Southwestern Surety Ins. Co. v. Anderson

It appeared that the obligation of appellant set out in the statement was attached to that of the Farmers' Merchants' Insurance Company and Republic Guaranty Surety Company, and that the instrument evidencing those obligations had been filed in the office of the commissioner of insurance and banking. When Anderson, to show appellant's liability to him as alleged in his petition, offered as evidence a copy of the instrument, authenticated as indicated in the statement, appellant objected thereto, on the ground (1) that it appeared that the certificate of the commissioner authenticating the copy applied only so far as the instrument was the bond of the Farmers' Merchants' Insurance Company, and further appeared that its undertaking was not a part of that bond; and (2) that if the certificate of the commissioner applied to its undertaking, and same showed an obligation on its part, it existed by force of the common law and not by force of any statute; that as a common-law obligation on its part it was not entitled to be deposited in the office of said commissioner; and therefore that the commissioner could not by his certificate so authenticate a copy of it as to entitle it to be admitted as evidence in the case.

It may be conceded that appellant's undertaking was to indemnify the Republic Guaranty Surety Company against its liability as a surety on the bond of the Farmers' Merchants' Insurance Company, but it plainly also was to indemnify any and every person who was a beneficiary under that bond; and it appeared that appellant had expressly agreed that an action on that bond as its undertaking might be maintained against it by any such beneficiary, "just as if it had signed said bond." So, it seems, If it was possible for appellant to do so without formally signing the bond, it had made itself a party to it before it was approved and filed by the commissioner of insurance and banking. We know no reason why it could not become a party to the bond in the way it chose. As, if it could, it did, we think the instrument, as its obligation within the terms of the statute, was an archive in the office of said commissioner, and that the copy thereof authenticated by his certificate was entitled to be admitted as evidence against appellant. Sayles' Stat. art. 3057.

Appellant's liability being that of a surety only on the bond of the Farmers' Merchants' Insurance Company, it is insisted that judgment in Anderson's favor lawfully could not be rendered against it, unless also rendered against said insurance company. The statute declares that no final judgment shall be rendered against a party not primarily liable on a contract, "unless judgment shall have been previously, or shall be at the same time, rendered against" the principal obligor, "except where the plaintiff may discontinue his suit against such principal obligor as hereinafter provided." It further declares: "The court may permit the plaintiff to discontinue his suit as to one or more of several defendants * * * when such discontinuance would not operate to the prejudice of the other defendant; but no such discontinuance shall in any case be allowed as to a principal obligor, except in the cases provided for in article 1257." Sayles' Stat. arts. 1203, 1259. The article (1257) referred to, so far as it is applicable here, is as follows: "When a suit is discontinued as to a principal obligor no judgment can be rendered therein against * * * a surety, * * * unless it is alleged and proven that such principal obligor resides beyond the limits of the state * * * or that he is dead, or actually or notoriously insolvent." In his petition Anderson alleged, and on the trial proved, that the Farmers' Merchants' Insurance Company was a foreign corporation; that it was insolvent; and that a Nebraska court, through a receiver, was administering its affairs. It would seem, therefore, if it appeared that appellant was liable to appellee on the bond, that Anderson had alleged and proven the existence of facts which entitled him to discontinue his suit against the insurance company, and, without taking judgment against it, to take judgment against appellant as its surety. That Anderson was entitled to judgment against the insurance company on the policy and its bond was conclusively shown; and, treating appellant as a surety on the bond, as we think it must be treated, it conclusively appeared that Anderson was entitled to judgment against it also. Being entitled to judgment against both the principal and the surety and to discontinue his suit as to the former, and thereupon to judgment against the latter alone, it is obvious, in view of the further fact that judgment in its favor for the amount of the recovery had by Anderson against it was rendered over against the receiver of the insurance company, that appellant suffered no injury if, and because, the requirement of the statute that judgment should be rendered against the insurance company, or the suit against it be discontinued, before judgment should be rendered against appellant, was not complied with. But whether appellant nevertheless should be heard to insist that the judgment should be reversed, we do not think it necessary to determine; for we are of the opinion that Anderson's request that the jury be instructed to find for the insurance company and the judgment in its favor in accordance with such a finding should be held to have accomplished the purpose of the statute. While not in terms a discontinuance of the suit as to the insurance company, the legal effect thereof, we think, was the same, so far as appellant was concerned.

The condition of the bond was that the insurance company would pay "all its lawful obligations to any and all citizens of the state of Texas." By the terms thereof the bond was "subject to successive suits by citizens of the state of Texas so long as any part of the same shall not be exhausted." A breach of the condition of the bond entitling Anderson to sue thereon having been shown, we think it was not necessary to the exercise of the right, as against appellant, that he should first present his claim to the receiver in Nebraska for allowance and payment. Appellant's undertaking was to pay if the insurance company did not. On the failure of the insurance company to pay in accordance with its contract, appellant became liable to Anderson. In the judgment rendered it obtained all the relief it sought and was entitled to against such liability, to wit, judgment over against the receiver of the insurance company.

The judgment is affirmed.

On Motion for a Rehearing. Among other contentions urged in the motion is one that this court "erred in holding that the legal effect of the peremptory instruction to the jury to find in favor of the Farmers' Merchants' Insurance Company and against plaintiff was the same as a discontinuance or dismissal as to said company, and that appellant was not prejudiced thereby." As an abstract proposition, it would not be correct to say that the legal effect of such an instruction is the same as a dismissal or discontinuance of the plaintiff's suit, but on the facts of this case as shown by the record we do not think to so hold would prejudice rights of the appellant. It appeared that the state of Nebraska had brought suit to dissolve the Farmers' Merchants' Insurance Company, and for a receiver to wind up its affairs, on the ground that it was insolvent. It further appeared, from the judgment rendered in that suit, that a Nebraska court had determined that said Farmers' Merchants' Insurance Company was insolvent, and had appointed a receiver to take charge of and wind up its affairs.

The effect of the judgment under the laws of that state not having been shown, it should be presumed to be the same as it would be under the laws of this state, to wit, to dissolve the corporation. Article 1205, R.S. 1911. After it had been dissolved and its affairs placed in the hands of a receiver, the corporation could not be sued. It had ceased to exist. Thompson on Corporations, § 6718 et seq. It is apparent, therefore, that no right of appellant was prejudiced by the action of the court complained of. The motion is overruled.