Huson v. Richard B. Brown, Inc.

[1] 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 satisfactory sureties in the sum of three thousand dollars to secure

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 prescribes. This rule; however, is hot 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 Pa. 186 ; Hopkins v. Town of Plainfield, 7 Conn. 286 . In my view this rúle has no application to the situation here presented. The bond in question recites that it was given pursuant to a public statute which expressly authorizes 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. Reading 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, 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 tiie 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 unenforceable, thus practically operating as a fraud upon the people of tire state and those- who may have consigned produce upon the faith of the bond.

[2] 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, Incorporated, 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.

Judgment accordingly.