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Charles Brown Grocery Company v. Wasson, &c.

pany, not alone to cover his traveling expenses, but was paid to him from month to month on the expectation that his compensation under the contract would equal the amount he received. This expectation was disappointed by the fact that a mistake was made in his account, and there were some bad debts or losses which cut down the profits. He did not receive the money as salesman or collector to hold it for the company, but it was evidently paid to him with the intent that he was to use as his own what was over and above his expenses. He furnished the company monthly a statement of his expenses, and it therefore knew every month just how much he was appropriating. He owed the company the amount he so appropriated over and above the salary that was coming to him under his contract, but the question is, are his sureties liable for the amount thus overpaid him by the company on account of his salary? The general rule is that a surety is not bound beyond the terms of his contract strictly construed, and that it can not be enlarged by implication to cover anything not in the contemplation of the parties at the time of its execu'tion. The condition of the bond recites that the company has employed Wasson to sell goods and collect for them, and obligates the signors that he shall faithfully perform his duties as salesman and collector, and account for everything coming into his possession or under his control in that capacity. It contains no allusion to adVances made by the company to him, and to make it include these would be to extend its terms beyond the fair meaning of the words used. The covenant is, in effect, that he will truly account for and pay over all money re. ceived by him as salesman and collector. It is no more than a guaranty of the honesty of the agent. But when

Charles Brown Grocery Company v. Wasson, &c.

the company advanced to him money to be used by him as his own, and to be repaid so far as it exceeded bis commissions when a settlement was made, a different liability was created. The sureties, by the terms of the bond, risked the integrity of the agent, but did not risk the uncertainties of the business and his ability to replace money he had spent as his own with the consent of the company; for their undertaking is that he will account for the money of the company coming to his hands as agent. The money sued for was not advanced to him to hold as the agent of the company, but it was intended he should use it as his own, and this he did with the consent of the company.

In Insurance Co. v. Lowenberg, 120 N. Y., 44 (23 N. E., 978), the suit was brought upon the agent's bond, the condition of which provided that the agent "shall keep true and accurate accounts of all business of said compapy intrusted to him, shall promptly pay to said company, or to such person or bank as the treasurer of said company may designate from time to time, all moneys of said company that may be received by him or come into his possession or control, and shall deliver all the property of said company that he may at any time receive or obtain control of, etc. It was agreed between the agent and the company that he should be paid for his services by a commission, and that he should be allowed to draw at the rate of $2,000 a year, payable monthly. At the end of the year any amount due him for commission should be paid to him, and any amount overdrawn by him should be returned to the company.

His commissions did not amount to $2.000, and suit was brought on the bond to recover for the overdraft. The sirety was held not liable. The court said:

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Charles Brown Grocery Company v. Wasson, &c.

“The defendant, as surety, may have been willing to undertake that Wolffsohn should faithfully discharge the trust reposed in him as such agent as to the money and property coming to his hands for which he would be criminally liable for misappropriation, when he would not be willing to become surety to pay his ordinary debts. Whilst the money sought to be recovered in this action was received by Wolffsohn in a fiduciary capacity, it was retained by him under the provisions of the agreement, which permitted him so to do, to apply upon his commission or salary; and the circumstances under which it was retained are such is to lead to the inference that it was within the contemplation of the parties that he should have the right to use and expend the same for the support of himself and family. The provisions of the contract requiring him to repay at the end of the year in case his commission did not amount to the sum so retained would make him liable for such amount as an ordinary debtor. He would not be liable for embezzlement or misappropriation in case of his inability to repay." The only difference between that case and this is that here the agreement as to the advances and the repayment by the agent of the excess was not expressly made; but it may clearly be implied from the circumstances and conduct of the parties, and the same principles must govern as in the case of an express contract. The rule was also applied in Insurance Co. v. Johnson, 120 Ill., 622, 12 N. E., 205, under a bond reading substantially as the one before us, and facts much the same. The court said: “The ironey advanced to their agent according to the averment in the declaration is outside of the terms of the written agreement. The legal effect of the bond of the sureties is that their principal should perform and observe all the covenants and undertakings contained in the written con

Charles Brown Grocery Company y. Wasson, &c.

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tract, but nothing beyond what may fairly be said to be within its terms." In like manner, where an agent for selling sewing machines made a settlement of his agency, turning over all machines and other property in his hands, but afterwards bought machines on his own account, giving his note for the price, his sureties were held not liable for the price of these machines. Phillips v. Machine Co., 88 Ill., 305. So, where the defendant was surety in a contractor's bond for the performance of his contract, which provided that he was to be paid by installments and one-fourth retained until the work was done, the plaintif made advances to the contractor not called for by the contract, and in excess of the work done by him. He having failed to complete the work, it was held that the surety was not liable for the advances beyond the amount of the work done, arcording to the terms of the contract. Warrer. Calvert, 7 Adol. & E., 143; Ryan v. Morton, 65 Tex., 258. In the case before us about $17 of the amount is for groceries sold to Wasson by the company for use in his family. His sureties are not responsible for this, or for the money advanced to him by the company on account of his commissions which he had not earned.

Judgment affirmed.
Whole court sitting.

Browinski, &c. v. Pickett, &c.



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Browinski, &c. v. Pickett, &c.

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Heid: Under Kentucky Statutes, section 2163, which secures a lier

to persons who furnish labor or materials in the erection of a
building, one who has furnished materials to a contractor, to
be used by him in the erection of a building for another, and
which have been so used, may, by filing his statement as re
quired by law', acquire a lien on the building, though the owner
may owe the contractor nothing, and though the materials were
purchased by the contractor in his own name, and not as agent of

the owner.

1. Appellants say the court erred in not adjudging that they had a lien on the real estate described for the full amount of $856.53 with interest from February 20, 1899 and costs.

2. The court erred in permitting appellee Barker's amended answer to be filed, over appellant's objection, without being verified.

3. The court erred in not rendering jupigment against both Pickett and Barker when they allege in their petition that they sold and delivered said materials to Pickett at the request of Barker and pray for judgment against both, and Barker does not deny said allegation in his answer.

The claim of the appellants is for material furnished by them to, and used by, the contractor. Pickett, in the erection of a building on real estate owned by Barker.

The court gave judgment against Pickett for the amount claimed and notwithstanding the pleadings and proof show that the contract price for the construction of the building in which said materials were used was $15,196.50, and every requirement of the statute to secure the lien had been duly complied with by

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