him for an unjust delay in payment, after his liability is ascertained and the debt is actually due from him.”

Murfree on Official Bonds, ■ §689, says: “It is very clear, as a general rule, that judgment cannot be rendered against sureties for a greater amount than the penalty of the bond. Sureties cannot be held liable for interest beyond the penalty of the bond, except for such interest as accrued from their own default in unjustly withholding payment after having been notified of the default of their principal.” See also Graham vs. Bickham, 1 Am. Decis. 328, and note on page 338; Mower vs. Kip, 29 Am. Decis. 748. In Brainard vs. Jones, 18 N. Y. Rep. 35, the court hold that, “the recovery against a surety in a bond for the payment of money is not limited to the penalty, but may exceed it so far as necessary to include interest from the time of the breach.” “So far as interest is payable by the terms of the contract, and until default made, it is limited by the penalty, but after breach it is recoverable, not on the ground of contract, but as damages, which the law gives for its violation.”

In Lyon vs. Clark, 8 N. Y. Rep. 148, it is held, that “where the sum actually due by the condition of a bond without interest equals the penalty, interest can be recovered as damages beyond the penalty.” In this case Willard, J., discusses the cases decided up to that time, and draws the above conclusion. See also United States vs. Hills, 4 Myer’s Fed. Decis. § 495, same case 4 Cliff. Rep. 618; Curtis vs. United States, 100 U. S. Rep. 119. These authorities, we think, fully sustain the doctrine above announced. Eor the contrary view, see Fraser vs. Little, 13 Mich. 195, in which Campbell, J., discusses .this question and reviews the authorities.

We think, however, that the court erred in instructing the jury that the plaintiff was entitled to interest from tbe time tbe money was lost. Under tbe authorities above quoted, tbe plaintiff’ was only entitled to interest from tbe time tbe demand was made upon tbe principal and surety. Tbe record in tbis case does not show that any demand was ever made upon either. When no 'demand has been made, tbe plaintiff’is only entitled to interest from tbe time tbe writ was served upon tbe defendants. Curtis vs. U. S., supra, and U. S. vs. Hill, supra. In tbis case interest was calculated by tbe jury, under tbe instructions of the court, from tbe 16th of September, 1879, to tbe date of tbe verdict; whereas it should have been calculated only from tbe time the writ was served upon tbe defendants. We direct therefore, that tbe interest found by the jury from tbe 16th of September, 1879, up to tbe service of tbe writ upon tbe defendants, be written off' from the verdict and judgment, and that interest be calculated from the time of tbe service to tbe judgment.

Judgment affirmed, with direction.