Universal Transport & Distributing Co. v. Cantu

This is an original application for a writ of mandamus to require the clerk of the district court of Karnes county to approve and file a supersedeas bond tendered by petitioner in cause No. 4010, which it seeks to bring to this court on appeal. The petition originally contained an application for mandamus to compel the clerk to deliver the transcript in the cause, but as the clerk, Mrs. Maude Pyle, has in her reply expressed her willingness to deliver the transcript upon terms acceptable to petitioner, it will not be necessary to consider this phase of the petition. The clerk, upon the request of petitioner, indorsed in writing on the bond her reasons for not approving it, which Indorsement is as follows: "State of Texas County of Karnes "This bond is not approved for the reason first, I do not think it is a good bond, and second, for the reason that plaintiffs would not be in any better position then they are now for the reason that the Commercial Standard Insurance Company is the company that has agreed by bond filed in the office of the Railroad Commission of Texas, Indemnity Company section to indemnify the Universal Transport and Distributing Company in the cases in which plaintiff has recovered judgment. "Witness my hand this 12th day of Feb. A.D. 1934. "[Signed] Maude Pyle "[Seal] District Clerk of the District Court of Karnes County, Texas." It is clear from this indorsement that the clerk had two reasons for not approving the bond. We will discuss them in the reverse order in which they appear in the indorsement. *Page 698 We think that the clerk's second reason for refusing to approve the bond is not well taken. It is true that the Commercial Standard Insurance Company was the carrier of the indemnity insurance for the Universal Transport Distributing Company, who is the appellant in this cause. The insurance company is not a party in any way to the suit, and is therefore competent to become a surety on this supersedeas bond. The other reason given by the clerk is that she does not think the bond is a good bond, and in her reply herein she, through her attorney, swears that she is very doubtful of the ability of the Commercial Standard Insurance Company to pay off the judgment in this cause. As we construe this statement, the clerk is at the present time refusing to approve this supersedeas bond because she is not convinced as to the sufficiency of the insurance company as a sole surety on the bond. This raises the question as to whether or not a clerk may exercise any discretion in approving a bond signed by a surety company having a permit to do business in Texas. If a clerk has discretion, then a writ of mandamus will not lie unless an abuse of discretion is shown. It is clear that, where personal sureties are offered, a clerk has the right to exercise discretion, and the burden of showing the sufficiency of the sureties is upon the party tendering the bond. Bean v. Polk (Tex.Civ.App.) 226 S.W. 1106. Therefore, unless this rule has been changed by the statutes which permit surety companies to qualify on such bonds, it is still the law in this state. Articles 496t and 4972, R.S. 1925, prescribe the privileges and duties of surety companies. We find nothing in these articles which would deprive an approving officer of all discretion in passing upon the sufficiency of a particular surety company to become surety on a particular bond. In fact, if the statutes did contain any such provision, it would be unconstitutional. In 21 R.C.L. p. 1159, § 198, we find: "It has been held that a statute providing that any foreign surety company complying with certain requirements shall be accepted as sole surety on any bond required or permitted by law is unconstitutional in so far as it purports to control the discretion of the court in accepting or rejecting any given company as surety, as it is essentially a judicial function to determine whether the surety offered is good and sufficient" — citing State v. Robins, 71 Ohio St. 273, 73 N.E. 470, 69 L.R.A. 427, 2 Ann.Cas. 487; Matter of Keogh, 22 Misc. 747, 50 N.Y.S. 998; 50 C. J. p. 320, § 540. If this is the correct rule as to foreign companies, of course, it is the rule as to domestic companies. We conclude that, when a clerk is called upon to approve a supersedeas bond, as provided in article 2270, R.S. 1925, he is required to exercise discretion as to whether the surety, or sureties, are good and sufficient, and this is true whether the surety is an individual or a surety company. The next question presented is, Did relator discharge the burden resting upon it to show the surety offered to be good and sufficient? It did not. Article 4939, supra, provides, among other things, as follows: "Each corporation, making or offering to make any bond under this article, shall publish in some newspaper of general circulation in the county where such company is organized or has its principal office on the first day of February of each year, a statement of its condition on the previous thirty-first day of December, showing under oath its assets and liabilities. A copy of said statement shall be filed with the Commissioner before the 1st day of March of the year following. * * *" The record before us does not show that the Commercial Standard Insurance Company has published such a statement as of December 31, 1933, nor that a copy of same has been filed with the commissioner of insurance. The record does not show that such a statement was furnished to the clerk at the time the approval of the bond was sought. If such a statement has been made and published by the insurance company, it would have been an easy matter to have presented a copy of same to the clerk and attached same to the petition filed herein. The petition does not show an abuse of discretion by the district clerk, and the petition for mandamus will accordingly be refused.