State ex rel. Beaman v. National Surety Corp., 210 N.C. 126 (1936)

May 20, 1936 · Supreme Court of North Carolina

210 N.C. 126

STATE OF NORTH CAROLINA, on Behalf of WILLIAM CHARLES BEAMAN, and WILLIAM CHARLES BEAMAN, Individually, v. NATIONAL SURETY CORPORATION, a Corporation; MORDECAI VANN, Guardian of WILLIAM CHARLES BEAMAN; MORDECAI VANN, Individually; FANNIE VANN, Bondsman; FANNIE VANN, Individually; HENRY VANN, Individually; HENRY VANN and I. M. VANN, Executors of the Estate of A. VANN, Deceased, and GURNEY P. HOOD, Commissioner of Banks of the State of North Carolina.

(Filed 20 May, 1936.)

Guardian, and Ward H a — Second guardianship bond held in substitution of first, and bonds were not cumulative under facts of this case.

The findings of fact, supported by evidence, were to the effect that, upon the refusal of the clerk to issue letters-of guardianship prior to the filing of the statutory bond, applicant filed a bond with an individual surety pending the filing of a bond by a corporate surety, the individual surety being the local agent of the corporate surety, that thereafter bond with the corporate surety was duly filed before any funds were placed in the hands of the guardian, and that thereupon the clerk made a notation on the original bond to the effect that the individual surety was released therefrom upon the filing of the bond with the corporate surety. It further appeared that the corporate surety alone received the premium for the bond, and that upon the later insolvency of the corporate surety, its successor corporation filed an assumption agreement of record. Held: The release of the individual surety appearing of record at the time of the filing of the assumption agreement by the successor corporate surety, the successor corporate surety is alone liable on the bond and is not entitled to contribution from the individual signing the original bond, the bonds not being cumulative, but the corporate surety bond being substituted for the individual surety bond to the knowledge of the successor corporate surety.

Appeal by tbe National Surety Corporation from Barnhill, J., at October Term, 1935, of SampsoN.

Affirmed.

Tbis is an action brought by plaintiffs to recover from defendants Mordecai Vann, guardian of William Charles Beaman, and his surety, the National Surety Corporation, for certain amounts alleged to be due them. The matter was referred to Hon. Charles Gr. Rose, referee, who heard the evidence, found the facts, and on the facts made conclusions of law. The matter came on for hearing before Barnhill, J., who found certain supplemental facts. The material facts necessary to be considered are:

The referee found the following facts:

“On 22 January, 1931, Mordecai Vann applied to the clerk of the Superior Court of Sampson County, North Carolina, for appointment as guardian of William Charles Beaman, minor son of Llewellyn Bea-man, . . . and the value of the estate of the minor was stated to be about five thousand ($5,000) dollars. . . . The guardian, Mordecai Vann, as principal, and his sister, Fannie E. Vann, as surety, on 22 January, 1931, signed the usual form of guardian bond in the penal sum of five thousand ($5,000) dollars (duly justified).

“At the time the application for letters of guardianship was made, the guardian and Fannie E. Vann (who was local agent of the National Surety .Company), requested that the letters be issued pending the return from New York of a corporate bond to be signed by that company as surety. John B. Williams, the then clerk of the Superior Court of said county, declined to issue the letters until the bond of the guardian was actually signed and filed in his office. Thereupon, the bond was signed, and, at that time, the guardian and Fannie E. Vann understood that, when the corporate bond was filed, Fannie E. Vann would be released as surety on the bond which she signed.

“On 28 January, 1931, a corporate bond as guardian of Charles Bea-man in the penal sum of five thousand ($5,000) dollars, signed by the National Surety Company of New York, as surety, . . . was filed with and accepted by the clerk of said court. . . . On said date Annie Ferrell, assistant clerk of said court, made the following entry on the margin of the record: ‘A surety bond having been this day filed by M. Vann, as Gdn. for Chas. Beaman, Fannie E. Vann is hereby released from said bond. This 28 January, 1931. (s) Annie Ferrell, Ass’t. CSC.’

“Subsequent to 28 January, 1931, and prior to 1 May, 1933, the National Surety Company, the surety on the guardian’s bond, was declared insolvent, and on or about 1 June, 1933, the defendant National Surety Corporation, through Fannie E. Vann, as agent of the corporation, filed with the clerk of the Superior Court an Assumption of liability certificate,’ which document, together with what purports to be the letter of transmittal signed by Harry N. Levy, manager, was attached to the page in the Guardian Book No. 5, containing the original bond. . . . Reference is made to the original record for the exact terms of the Assumption of liability certificate.’

“After the guardian bond was signed by Fannie E. Vann, . . . Harry N. Levy, agent and attorney in fact of the National Surety Company, and now manager of the National Surety Corporation, had knowledge and notice that Fannie E. Vann, local agent of the surety company, had individually signed the guardian bond as surety until the guardian bond signed by the National Surety Company was returned properly executed.

“When the Assumption of liability certificate’ was signed by the National Surety Corporation, the said corporation, through its local agent and Harry N. Levy, manager, bad knowledge and notice that tbe clerk of tbe Superior Court bad made tbe entry on tbe margin of tbe record as set out in Finding Number Four, purporting to relieve Fannie E. Yann as surety from further liability on tbe bond executed by bel-aud dated 28 January, 1931.

“Tbe National Surety Corporation, having voluntarily become surety on tbe guardian bond, . . . bad notice of tbe facts appearing on tbe records in tbe office of tbe clerk of tbe Superior Court of Sampson County, and which would have been disclosed upon proper examination of tbe same.”

Supplemental findings by tbe court below: “That tbe guardian did not receive any amount prior to tbe entry upon tbe guardianship records in tbe clerk's office undertaking to cancel tbe bond signed by Fannie E. Yann and all receipts were subsequent to tbe date of tbe filing of tbe bond by tbe National Surety Company, tbe first receipt being on 10 March, 1931. . . . Tbe bond signed by Fannie E. Yann was signed for tbe temporary purpose, as found by tbe referee, and tbe bond of tbe National Surety Company when filed was not cumulative, but in substitution of tbe Fannie E. Yann bond, and she was thereupon discharged from further liability.”

In tbe judgment is tbe following: “From tbe findings of facts by tbe referee, as modified and supplemented by tbe foregoing findings by tbe court and conclusions of law, tbe court is of tbe opinion that tbe plaintiff is entitled to recover judgment according to tbe above findings of facts and conclusions of law. It is thereupon considered, ordered, and adjudged that tbe plaintiff State of North Carolina, on behalf of William Charles Beaman and William Charles Beaman, individually, do recover for tbe use of William Charles Beaman from tbe defendants Mordecai Yann, guardian, tbe National Surety Corporation, on account of and for tbe full amount of said assumption certificate, to wit: Tbe sum of $5,000, to be discharged upon tbe payment into court of tbe sum of $3,252.43, with interest thereon from 3 January, 1934, at six per cent per annum, together with tbe costs of this action to be taxed by tbe clerk.”

Tbe National Surety Corporation excepted and assigned error as follows:

“(1) For that bis Honor held that tbe bond signed by Fannie E. Yann was signed for a temporary purpose, and that tbe bond of tbe National Surety Company, when filed, was not cumulative, but in substitution of tbe Fannie E. Yann bond, and she was thereupon discharged from further liability, and this error constitutes tbe defendant’s First Exception.

“(2) For that tbe court held tbe National Surety Corporation liable for the payment of tbe sum of thirty-two hundred fifty-two and 43/100 ($3,252.43) dollars, with, interest from 3 January, 1934, and did not hold that Fannie E. Yann was jointly liable with it for said amount. This is the Second Exception.”

Ya/rser, McIntyre & Henry for Fannie F. Yann.

Graham & Grady and Shepherd & Shepherd for National Surety Corporation.

Clarkson, J.

For the determination of this controversy, we think that the only question involved on this appeal is whether Fannie E. Yann is jointly liable with the National Surety Corporation and contribution arises in this case between said corporation and Fannie E. Yann. We think not, under the facts and circumstances of this case.

The National Surety Corporation cites the cases of Jones v. Hays, 38 N. C., 502; Comrs. of Brunswick v. Inman, 203 N. C., 542; and Thornton v. Barbour, 204 N. C., 583. We think those cases have no application to the facts in the present action.

In Roebuck v. Carson, 196 N. C., 612 (614), citing authorities, it is said: “Parol evidence is admissible to show that the contract was delivered upon condition precedent, or that the obligation was not to be assumed at all except upon certain contingencies.” Insurance Co. v. Morehead, 209 N. C., 114. For a decision of this controversy we do not base our opinion bn these authorities, as the bond was an official one.

On the facts in this case, the plaintiffs are not contending that Fannie E. Yann is liable on the purported bond signed by her, but this is a controversy between the National Surety Corporation and Fannie E. Yann. The National Surety Corporation claiming from Fannie E. Yann contribution — one-half of what it has to pay for the default of the guardian.

The facts are to the effect that Fannie E. Yann was the local agent of the National Surety Company, and signed the guardian bond for $5,000, conditionally, on 22 January, 1931. On 28 January, 1931, the National Surety Company filed a $5,000 bond as surety for the guardian, with the knowledge that “Fannie E. Yann is hereby released from said bond — this 28 January, 1931.” It received the premium on the $5,000 bond and became liable for the amount on default of the guardian, and does not on this appeal deny its liability. The guardian did not receive any funds until 10 March, 1931 — long after the record discloses Fannie E. Yann was relieved from the bond, with the understanding when the corporate bond was filed. Thereafter, when the National Surety Company became insolvent and was taken over by the National Surety Corporation, and assumed the liability of the National Surety Company on the bond, all these facts were known to it: That Fannie E. Yann bad signed tbe bond temporarily and on condition, and tbe release as to her on tbe bond and tbe substitution of tbe National Surety Company. It goes without saying- that no court of equity would allow a recovery by tbe surety corporation against Fannie E. Yann, under tbe facts here disclosed — it would be inequitable and unconscionable. Tbe National Surety Corporation, successor to tbe National Surety Company, alone received tbe premium for its liability and alone is answerable for tbe default of tbe guardian, in accordance with its contract.

For tbe reasons given, tbe judgment of tbe court below is

Affirmed.