Opinion
No. 41027.
February 16, 1959.
1. Estoppel — principal and surety — attorney's fees — surety estopped as against principal from claiming right to reimbursement for attorney's fees paid law firm for preliminary investigation work.
Where application for official bond provided for agreement on behalf of principal that he would reimburse surety for any and all legal expenses incurred by surety in consequence of executing bond, and after suit was brought against principal and surety, surety wrote letter to principal stating that surety expected reimbursement for all sums paid by surety in protecting interests of surety or principal and that principal could either retain law firm which had done the preliminary investigation on behalf of surety or an attorney of his own choice to defend action, and principal retained his own attorney who successfully defended suit, surety was estopped after trial from claiming right to reimbursement for attorney's fees paid law firm who had done the preliminary investigation work.
2. Estoppel — what constitutes.
Where party to transaction induces another to act on reasonable belief that he had waived or will waive certain rights which he is entitled to assert, he will be estopped to insist on such rights to prejudice of one misled.
3. Trial — estoppel — failure to give an instruction on doctrine of estoppel not fatal to affirmance of jury verdict in favor of defendant where facts justified finding of plaintiff's estoppel.
Where facts justified finding of plaintiff's estoppel, fact that defendant did not request and Trial Court did not give an instruction on doctrine of estoppel, was not fatal to affirmance of jury verdict in favor of defendant.
4. Trial — jury had right to determine issues made by pleadings and evidence notwithstanding no instructions given on issue — appellate review of failure of successful party to so instruct jury.
Jury had right to determine issues made by pleadings and evidence notwithstanding fact that no instructions are given on the issue, and if pleading and evidence justify a result reached by jury, Supreme Court will not reverse for failure of successful party to have the jury instructed on the issues.
5. Estoppel — doctrine not to be invoked unless all elements of estoppel are present.
"Estoppel" weighs and considers conduct of men and their dealings with each other and gives that effect and meaning to their actions which common sense and justice dictates, but doctrine may not be invoked unless all elements of estoppel are present.
Headnotes as approved by Gillespie, J.
APPEAL from the Circuit Court of Washington County; ARTHUR JORDAN, J.
Robertshaw Mansour, Greenville, for appellant.
I. The proof in this record and the appellee's admissions conclusively establish the fact that the appellee contracted to reimburse the appellant for expenses and attorney's fees incurred in defense of the Nichols suit. The verdict of the jury establishes the contractural liability of appellee to appellant, and in the absence of any showing that the attorney's fees were unreasonable or arbitrary, the appellant is entitled to recover the entire amount sued for. Carroll County v. Shook, 216 Miss. 263, 62 So.2d 311; Indianola for the use of Kirkpatrick v. Love, 227 Miss. 156, 85 So.2d 812; Nichols v. Vandevender, 223 Miss. 852, 79 So.2d 271; Stone-Lowe Cotton Co. v. Weil Bros., 129 Miss. 60, 91 So. 859.
II. The sole issue submitted to the jury under instructions for both the plaintiff and defendant was whether or not a contract existed between the appellant and appellee, and whether or not the costs, damages, attorney's fees, expenses were incurred by appellant in consequence of the execution of the bond.
Webb Webb, Greenville, for appellee.
I. The original contract between appellant and appellee was amended or altered by the language contained in appellant's letter of May 18, 1954, which was so ambiguous in its terms as to require extrinsic evidence to determine the real contract and this extrinsic evidence was conflicting to the extent that interpretation of the true intention of the parties involved a jury issue. Keyser v. Kemper (Md.), 146 A. 275; Latz v. Van Heynigen Brokerage Co., 199 Ala. 620, 75 So. 284; Loper v. Yazoo M.V.R. Co., 166 Miss. 79, 145 So. 743.
APPELLANT IN REPLY.
1. The appellee is confined on appeal to the position he assumed in the trial court. This Court has repeatedly held that a party is confined on appeal to the theory under which his case was presented to the jury. Gulf, M. N.R. Co. v. Madden, 199 Miss. 374, 200 So. 119; Picard v. Waggoner, 204 Miss. 366, 37 So.2d 567; Williams v. Lumpkin, 169 Miss. 147, 152 So. 842.
II. The facts in the record do not support the appellee's contention that appellant waived its right to reimbursement through an amendment of the contract. Nichols v. Vandevender, 223 Miss. 852, 79 So.2d 271.
III. The letter of May 18th, following appellee's own argument, would be ineffective to constitute an amendment of the contract contained in the bond application. 12 Am. Jur., Contracts, Sec. 21.
Appellee, Leonard G. Vandevender, applied to appellant, National Surety Corporation, for a constable's bond, the application containing the following agreement on the part of appellee:
"(b) To indemnify Surety, its successors and assigns, against all loss, liability, costs, damages, attorney's fees and expenses which Surety shall sustain or incur in consequence of executing the bond herein applied for, or any renewal thereof, or any bond in behalf of the undersigned, in making any investigation on account of such bond, in prosecuting or defending any action that may be brought in connection therewith, or in enforcing any of the agreements herein contained . . ."
The bond was executed by appellant as surety and appellee as principal, and while it was in effect, W.D. Nichols sued appellee and appellant demanding judgment for $7,500 against appellee, and $2,000, the amount of the bond, against appellant. Nichols alleged in his suit that appellee assaulted him while acting as constable. After appellee and appellant were summoned in the Nichols suit, appellant wrote appellee the following letter:
"Dear Mr. Vandevender:
"National Surety received notice of suit filed against you on behalf of W.D. Nichols, and after reviewing the matter determined that suit is filed against you personally, in the amount of $7,500.00 and against National Surety Corporation in the amount of your bond, which is $2,000.00.
"Please accept this letter as notice that National Surety Corporation expects you to defend this suit at your expense and should any expenditures be made by National Surety in investigating, defending, or otherwise protecting your interest and National Surety's interest, you will be expected to reimburse National Surety Corporation for same.
"This point is stated in your Public Official Bond Application wherein it is stated the undersigned, for himself, his heirs, executives, administrators, hereby agrees with National Surety Corporation, hereinafter called Surety: — (b) to indemnify the surety, its successors and assigns against all loss, liability, costs, damages, attorney's fees and expenses which the surety shall sustain or incur in consequence of executing the bond herein applied for or any renewal thereof of any other bond on behalf of the undersigned, in making any investigation on account of such bond, in prosecuting or defending any action that may be brought in connection therewith or with enforcing any of the agreements herein contained.
"This matter was referred to Attorneys Wynn, Hafter, Lake Tindall in Greenville, Mississippi, for review to determine various rights of parties involved. You may if you wish have these attorneys continue in defending this suit on your behalf or you have the option of retaining other attorneys of your own choice.
"National Surety Corporation does, however, retain the right to have counsel assist at any time in defending this action."
Sometime after the receipt of this letter, the exact sequence of events not appearing in the record, appellee employed and paid B.B. Wilkes, an able and experienced attorney, to defend the Nichols suit. He also conferred with J.A. Lake, a member of the law firm of Wynn, Haftter, Lake Tindall, along with Wilkes, in preparing the suit for trial. Wilkes and Lake worked together in successfully defeating the claim of Nichols in the circuit court. Nichols appealed to this Court and the case was affirmed. No one ever suggested to appellee that he would be expected to pay the fee charged by Wynn, Hafter, Lake Tindall until after the Nichols case was terminated in this Court. Lake told appellee that he was representing appellant. Appellee never employed Wynn, Hafter, Lake Tindall. Appellant did.
After the Nichols suit was terminated, appellant paid Wynn, Hafter, Lake Tindall $1,000 attorneys' fee and $81.20 expenses in connection with the defense of the Nichols suit. The record shows without dispute that this fee was reasonable. The present suit was brought in the county court by appellant against appellee to recover said sum of $1,081.20 under the indemnity agreement mentioned above. The jury in the county court returned a verdict for appellant for the sum of $81.20, the amount of expenses in the Nichols suit, as to which expense there is no dispute between the parties. Appellant appealed to the circuit court where the county court judgment was affirmed. Appellant now appeals to this Court seeking judgment for the full sum sued for.
(Hn 1) We assume that, except for the question of estoppel, hereinafter discussed, appellant was entitled to reimbursement from appellee of all reasonable sums paid out by it in good faith in defending the Nichols suit, including fees for attorneys of appellant's choice. We are of the opinion that under the evidence and all reasonable inferences to be drawn therefrom, the finding was justified that appellee, judged by the standard of a reasonable and prudent man, believed that under the directions contained in the letter of May 18, 1954, mentioned above, if he employed either the firm of Wynn, Hafter, Lake Tindall, or, at appellee's option, other attorneys of his choice, to defend the Nichols suit, his obligation to appellant under the indemnity agreement would be fulfilled as far as attorneys' fees were concerned. This constituted, in legal contemplation, a waiver on the part of appellant to claim reimbursement for attorneys' fees charged by attorneys other than the one chosen by appellee. This waiver was gratuitous and would not have been binding on appellant had not appellee acted in reliance thereon; but appellee did act on the waiver by employing and paying Wilkes to defend the Nichols suit, and appellant could not later withdraw the waiver except to the prejudice of appellee, by requiring him to pay for the services of two attorneys to defend the same suit. There was no conflict of interest between appellee and appellant in the defense of the Nichols suit. This brings the case within the doctrine of equitable estoppel by waiver, which is available in the law courts.
(Hn 2) Where a party to a transaction induces another to act on a reasonable belief that he has waived or will waive certain rights, which he is entitled to assert, he will be estopped to insist on such rights to the prejudice of the one misled. 31 C.J.S., Estoppel, Section 108, page 344.
The letter of May 18, 1954, in its first paragraph, advised appellee of the Nichols suit. The second paragraph of the letter put appellee on notice that appellee was expected to defend the suit at appellee's expense. The balance of the letter, except the next to the last paragraph, set forth the rights that appellant had under the indemnity agreement. These rights were set out in general terms in contrast to the specific terms contained in the next to the last paragraph where appellee was told that he would have the option of employing Wynn, Hafter, Lake Tindall, or attorneys of his choice. We think it was entirely reasonable and probable that appellee would understand that, as far as paying attorneys was concerned, he would fulfill his obligation under the contract by employing attorneys of his choice. This he did, and the record clearly indicates he acted in good faith. If appellant expected reimbursement for fees paid Wynn, Hafter, Lake Tindall after writing the letter of May 18, 1954, it should have so advised appellee before Wilkes was employed.
(Hn 3) Appellee did not request, and the trial court did not give, an instruction on the doctrine of estoppel. This is not fatal. We affirmed judgment for plaintiff in J.C. Penney Co. v. Evans, 172 Miss. 900, 160 So. 779, when the case was submitted to the jury without any instructions for appellee. Cf. Masonite Co. v. Lochridge, 163 Miss. 364, 140 So. 223; Producers Gin Assn. v. Beck, 215 Miss. 263, 60 So.2d 642. (Hn 4) This Court has never commended the practice of relying on issues concerning which the jury is not instructed. Many authorities have condemned it. But in this jurisdiction the jury has the right to determine issues made by the pleadings and the evidence, notwithstanding no instruction is given on the issues. If the pleadings and the evidence justify a result reached by the jury, we will not reverse for failure of the successful party to have the jury instructed on the issues.
(Hn 5) It may be argued with some apparent force that we are resolving the case on the doctrine of estoppel when the jury that decided the facts was not instructed on the doctrine, and, therefore, could not have understood the nature or elements of that doctrine. It is probably true that the jury did not consider estoppel as a theory, but this was not necessary in order for the jury to apply the doctrine, which is based on common sense and fair dealings between men. It has been said that the compulsion of the doctrine of estoppel is one of fair play. McNeely v. Walters, 211 N.C. 112, 189 S.E. 114. Estoppel weighs and considers the conduct of men in their dealings with each other and gives that effect and meaning to their actions which common sense and justice dictates. Palmer v. Sovereign Camp W.O.W., 15 S.E.2d 655 (S.C.). Even so, the doctrine may not be invoked unless all the elements of estoppel are present.
We have considered all contentions made by appellant and find no reversible error.
Affirmed.
McGehee, C.J., and Lee, Kyle and Arrington, JJ., concur.