Huson v. Richard B. Brown, Inc.

Greenbaum, J. Section 284 of the Agricultural Law provides that every applicant for a license to do business as a commission merchant in farm produce shall, before the issuance thereof, “ execute and deliver to the commissioner of agriculture a fidelity bond, with . [176] satisfactory sureties, in the sum of three thousand dollars to secure the honest accounting to the consignor of the moneys received by such commission merchant from the sale of farm produce sold on commission,” and that an action may be maintained upon such bond by the commissioner of agriculture. The bond here sued upon is a sealed instrument executed by the defendant Bichard B. Brown, Inc., as principal and by the defendant Massachusetts Bonding and Insurance Company as surety. It provides that the defendants “ are held and firmly bound unto the People of the State of New York in the penal sum of $3,000 * * * well and truly to be paid to the said People of the State of New York or their legal representative, attorney or assigns,” and recites that it is given pursuant to statute above quoted. The defendant insurance company contends, relying upon the rule that none but the parties named in a sealed instrument may sue thereon, that this action is not maintainable by the commissioner of agriculture, since the bond does not run to him as the statute apparently pre^ scribes. This rule, however, is not inflexible. Thus it has been held that a town may sue upon a bond, under seal, given for its benefit, although not a party thereto. Dyer v. Covington Township, 28 Penn. St. 186; Hopkins v. Town of Plainfield, 7 Conn. 286. In my view this rule has no application to the situation here presented. The bond in question recites that it was given pursuant to a public statute which expressly authorises a suit thereon by the commissioner of agriculture. He is charged with the enforcement of the statute under which the bond was given, and is simply performing a duty required of him by law as representative of the people of the state of New York. Beading the statute into the bond, it is clear that the defendant insurance company must be deemed to have assented to an action thereon by the commissioner of agriculture. Indeed, [177] the bond itself binds the surety to pay the amount thereof to the people “ or their legal representatives,” and in my opinion, under this language, the commissioner should be deemed the legal representative of the people and vested with the right to sue upon the bond. The act does not provide that the bond shall run to the people of the state, and to adopt the construction contended for by defendant might require the holding that the bond executed by defendant is unenforcible, thus practically operating as a fraud upon the people of the state and those who may have consigned produce upon the faith of the bond. The defendant insurance company also contends, relying upon " section 282 of the Agricultural Law, that plaintiff has failed to prove that the produce consigned to its principal was not sold for consumption. The evident purpose of this section was to relieve merchants and others engaged in selling produce for consumption from the necessity of obtaining a license and complying with the other requirements of the statute. It must be assumed that the defendant R. B. Brown, Inc., in applying for a license, indicated its intention to conduct the business of receiving and selling farm produce for resale, and if the particular consignments in question were sold by it for consumption, and therefore outside the general business for which it was licensed, the burden of proving that fact rested upon the defendant. The defendant surety also attacks the constitutionality of the statute, but its principal, R. B. Brown, Inc., by giving the bond and receiving produce as a licensed commission merchant, has effectually waived its right to raise this question, and as surety defendant stands in no better position than its principal. Musco v. United Surety Co., 196 N. Y. 459. It follows that a verdict must be directed in favor of the plaintiff. Judgment accordingly.