Syar v. United States Fidelity & Guaranty Co.

TUTTLE, J. Plaintiffs seek to recover damages for breach of contract. At the close of their case, a motion for nonsuit was granted, and this appeal is prosecuted from judgment of dismissal thereafter entered.

The following statement of the facts is made in view of the well-known rule that on a motion for nonsuit, every favorable inference fairly deducible and every favorable presumption fairly arising from the evidence must be considered facts proved in favor of plaintiff; contradictory evidence must be discarded and the evidence weighed in the light most favorable to plaintiffs’ claim. Relevant evidence even erroneously admitted must be given the credit and benefit of its full probative strength. The reporter’s transcript contains several hundred pages, and it is obviously impracticable to set forth all of the evidence adduced upon the part of plaintiffs.

At the time in question, E. Carl Langguth and Harold W. Moore were licensed under the law as resident or local agents of respondent, at Yuba City, California, with the power to write and issue notarial and judicial or court bonds and undertakings. They were also authorized to solicit (but not write or issue), other bonds and undertakings, including contract bonds of the character involved in this action. Defendant is a corporation authorized under the laws of the State of California to transact a surety business and issue surety bonds. It maintained a branch office in San Francisco, which was managed by Edwin Porter. The latter was also a vice-president of defendant. Ernest Copeland was superintendent of its bond department in San Francisco. Early in [529194]0, Langguth had a conversation with plaintiff Syar, in which the latter stated that he might bid upon a state road contract, which required a bond for faithful performance upon the part of the successful bidder. Langguth thereupon solicited the writing of such bond. Later, Porter visited Yuba City, and informed Langguth that respondent would bond Syar for $25,000. They also discussed the matter of securing plaintiff through an indemnity bond issued by the other plaintiffs. Porter expressed doubt as to whether a $25,000 bond would be sufficient. On April 25, Langguth wrote Copeland, enclosing Syar’s financial statement, and stating that a further and complete statement would be furnished later. He recommended in the letter that the bond be issued. Langguth testified as follows, concerning a conversation had with plaintiff Rose: “Mr. Rose asked me if the Company would issue it (the bond) and I said, yes, we would.” On the morning of April 24, the date when the bids were opened, Langguth met plaintiffs at the office of defendant Oil & Burner Company. He had been previously advised by Syar that the latter company was willing to act as indemnitor. At that time Langguth testified that he had told plaintiff Rose, the defendant was going to issue a bond, stating, “definitely, we will bond you.” When the bids for the work were opened, that of plaintiff Syar was lowest. Syar had delivered to the State of California a certified check in the sum of $5,600. The bid was accepted, and the highway construction contract was awarded to Syar. On April 26th, but under date of April 24th, Langguth wrote the following letter to Syar: