In the latter motion appellant asked the trial [ we do not feel justified in disregarding the court to enter judgment for respondents in verdict of the jury, and substituting our judgthe sum of $196.75, being the amount of the ment upon the facts. As was said in our forassessments paid by the deceased under the mer decision of this case: benefit certificate. Judgment was entered on the verdict, from which this appeal is taken. This case was here on a former appeal from a like verdict and judgment, and is reported in 93 Wash. 352, 160 Pac. 946, to which reference is made for a more complete state

years before between his father and mother, regarding the father's age, and that his father then and always claimed that he was born in 1862. This testimony relates to a time prior to the making of the application for membership involved here, and apparently was made at a time when there was no reason for speaking other than the truth. We think the evidence admissible. 2 Wigmore, Ev. § 1482.

[7] Finally it is contended that the proof of death which stated deceased was born in 1858, made a prima facie case, and shifted the burden of proof, and that the court should have so instructed the jury. We said in Smith Sand & Gravel Co. v. Corbin, 75 Wash. 635, 135 Pac. 472:

"Some contention is made, rested upon the alleged shifting of the burden of proof. It is said that the admission of the making of the contract on the part of respondent, in effect, constituted the making of a prima facie case against him, upon which counsel seem to argue that this resulted in shifting the burden of proof. We do not understand that the establishing of a prima facie case sufficient to go to the jury has the result of shifting the burden of proof. The jury are not necessarily bound to find for the plaintiff upon the making of a prima facie case. Prima facie case means only that the case has proceeded upon sufficient proof to that stage where it must be submitted to the jury, and not decided against the plaintiff as a matter of law. A prima facie case does not necessarily mean that judgment goes in favor of the plaintiff as a matter of law. The jury are still the judges of the sufficiency of the showing to call for a verdict in plaintiff's favor, and where there is no affirmative defense, strictly speaking, the jury are to measure plaintiff's rights, having in view that he has the burden of proof."

we can say whether there was any testimony in the light of admitted facts and undisputed circumstances. I would add to the quotation from our former opinion, "Whatever the rule may be, etc.," the following:

"But this cannot be so when the undisputed circumstances show that the story told by a witness, upon a material issue cannot, by any possibility, be true, or when the testimony of a witness, necessarily relied upon, is inherently impossible." Blumenthal v. B. & M. R. R., 97 Me. 255, 54 Atl. 747.

If I had the time I could cite many cases from our own reports, especially those on negligence, where we have held as a matter of law that the testimony of a plaintiff could not carry a case to the jury when overcome by admitted facts and undisputed and undisputable circumstances. It should not be held that the taking of an oath by a witness is enough to sustain a verdict which we all know to be unfounded and unjust.

The test is: If the trial judge had dismissed the case on the ground that there was no credible testimony to sustain the verdict, would we have reversed the case? Assuredly not. Then why may we not say the same when the appeal is prosecuted by the other party. The judgment of the lower court should be set aside and the case dismissed.

SPOKANE UNION STOCKYARDS CO. v.

MARYLAND CASUALTY CO.
(No. 15031.)

Finding no error, the judgment is affirmed. (Supreme Court of Washington. Jan. 10, 1919.) MITCHELL, MACKINTOSH, and MAIN, 1. PRINCIPAL AND SURETY 97-CHANGE of OBLIGATION.

JJ.,

concur.

Generally any material change in the obligation, whether prejudicial to surety or not, will discharge him from liability.

2. PRINCIPAL AND SURETY 102-CHANGE OF PRINCIPALS - PARTNERSHIP LIABILITY OF SURETY.

partner.

CHADWICK, C. J. I dissent. The testimony of the "two witnesses" is so clearly discredited by the testimony of the relatives of the deceased, by the documentary evidence, and by the family Bible that the motion of the appellant for a judgment notwithstanding If a surety engages for an individual, enthe verdict should have been granted. How-gagement extends to the acts of that individual ever honestly the "two witnesses" may have alone, and will not continue if he takes in a spoken, their mistake is evident. That they are mistaken as to the place of birth and the home of the deceased no one denies, and their testimony as to the time of birth, when robbed of these supports, is so frail that it does not rise to the dignity of evidence. The only facts in the case to hang a verdict on are that appellant is an insurance society, and the man is dead. It may be enough-in insurance cases-but the rule will vex us in

the end.

We cannot pass upon the weight of testimony or the credibility of the witnesses, but

3. PRINCIPAL AND SURETY 102—ADVANCES TO PRINCIPAL.

In action on bond conditioned on payment of obligations by an individual, where defense was that advances sued for were debt, not of the individual, but of firm of which he was partner, held that, even if the case depended upbusiness to which advances were made, plainon notice to plaintiff of partnership character of tiff, knowing that the individual principal was a member of a partnership, was required to inform himself whether such partnership extended to the business in question.

For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes

Department 1.

ship, and that having such notice, either exAppeal from Superior Court, Spokane press or implied, it cannot recover upon the County; Bruce Blake, Judge.

Action by the Spokane Union Stockyards Company against W. H. Ralph, doing business as the Ralph Commission Company, Mrs. W. H. Ralph, his wife, and the Maryland Casualty Company. Judgment for plaintiff against the first two named defendants and for lastnamed defendant. Plaintiff appeals. Affirmed.

D. R. Glasgow, of Spokane, for appellant.
E. H. Belden, of Spokane, for respondent.

CHADWICK, J. For some time prior to the 6th day of January, 1917, the defendant W. H. Ralph had been engaged in the business of buying and shipping cattle through the Spokane Union Stockyards, Inc., at Spokane, Wash., under the name and style of the Ralph Commission Company.

To save the appellant from any loss by reason of advances made by it on account of the business of the defendant, it exacted a bond to save itself harmless in the event of the failure of the defendant to meet his obligations. The bond was executed by defendant as principal and the respondent Maryland Casualty Company as surety. At the same time and up to June 2, 1917, one J. L. Stringfield was engaged in the business of buying cattle in the country and shipping them to the yards at Spokane. He was engaged, as we take it from the testimony, in what is called the "feeder" cattle business, and had done some business with Ralph to the knowledge of appellant. On the 20 day of June, Stringfield and defendant Ralph entered into a copartnership. No notice was given of the partnership either by publication, by the filing of a certificate showing the names of the members of the copartnership, or by direct or actual notice to the managing officers of the appellant, or to the respondent. This partnership continued until the 14th day of August, 1917, when it was dissolved, and notice of such dissolution was published in a daily paper at Spokane.

Appellant brought this action to recover the sum of $688.67, which it alleges and the

court found that it had advanced for the account of the Ralph Commission Company. The respondent Casualty Company defended, setting up that Ralph and Stringfield had, after the time the bond was executed, entered into a copartnership, and that all the business of the plaintiff had been conducted with the partnership since that time. The items sued on all post date June 2d.

liable.

bond. The case is presented by appellant upon the theory that, if the appellant had no notice of the formation of a partnership between Ralph and Stringfield, respondent is with reference to notice, for we are convinced It is unnecessary to review the facts that the judgment of the lower court should be sustained. The obligation assumed by the respondent was to meet certain defaults of defendant Ralph. The Ralph Commission Company is not mentioned in the bond. Ordinarily we assume that this would make no difference, but appellants knew of the trade name under which Ralph did business, and, having contracted with him, there was some obligation on its part to inform itself whether the Ralph Commission Company was and continued to be Ralph individually.

[1, 2] The general rule is that "any material change in the obligation, whether prejudicial to the surety or not, will discharge him from liability

where there

has been a release or change of principals. If a surety engages for an individual, the engagement is understood to extend to the acts of that individual alone, and will not continue if he takes in a partner; in other words, the surety for a single individual is not liable for a partnership of which such individual is a member." 21 R. C. L. 1061.

All of the books agree that the surety is not to be bound beyond the fair scope of the terms of his contract. That is, "to the extent and in the manner and under the circumstances he consented to become liable.” Friendly v. National Surety Co., 46 Wash. 71, 89 Pac. 177, 10 L. R. A. (N. S.) 1160; citing Brandt Suretyship Guaranty (2d Ed.) §§ 118, 119.

The case just cited notices a rule of construction that runs through all of the casesthat is, that the surety will be presumed to have considered the responsibility of the principal at the time the obligation was assumed; that contracts insuring or guaranteeing the payment of money by an individual or a firm are sustained by a confidence in the principal, and cannot be extended to others for whose account the surety may have re

fused to become holden. The rule is laid down in Pingrey on Suretyship and Guaranty, 79, as follows:

"Where the liability of the surety is limited to the transactions and defaults of a principal, he cannot be made liable for defalcations and first in the business." omissions of another principal who joins the

See, also, Stearns on Suretyship (2d Ed.) The court found that appellant had notice § 53; Spencer, Suretyship, § 198. of this change, or, if it did not actually know

of the partnership, it had sufficient knowl- which is said to be strictissimi juris, and one "It is a case of pure guaranty; a contract edge and information of the dealings of in which the guarantor is entitled to a full disRalph and Stringfield to put it upon inquiry closure of every point which would be likely to as to the nature and scope of the copartner-bear upon his disposition to enter into it.

* He has a right to prescribe the exact terms upon which he will enter into the oblization, and to insist on his discharge in case those terms are not observed. It is not a question whether he is harmed by a deviation to which he has not assented. He may plant himself upon the technical objection, this is not my contract, non in hæc fœdera veni." Barns v. Barrow, 61 N. Y. 39, 19 Am. Rep. 247.

See, also, Brandt, Suretyship Guaranty (3d Ed.) § 133; Stearns, Suretyship (2d Ed.) § 53; Spencer, Suretyship, § 198; White Sewing Machine Co. v. Hines, 61 Mich. 423, 28 N. W. 157; Dupee v. Blake, 148 Ill. 453, 35 N. E. 867; Mathews v. Garman, 110 Mich. 559, 68 N. W. 243; Parham Sewing Machine Co. v. Brock, 113 Mass. 194; Connecticut Mutual Life Ins. Co. v. Scott, 81 Ky. 540; Standard Oil Co. v. Arnestad, 6 N. D. 255, 69 N. W. 197, 34 L. R. A. 861, 66 Am. St. Rep. 604.

In the last case cited the court said:

who may afterwards be taken into the firm without his knowledge or consent. It is often in the power of one partner, by want of discretion and integrity, to ruin another."

The question of notice to the obligee is discussed in that case. It is said:

"Finally, it is said that it does not appear that the plaintiff knew of the withdrawal of Eggerud from the firm, and that hence it follows that the old firm, as a firm, was still liable to the plaintiff for the funds misappropriated, no matter by whom they were embezzled. Upon this foundation plaintiff builds up the argument that, inasmuch as the principals in the bond are liable, so are the sureties. But this the obligation of the sureties in this case. By reasoning entirely misapprehends the nature of signing the bond, they did not, in effect, assert to the plaintiff that they would be bound whenever the principals in the bond were liable in any way to the plaintiff, whether because of their having embezzled the property, or by reason of the doctrine of estoppel, which would seal their lips against a denial of liability. They "A surety who engages to be responsible for merely agree to become responsible for the fidelthe honesty of a firm may be entirely influenced ity of the firm so long as each of the members by the consideration that one of the partners of the firm should remain in the business. They is a man of integrity, and of such strength of contracted to be bound for the acts of Arnestad character, and such shrewdness and watchful- so long as they could have the protection resultness in business affairs, that the risk of his ing from the association of Eggerud with him honesty from the action of the other partner, in the same business. But they did not guarin whom the surety may place no trust, is re-antee the integrity of Arnestad alone, unwatchduced to the minimum. The sureties in this case may have been willing to become bounden for the fidelity of Arnestad & Eggerud while acting as a firm, and yet at the same time not willing to incur the hazard of obligating themselves as sureties of the partner Arnestad alone. Based upon such considerations as these, the rule of law has long been established that the surety, standing upon the very letter of his contract, may insist that he cannot be held for aught that is done after the dissolution of the firm, for which he alone became responsible.

* The case of Dupee v. Blake [148 Ill. 453] 35 N. E. 867, so far as the principle of law is concerned, presents the same features as the case at bar. The court there said: "The rule is that, if a surety engages for an individual, the engagement is understood to extend to the acts of the individual alone, and will not continue if he takes in a partner; in other words, the surety for an individual is not liable for a partnership of which he is a member. A surety who guarantees that a firm composed of particular individuals will do certain acts or discharge certain duties cannot be held liable where there is a change in the firm, although the firm name is not changed. As a surety's liability is strictissimi juris, and cannot be extended by construction, his guaranty to a partnership is extinguished if any partner is taken into or retires from the partnership, unless it appears from the terms of the instrument that the parties intended the guaranty to be a continuing one, without reference to the composition of the firm. A party may be induced to become surety for the individuals who compose a firm because of his confidence in their integrity, prudence, accuracy, and ability as business men; but he cannot be presumed to have intended to become responsible for the possession of such qualities by some third person

ed and influenced by Eggerud, who may have been the only person in whom they reposed any trust. If the plaintiff was ignorant of the change in the firm, so were the sureties; and, if the sureties have a right to stand upon the terms of their contract, then it behooved the plaintiff to ascertain at its peril whether all the persons for whom the sureties had become responsible still remained at the helm of the business of the agency. On this point the decision of the court in Birch v. De Rivera (Sup.) [53 Hun, 367], 6 N. Y. Supp. 206, is decisive. The court there said: "The fact that plaintiffs were not notified of the change is immaterial. They may have an action against the firm as it existed before the change, because of failure to notify them of the change, or to publish the notice of dissolution. That proceeds on another principle-presumption attached to continuous firm dealings without notice. The guarantor, however, is not responsible for a state of facts which might justify a recovery against the original members. There is no evidence that he was aware of the change. He seems to be as much without notice as the plaintiffs. But, were it otherwise, we may say, in the language of Lord Blackburn, "Nothing is stated to show that the defendant was under obligation to inform the plaintiff banking house of the fact, or that he took steps to conceal it." At all events, his contract is to guarantee a copartnership composed of certain persons, and that contract cannot be altered or extended without his consent.' See, also, Backhouse v. Hall, 6 Best & S. 507."

Respondent claims that there is an exception to the rule; that is, where the principal, after executing the bond, took in a partner, and the goods were delivered on the credit of the principal and charged to his individual

account; citing Gilbert v. State Ins. Co., 3 Kan. App. 1, 44 Pac. 442, and Brandt, Suretyship Guaranty, § 137, which is no more than the holding of the court in Palmer v. Bagg, 56 N. Y. 523.

But these cases, if they be sound, may be sustained upon an entirely different theory. They are cases where the obligee had appointed an agent, for whose personal honesty the surety stands sponsor, thus raising a personal relation between the parties, and so long as the relation of principal and agent continues to exist the principal can look to the agent, and will not be bound by the manner in which he does his business, whether by the employment of clerks, by doing business with another upon a commission basis, or by taking in a partner.

The case of Palmer v. Bagg, supra, is noticed in Standard Oil Co. v. Arnestad, supra. It is there said:

to its knowledge. These transactions, so far as the bookkeeping of the parties goes, were carried out in the name of the Ralph Commission Company, so that if the case depends upon notice, and one of two innocent parties is to suffer, we think clearly that there was a duty upon appellant to inform itself of the extent of the partnership which it admits, of which it took no concern upon an assumption which it is now certain had no foundation in fact.

The judgment of the lower court is affirmed.

MAIN, C. J., and MACKINTOSH and TOLMAN, JJ., concur.

PEOPLE ex rel. HUBBARD, Atty. Gen., v.
COLORADO TITLE & TRUST CO. et al.
PUBLIC UTILITIES COMMISSION OF
STATE OF COLORADO v. SAME.

(Nos. 9448, 9457.)

(Supreme Court of Colorado. Dec. 7, 1918.) 1. CONSTITUTIONAL LAW 62 AUTHORITY OF LEGISLATURE DELEGATION TO PUBLIC SERVICE COMMISSION.

"But, in our judgment, these cases are plainly distinguishable from the case before us for final settlement. Their facts were different from the facts of this controversy in vital particulars. The sureties there had become responsible for the honesty of an individual agent. As the court very properly held, such sureties took the risk, not only of their principal's dishonesty, but also of the dishonesty of those whom he might employ in any capacity to assist him in the prosecution of the business of the agency. Should he hire a subagent as an assistant, the sureties would still be bound. And so they would remain liable if he should see fit to give such assistant an interest in the profits of the business of the agency, provided the obligee did not deal with the new firm as agents, and thus extinguish the original agency. The sureties in those cases undertook to guarantee the fidel-2. ity of the agent to his trust, and therefore necessarily agreed to be responsible for whatever he should do himself or through his agents and employés. They agreed to assume the risk of his integrity and his business judgment in employing assistants in any capacity. It is upon this ground that all these decisions relied on by counsel for plaintiff proceed."

The Legislature, without express constitu

tional provision, may create a utilities commission, to which it may delegate governmental authority over and supervision of public service corporations, which the state has inherent power to regulate and control.

RAILROADS

186-FORECLOSURE-INTER

VENTION BY PUBLIC SERVICE COMMISSION.

If jurisdiction of Public Utilities Commission was usurped by district court in suit to foreclosure railroad mortgage, court ordering junking of road by receiver, commission had right to appear in court and ask it to vacate or modify order to avoid conflict in jurisdictions, and, if court refused, to have ruling reviewed. 3. RAILROADS 207-RECEIVERS OF DISMANTLING OF RAILROAD-POWERS OF PUBLIC SERVICE COMMISSION.

Public Utilities Act of 1913, as amended in 1915 and 1917, confers on Public Utilities Commission exclusive jurisdiction to determine whether railroad may abandon service upon and and the district court, on motion of receiver dismantle its road, lying wholly within the state, appointed in foreclosure suit, was without authority to make a "junking order" requiring receiver to dismantle and sell road.

[3] But if it be held that notice to the appellant must be shown, we think there is enough in the record to sustain the finding of the court that appellant ought to have known of the new relation. It knew that it had taken the bond of Ralph as an individu al; it knew of the name and style under which he did business; it knew that Stringfield had been engaged in business on his own account; it knew that a partnership actually existed between Stringfield and Ralph, but assumes to excuse itself by saying that it understood that their partnership was in the feeder cattle business, and not in the commission business. There is no showing that amended in 1915, receiver for railroad appointafter the 24 day of June appellant ever haded by district court in foreclosure suit held subany business at all with Stringfield as an in- ject to control of Public Utilities Commission dividual. Cattle were shipped in by him, and in same way railroad itself was before his apwere sold at auction in the yards by Ralph pointment.

4. RAILROADS 210-CONTROL BY PUBLIC

SERVICE COMMISSION.

Under Public Utilities Act of 1913, as

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