Bradford v. National Surety Co. , 207 Ala. 549 ( 1922 )

Appellee filed the bill in this cause, averring that it was surety on the statutory official bond of one Dowis as deputy sheriff of Jefferson county in the penal sum of $2,000, as provided by the act of September 10, 1915 (Acts, p. 382); that on January 7, 1921, Agnes May Sims brought suit against Dowis and appellee, as surety as aforesaid, for wrong and injury theretofore done by Dowis under color of his office, and on October 7, 1921, recovered judgment in the sum of $2,000; that on June 16, 1921, appellant brought a similar action against Dowis and appellee and on November 14, 1921, recovered judgment in the sum of $1,000; that on November 23, 1921, Agnes May Sims caused an execution to issue on her judgment, and a copy of the same to be certified to the Commissioner of Insurance, in substantial compliance with section 1517 of the Code as amended by section 6 of the act creating the department of insurance (Acts 1915, p. 836), whereupon, December 12, 1921, complainant paid the judgment thus exhausting the security; that appellant is about to cause an execution on his judgment to issue against complainant and its securities on deposit with the state of Alabama. Wherefore complainant prayed an injunction against any effort by execution or otherwise to collect appellant's judgment out of complainant's property. Appellant's motion to dissolve the temporary injunction, issued upon the filing of the bill, and his demurrer to the bill, being overruled, this appeal followed.

The responsibility of appellee as surety on the bond must be limited by the penal sum therein named, even though damages may have been sustained to a greater extent. Ansley v. Mock, 8 Ala. 444; 25 Am. Eng. Encyc. (2d Ed.) p. 726; 35 Cyc. 1912.

After recovery and satisfaction of judgment against the surety to the full amount of the penalty of the bond, he may defend at law on that ground against all pending or future actions. Authorities supra.

To make this defense good, the former judgment must have been satisfied. Moore v. Worsham, 5 Ala. 645.

From the statement of facts, supra, it will be noted that complainant (appellee) in this cause could not have pleaded the judgment in the Sims Case against the action by appellant and cannot therefore be charged with negligence in and about making its defense in the latter case. Stevens v. Hertzler, 114 Ala. 563,578, 22 So. 121. In such case equity will enjoin the collection of the last judgment. Leggett v. Humphreys, 21 How. 66, 16 L.Ed. 50.

But appellant contends that complainant should not have relief for the reason that it might have filed its bill of interpleader, depositing the amount of the penalty of the bond in court to be distributed as equity and good conscience would require. The inference is that in that event the amount of the bond would have been distributed pro rata among appellant and Agnes May Sims — and, possibly, too, among the plaintiffs in other suits pending, but undetermined, against Dowis and complainant as surety, and that it was the duty of complainant to bring about that result. We have seen no authorities so holding. Thomas Laughlin Co. v. American Surety Co., 114 Fed. 627, 51 C.C.A. 247, and American Surety Co. v. Lawrenceville Cement Co. (C. C.) 110 Fed. 717, cited among others, may require brief comment. The bills in these cases were filed under a statute of the United States, and their equity was sustained, not as bills of interpleader, but on the ground that a trust fund, the assets of an insolvent corporation, was to be distributed pro rata among those entitled, as will appear from a reading of the opinion in the last-named case on a prior appeal. (C. C.) 96 Fed. 25. We think it will not be contended at any time that appellee's obligation to pay as much as $2,000 for the use and benefit of any person who might be injured by Dowis' breach of the bond partook in any degree of the nature of a trust. When appellee signed the bond, it did not set apart any fund for the use of persons entitled to the benefit of the instrument. Its liability for wrongs done by Dowis under color of his office, within the limit of the penalty, became just the same as that of Dowis. Nor on the allegations of the bill, can it be fairly said that appellee undertook by its payment to Agnes May Sims, arbitrarily as the brief alleges, to give her a preference over appellant, for the bill avers that payment was made under circumstances such that, in default thereof, the law would have required a summary sale of enough of appellee's securities on deposit with the state treasurer to satisfy that judgment, and, in the event such securities were not replaced within 30 days, a forfeiture of appellee's privilege of doing business in this state. Code, § 1517.

Nor do we see that the circumstances required or permitted an equitable bill of interpleader. Appellant suggests that the fact that both his claim and that of Dowis' first judgment creditor are based on the one bond is enough to establish that privity between the opposing claimants, which the authorities seem to require as a condition precedent to a bill of interpleader. Suggestions of a trust laid aside, it occurs to us that the opposing claims in this case are independent of each other, that each must be asserted as wholly paramount to the other, and that there is no more privity between them than there is in the ordinary case of two persons holding wholly disparate claims against a common debtor. 4 Pom. Eq. Jur. (4th Ed.) § 1324. And, further, notice to the Commissioner of Insurance was in the nature of a levy of execution upon appellee's securities, and appellee had no recourse but to pay, so that, had a bill of interpleader been sustained, equity, following the law, would have decreed that the Sims judgment be first satisfied out of appellee's securities, leaving nothing for appellant. As the case is, appellee's liability on the bond has been exhausted, and equity must protect it against the assertion of any further claims on the same account. Perhaps the same relief might have been had in the law court by a stay of execution; but the court of equity will grant a remedy by injunction upon the same principles. Leggett v. Humphreys, supra.

Affirmed.

ANDERSON, C. J., and GARDNER and MILLER, JJ., concur.