M. L. and B. A. v. Price and Price-Syllabus.

3. Upon the hearing of a second appeal by parties plaintiff and dedefendant, matter not brought up by the first appeal, and which was not the subject of review upon that appeal, may, upon the second appeal, be assigned as error in a case where the judgment upon the first appeal was a general reversal of the judgment awarding a new trial.

4. There is an examination of witnesses, one of them being of counsel for the sureties upon the bond of the treasurer of a private corporation, the suit being by the corporation against such sureties. From the testimony of such witness, and from the preceding record in the case, it is apparent that the word "deficit" is used by all the parties as indicating the difference between "collections" and "disbursements," as shown by the books of the treasurer: Held, That the term “deficit” used in an agreement made at this stage of the trial must be given the same signification, and the finding of a referee based upon a different construction is erroneous.

5. Sureties upon such bond are not responsible for misappropriations or misapplications of money made anterior to the date of the bond, unless made so in terms clearly involving such liability. Where, however, the evidence shows simply that, at the date of the bond, the difference between collections and disbursements amounted to a certain sum, the presumption is that the money was then in the hands of the officer, the surety is responsible, and to rebut this presumption must show antecedent misapplication. 6. Where there is an appeai by each party from an entire judgment, and not from a judgment for different things separable in their nature and separated in the judgment of record, and the action of the court and referee is found to be correct as to the errors assigned upon the one appeal, but incorrect as to matters involved in the other, the judgment to be rendered here is one of general reversal awarding a new trial.

Appeal from the Circuit Court for Duval county.

The case was decided below by Mr. Aristides Doggett, an attorney-at-law, as Referee, and is an action brought under the Code of Procedure.

The facts are sufficiently stated in the opinion.

Fleming & Daniel for the Mutual Loan and Building Association.

M. L. and B. A. v. Price and Price-Argument of Counsel.

C. P. & J. C. Cooper for Price and Price.

Admitting the defalcation of the Treasurer Graybill during the period designated as the "second period" of his administration as Treasurer, defendants, Price & Price, contend that they are not liable on their bond as his sureties, because of the gross irregularities of the officers of the Association in the conduct and management of the business of said Association, amounting to and accompanied with fraud. In the defence set up fraud is distinctly charged. We have a right to prove it, and if proven the sureties are relieved under the decision of this honorable court in this case when it was before the court at the June Term, 1877. See 16 Fla. Sup. Cts. Reps., p. 212, as to the court's opinion on this point, and the case of U. S. vs. Kirkpatrick, (9 Wheaton, 721,) referred to by this court in that connection.

What is fraud, and in what does it consist? (See I Story's Eq. Jurisprudence, paragraphs or secs. 186, 187, 188, 189 and 190; 1 Bouvier's Law Dict., title Fraud, pages 612, 613 and 614; 2 Vesey Rept., (Chesterfield Exrs. vs. Janson, 155, opinion of Lord Chancellor Hardwicke.) The concealment or suppression of truth is actual fraud.

1 Story's Eq. Jurisprudence, Secs. 204, 205, 206 and 207 and 215, (especially the last section or paragraph cited, 215;) also Secs. 216 and 217, and cases cited and notes at bottom of 212th page of 9th edition of I Story's Eq. Jurisprudence; II Wheaton Rept., 59; case of Etting vs. Bank of the United States, p. 59; 11 Wheaton's Reps., note (d) bottom of p. 68; Franklin Bank vs. Cooper, 36 Maine R., 195; Lindenan vs. Desborough, 8 B. & Cressw., 586. 592, and application of the principle contained in said case cited in 8 B. & C. to all cases under party's obligation to make a disclosure and who conceals material facts, in

5-19th Fla.

M. L. and B. A. v. Price and Price-Argument of Counsel.

Sec. 217 of 1 Story's Eq. Jurisprudence, 9 Ed.; John Pidcock et al. vs. Saml. H. Townsend, 3 B. & C., 605; Owen vs. Howran, 3 Eng. Law and Eq. R., 121; 2 Kent's Com., Sec. 39, p. 483; Evans vs. Kneeland, 9 Ala. Reps. 42. How does fraud occur in the case at bar, and how do the propositions stated and the authorities cited apply?

answer

We

First. That from November 18th, 1870, to June 15th, 1871, Graybill was permitted to act as Treasurer of said Association without entering into bonds as required by the By-laws and Constitution of said Association. See Article 7 of Constitution.

Agreement or stipulation of counsel on file and made a part of the record of this case; admits defalcation of $1.380 prior to date of bond. (See case of Mutual L. & B

Association vs. Price & Price in 16th Fla. Reps., page 210.) The bond was executed on the 15th of June, 1871, after there was an admitted defalcation on the part of Graybill at that time of $1,380, as aforesaid. Nothing was told the sureties of the existence of such deficit in Graybill's accounts. All the surroundings and circumstances of the retention of Graybill as Treasurer were calculated to deceive such men as Price & Price into becoming sureties for Graybill, which they did, finding him an inmate of the office of the firm, one of whose members was the solicitor of the Association, and who was also the legal adviser and counsellor of the Prices, and the inquiries made and the replies given as to safety in going on the bond, and everything that transpired at the time and place the bond was executed, show either gross and unwarrantable ignorance of the business condition of the Association by its officers, or a knowledge of the defalcation of Graybill, and a desire to conceal same, and to involve said sureties by a studied concealment of the fact of such defalcation and a holding

M. L. and B. A. v. Price and Price-Argument of Counsel.

out of Graybill as a person who was trustworthy. In other words, either the directors and other officers of the Association complied with the Constitution and By-laws, and performed their duties as required in and by Article 10 of said Constitution and By-laws, and Article 5, Sections 3 and 4, and were therefore necessarily informed of the defalcation of their Trsasurer, or they did not perform their duty, and their inexcusable ignorance worked a great wrong and injury to the sureties on said Treasurer's bond, so gross as to amount to fraud.

Second. The utter and fraudulent neglect of the President and Board of Directors as aforesaid to see to it that there were monthly and quarterly and annual examinations of the Treasurer's accounts, as required by the Constitution. and By-laws, (see Articles 7 and 10) and to see to the disposal at short periods of the moneys on hand by loans, as required by the Constitution and By-laws, so as to prevent an accumulation in the Treasurer's hands, and thereby prevent loss to the Association and increased risk to the sureties, constitute legal fraud and relieves the sureties. 19th Eng. Law & Equity Reps., (cases decided in 1853); Watson vs. Alcock, top page 64; 1 Story Eq. Jurisprudence, (under head of constructive fraud) Secs. 324 and 325, and 325 e, 2 Vernon, p. 518. Case of Montague et al. vs. Titcomb & Haskins, defendants in the court below, claim that they are not responsible for any defalcation of the Treasurer occurring prior to June 15th, 1871, the date of the execution of the bond, because their liability under the law begun at that date and did not and could not retroact. In support of which view defendants say that the liability of defendants as to said first period is "res judicata."

See the opinion rendered in this matter. (16 Fla. Reps., pages 211, 213 and 216.) If not considered "res judicata," then said sureties cite in this connection Farrar & Brown

M. L. and B. A. v. Price and Price—Opinion of Court.

vs. United States, 5 Peters, U. S. Sup. Ct. Reps., page 373; 15 Peters, Case of U. S. vs. Boyd et al., 206; 9 Cranch, U. S. vs. Giles, page 339; 2 American Common Law, Title Bond, page 400; 9 Wheaton, U. S. Sup. Ct. Reps., Miller vs. Stewart, page 234.

Any variance from the clear meaning of the contract as understood by the obligors at the time of the execution of the bond, in the business of the Association, will amount to fraud, and relieve the sureties. 21 How., U. S. Sup. Ct. Reps., p. 75, Legall vs. Humphreys; Case of Millen vs. Stewart, 9 Wheaton, 680; Hat Factory vs. Messenger, 2 Pick., 234.

MR. JUSTICE WESTCOTT delivered the opinion of the

court.

In this case both plaintiff and defendants in the Circuit Court appeal from the judgment rendered. This opinion embraces both appeals. The case was before this court upon an appeal by Miles and John Price at June Term, A. D. 1877, 16 Fla., 204, the defendants not appealing. For a full statement of the case as then presented see the opinion there rendered. It is an action under the Code brought by the Building Association against Miles and John Price as sureties upon the bond of C. B. Graybill, Treasurer of the Association.

We first examine the case of the sureties.

The general defence made in the first trial was that the sureties were released by the acts, laches and gross irregularities of said Association represented by their President and Board of Directors. We there held that laches of the character set up unaccompanied with fraud did not discharge the sureties. The case being remanded for new trial, the sureties proposing to bring their case within the law of the contract as fixed by this court, amended their answer