Illinois Surety Co. v. Maguire

Tbe following opinion was filed February 24, 1914:

Tbe trial court appears to have reached its. conclusion that defendant was not liable because she was entitled to demand that all tbe requirements necessary to create-a liability on tbe plaintiff’s bond to tbe firm be complied with in order to render her liable; and that since no message by telegraph or registered letter was sent and no itemized claim was filed as required by plaintiff’s bond, there was no liability shown on its part, and hence none on her part. Whether or not such conclusion is correct depends upon the meaning of the contract sued upon, and particularly upon that part thereof which reads, “hereby admitting that the vouchers or other proper evidence showing payment by said guaranty company of any such loss, damage, or expense shall be conclusive evidence (except for fraud) against me and my estate of the fact and amount of my liability hereunder to said guaranty company.”

Plaintiff showed a prima facie case of loss in the amount of $500 resulting from the larceny or embezzlement of Ma-guire. It showed payment of such loss by a check, by a receipt, and by a release, either of which constituted a “voucher”' showing payment within the meaning of the contract. It also showed payment by the oral testimony of a member of the firm of W. A. Alexander & Company. This testimony was “other proper evidence” showing payment by plaintiff within the meaning of the contract-. If the provision of the contract referred to is valid, the plaintiff made out a case showing absolute liability on the part of defendant, unless it was impeached for fraud. That parties to a contract may *54effectively provide for tbe kind or quantum of lawful evidence necessary, in tbe absence of fraud, to conclusively establish a fact, cannot be doubted. Guarantee Co. v. Pitts, 78 Miss. 837, 30 South. 758; American B. Co. v. Alcatraz C. Co. 202 Fed. 483. But it is argued on tbe part of tbe defendant that tbe plaintiff, by waiving essential provisions in its bond to tbe firm, released- her from liability. This would perhaps be so if she were a mere surety on that bond. Her liability, however, springs from an independent contract, and its provisions, in so far as they are lawful, control. By that contract she agreed that tbe fact of her liability and tbe amount thereof should be, except for fraud, conclusively •established against her by vouchers or other proper evidence showing payment of loss by the guaranty company. The reason and reasonableness of such a provision are apparent. It is to obviate the necessity of litigating the question of plaintiff’s liability on its bond, unless such liability is questioned on the ground of fraud, and to relieve the plaintiff from the necessity of proving every fact essential to show liability in •order to make out a prima facie case.

The argument that fraud is shown by the evidence because •of the waiver of certain requirements in plaintiff’s bond, and the lack of indorsement of the check by the C'entral Trust Company of Illinois, is not tenable. The evidence of a loss by W. A. Alexander & Company and of the payment of $500 by plaintiff is clear and satisfactory and cannot be overcome by such mere alleged suspicious inferences. Fraud must be established by clear and satisfactory evidence. The right of plaintiff, in the absence of fraud, to waive the provisions referred to in its bond with the firm, is one the defendant cannot question under her contract with it, since she agreed that, in the absence of fraud, her liability should attach upon proof of payment of loss by plaintiff. No fraud was-shown. It follows that the trial court erred in its conclusion that defendant was not liable.

*55By the Gourt. — Judgment reversed, and cause remanded with directions to enter judgment for plaintiff.

A motion for a rehearing was denied, with $25 costs, on May 1, 1914.