Walsh v. Colquitt

Warner, Chief Justice.

This was an action brought by the plaintiff against the defendants on a bond executed by them in the sum of $10,000.00, signed by Alston, as principal, and by Walsh and Adair, as securities, conditioned for the faithful performance by Alston of the duties of public printer of the state. The alleged breach of the bond is that Alston had received $5,000.00 under a resolution of the general assembly, and had failed to account for the same, and had appropriated it to his own use, etc., and that Alston was further liable in the sum of $3,000.00 as liquidated damages. The securities pleaded that the plaintiff, after the default of said Alston, had paid him $15,000.00 without deducting said debt, with full knowledge of his insolvency, whereby the said secureties became released, and further, that by reason of the advance of the said $5,000.00 before the same was due to said Alston under his contract for work done by him as public printer, the risk of the defendants as his securities was increased, and they were thereby exposed to greater liability to loss. Alston having died pending the suit, an order was taken suggesting his death and that the cause proceed against the other two defendants; thereupon they pleaded to the jurisdiction of the court on the ground that neither of them resided in the county of DeRalb, in which the suit was instituted. The plea was overruled. The jury, under the charge of the court, found a verdict for the plaintiff for $2,500.00, principal, and $641.66, for interest. A motion was made for a new trial on numerous grounds, which was overruled, and the defendants excepted.

1. There was no error in overruling the plea to the jurisdiction of the court.

2. It appears from the record that Alston was elected public printer in January, 1875, and his bond was executed January 30th, 1875, and he was to enter on the discharge of his duties the first day of the next session of the general assembly.

On the 19th of February, 1876, the general assembly passed a resolution authorizing the treasurer to advance to the public printer, the. sum of $5,000.00 in part payment of the public printing for the present session. The condition of the bond is “ that if the said Alston shall well and faithfully do and perforin all and singular the duties prescribed by the laws of Georgia appertaining to said office of state printer for and during the terra for which he has been elected, then this bond or obligation to be void,” etc. The laws of Georgia prescribing the duties of public printer are to be found in the following sections of the Code, to-wit: 1022, 1023, 1026, 1027, 1028, 1029, 1031, 1033 and 1034, as to the time and manner in which he was to be paid for his services, that is to say, he shall be paid twenty-five per cent, on the actual cost of the material and labor employed in the public printing, provided that before being paid' therefor, he shall make out an account on oath, of the actual cost of the material and labor employed, stating that said account is correct and just, and that the prices paid are not above the customary rates for similar work and material when employed in the service of private parties to do a like amount of printing. Thus stood the law at the time the bond was executed by the defendants on the 30th of January, 1875, as to the time and manner of the payment of the public printer for his services as such, and the question is, whether the resolution of 1876, authorizing the treasurer to pay him $5,000.00, in advance of the performance of any work done by him as public printer, was such a change of the natirre of the contract as amounted to a novation without the consent of the sureties and discharged them under the provisions of the 2153d section of the Code? In our judgment it was such a change of the contract as would discharge the sureties if done withoivt their consent. The securities might have been willing to stand for their principal when he was to perform his duties and be paid therefor, as prescribed by law, that is to say, when he had done the work, but not willing to stand for him and be responsible for $5,000.00 advanced to him before he had done any work as public printer, to be used by their principal as he might think proper. The advance of $5,000.00 to Alston, their principal, before he had done any work for the state as public printer, was an inducement to him not to do it, and thereby calculated to injure his sureties. The consent, of the sureties to the advance of the $5,000.00 may be proved either by direct evidence, or by indirect or circumstantial evidence tending to prove that fact.

3. It appears from the evidence in the record that Alston, the principal in the bond, was insolvent, and it further appears from the evidence of Treasurer Renfroe, that in May, 1877, Governor Colquitt presented to him a check drawn in favor of the United States treasurer in Washington on the United States treasurer in blew York, dated 28th of April, 1877, for one hundred and ninety-eight thousand and twenty-eight dollars and fifty eight cents, payable at sight to the order of Alfred BL Colquitt, governor of Georgia, and stated to him (the treasurer) that $152,278.24 was to be paid into the ti’easux*y of the state, and that the balance he would reserve to pay attorneys’ fees for which the check was liable. The $152,278.24 was deposited in the treasury, but does not know what becaxne of the balance only from hearsay. Governor Colquitt testified that in 1876 the Atlanta Ilerald, in which Alston was interested, was sold out for debt, and that Alston was much pressed for money, that in May, 1877, he, as the governor of the state, paid for the use of Alston about $15,000.00 for a fee due to him as one of the attorneys for the state in the case of The State of Georgia vs. The United States.

The 2154th section of the Code declares that “ any act of the creditor, either before or after judgment against the principal, which injures the surety or increases his risk, or exposes him to greater liability, will discharge him.” In the case before us, the state was the creditor of Alston, who was insolvent, and the defendants were his sureties for his indebtedness to the state. The whole amount of the money dxxe on the check hereinbefore described was the property of the state, the governor being the duly authorized agent of the state to receive the same for the purpose of paying it into the treasxxry, where the whole of it appropx-iately belonged under the laws of the state. The governor recognized the fact that the money belonged to the state, and that he was only the agent for the state in its collection, by paying into the state treasury the sum of- $152,278.24 of the amount received by him. If the governor had paid the full amount of the money received by him into the treasury of the state, as the law contemplates he should have done, and Alston had presented his claim against the state and the same was justly due him, the state would have paid him, less the amount that he was due the state; the state, as a creditor of Alston, would have been bound to have retained enough out of what was .due him for the protection of the state’s interest, as well as for the protection of his sureties, he being insolvent. The principle is not changed by the fact that the governor, who was the agent of the state, withheld a part of the money from the treasury and paid it to Alston without deducting Alston’s indebtedness to the state; the money in the governor’s hands was the money of the state all the same, and if the governor, as the authorized agent of the state, had an amount of its money in his hands due to Alston by the state of a greater amount than Alston’s indebtedness to the state, and paid the same over to Alston without deducting therefrom what Alston owed the state, that would have been such an act on the part of the creditor by its authorized agent, the governor, as would injure the sureties of Alston by increasing their risk, and exposing them to greater liability, Alston, their principal, being insolvent. In our judgment, the charge of the court in relation to this point .in the case, as set forth in the record, was error. There are but two main controlling questions in this case, although there are fifty assignments of error. Eirst, were the defendants, as sureties, discharged by the change and novation of the contract, without their consent, under the provisions of the 2153rd section of the Code? Second, were the sureties discharged under the provisions of the 2154th section of the Code % As we grant a new trial in this case on the defendants’ motion therefor, we express no opinion as to the grounds contained in the plaintiff's motion for a new trial, both cases having been argued together here.

Let the judgment of the court below be reversed.