Central States Sav. & Loan Ass'n v. U.S. Fidelity & Guar. Co.

• Decision Date: 22 December 1933
• Parties: Central States Savings & Loan Association, a Corporation, v. United States Fidelity & Guaranty Company, a Corporation, Appellant
• Court: Missouri Supreme Court

66 S.W.2d 550

334 Mo. 580

Central States Savings & Loan Association, a Corporation, v. United States Fidelity & Guaranty Company, a Corporation, Appellant

Supreme Court of Missouri

December 22, 1933

Appeal from Greene Circuit Court; Hon. Warren L. White Judge.

Reversed and remanded.

Hanna & Hurwitz and Mann & Mann for appellant.

(1) The giving of the two declarations complained of amount to the sustaining of a demurrer to the evidence on behalf of the plaintiff, and, if there was any substantial evidence adduced on behalf of the appellant on any of the issues made by the pleadings, then the giving of the two declarations complained of was reversible error. De Graw v. Prior, 53 Mo 313; Lumber Co. v. Christophel, 62 Mo.App. 98; Butler County v. Boatmen's Bank, 143 Mo. 13; Vincent v. Means, 184 Mo. 327; Crossett v Ferrill, 209 Mo. 704; Eaton v. Cates, 175 S.W. 950; Bartlett v. Boyd, 175 S.W. 947; Goodyear Tire & Rubber Co. v. Ward, 195 S.W. 75; Jones v. Toledo, etc., Co., 202 S.W. 433; Jaicks v. Schoellkopf, 220 S.W. 486; Grams v. Novinger, 231 S.W. 265; Saucier v. Kremer, 249 S.W. 640; Outcault Adv. Co. v. Mack, 259 S.W. 511; Warren v. Fritsch, 14 S.W.2d 29; State ex rel. Brewing Co. v. Ellison, 286 Mo. 232. (2) The bonds in suit were canceled on June 1, 1926 (Assignments of Error Nos. 3, 4, 5, 6, 7, 8, 9, 22, 23). The above contention of the appellant may well be discussed here under one heading for the reason that the appellant's contention that the bonds in suit were cancelled on June 1, 1926, is involved in and are the determining factor in each of the assignments of error listed immediately above, particularly Assignments Nos. 3, 7 and 8. (a) The best analogy in the law which the respondent can find to apply and to govern the understanding of the parties on the question of the authority to execute change notices is the analogy of a partnership or joint venture. If this analogy is apt, then either obligee had the authority to execute any and all application notices under such a bond as this. Lucas v. Cole, 57 Mo. 143; Elmer v. Campbell, 136 Mo.App. 100; Dierks v. Bruce, 239 S.W. 133; Knapp v. Hanley, 108 Mo.App. 353; La Fon v. Davis, 254 S.W. 50. (b) The investment company was the actual agent fully authorized to execute all change notices. The investment company was the general agent for the respondent to handle all of respondent's business; to pay all bills and expenses of the association, including the surety bonds on Reid and Huffman and to be liable for all damages resulting from any neglect or breach of duty on the part of Reid and Huffman. Such broad powers in the written contract of agency certainly would include general authority to bind the principal by the execution of application notices on a surety bond, both in the addition of names and the cancellation of a given schedule. Van Santvoord v. Smith, 79 Minn. 316, 82 N.W. 642; St. Paul Second Natl. Bank v. Larson, 81 Wis. 469, 50 N.W. 499; 2 C. J. 646, note 10; Moore v. Gaus & Sons Mfg. Co., 113 Mo. 106. (3) Where a suit is founded upon a written contract, the contract must be proven as alleged. Proof of an entirely different contract than that alleged constitutes a fatal variance between pleading and proof. Cole v. Armour, 154 Mo. 350; Sturgeon v. Pioneer Life Ins. Co., 186 S.W. 1192; Thee v. Railroad, 217 S.W. 566; Gardner v. Atlas Cement Co., 193 S.W. 32; Cudahy v. Railroad, 196 S.W. 407; Jones v. Hill, 18 S.W.2d 386; Bay v. Wank, 255 S.W. 326; McNeely v. Carlisle, 219 S.W. 145; Roaring Fork Potato Growers v. Produce Co., 193 Mo.App. 653, 187 S.W. 619; Cockrell v. Williams, 195 Mo.App. 400, 193 S.W. 867; John A. Ect Co. v. Supply Co., 289 S.W. 356; Franklin Bank v. Equipment Co., 217 Mo.App. 131; Adams v. Kendrick, 11 S.W.2d 23; Houck v. Hunter, 225 S.W. 1028; Sheehy v. Mandeville, 7 Cranch, 208, 3 L.Ed. 317; 31 Cyc. 705.

Borders, Borders & Warrick and H. T. Lincoln for respondent.

(1) Plaintiff's instructions numbered 1 and 2 constitute merely a general finding of fact, are nothing more than the "verdict found" and were therefore properly given. Stone v. Spencer, 77 Mo. 361; Heynbrock v. Hormann, 256 Mo. 21, 164 S.W. 551; Chaonia State Bank v. Sollars, 190 Mo.App. 284, 176 S.W. 265; Kansas City ex rel. Neill v. Askew, 105 Mo.App. 84, 79 S.W. 484; Kurre v. Am. Indemnity Co., 17 S.W.2d 685. (2) The only office of declarations of law in a case tried by the court without a jury is to indicate the legal theory on which the judgment of the court is found, and even though the declarations of law given and refused may be in conflict or amount to misdirection or nondirection, nevertheless such error is not harmful if, upon a consideration of the whole record, the judgment of the court can be sustained on any theory. Helemuth v. Benoist, 144 Mo.App. 695, 129 S.W. 257; Falvey v. Hicks, 286 S.W. 385, 315 Mo. 442; Johnson v. Murray, 289 S.W. 986; Buck v. McMinn, 300 S.W. 500; Engleman v. Baker, 250 S.W. 919; Carpet Co. v. Hatton, 55 Mo.App. 320; Crescent Planing Mill Co. v. Spilker, 77 Mo.App. 409; Warren v. Fritsch, 14 S.W.2d 30. (3) The admission in evidence of the ledger sheets of Reid and Huffman containing the record of their embezzlements was proper. Jungkind Photo Supply Co. v. Yates, 257 S.W. 820; Cudahy Packing Co. v. C. & N. W. Ry. Co., 201 S.W. 598; Roth Tool Co. v. Spring Co., 146 Mo.App. 32. (4) Having failed to plead any provisions of the policy with respect to the giving of notice, defendant is precluded from relying upon a defense predicated upon an alleged failure to give notice. The authorities uniformly hold that "exemptions, exceptions, warranties, conditions and other provisions undertaking to cut down, limit or defeat liability, or to forfeit the insurance, must be pleaded if relied upon as defenses by the insurer." Shapiro v. Am. Surety Co., 259 S.W. 502. (5) The policy in suit contains no forfeiture clause and accordingly any failure to comply with its terms cannot operate as a forfeiture. James v. U.S. Casualty Co., 113 Mo.App. 622; Shanebarg v. Society, 263 S.W. 512; Dezell v. Fidelity Co., 176 Mo. 253; Zackwick v. Insurance Co., 225 S.W. 135. (6) Appellant's failure to call the defaulting employees as witnesses, although in attendance at the trial, raises the inference that their testimony would have been unfavorable to the appellant. Whitmore v. Am. Ry. Express Co., 269 S.W. 654; McClanahan v. Railroad, 147 Mo.App. 386, 126 S.W. 535; Thomas v. Life Assur. Society, 198 Mo.App. 533, 205 S.W. 533; 22 C. J. 115, 111.

OPINION

Frank, P. J.

Suit on a fidelity bond. Plaintiff recovered judgment and defendant appealed to the Springfield Court of Appeals. That court reversed the judgment and remanded the cause, but deeming its opinion in conflict with the ruling of the St. Louis Court of Appeals in Kurre v. American Indemnity Company of Galveston, Texas, 17 S.W.2d 685, certified the case here for final disposition.

Plaintiff's petition was in two counts. A jury was waived and the cause was tried to the court. At the close of the evidence, the court, at the request of plaintiff, gave a peremptory declaration of law on each count of the petition to the effect that under the pleadings and the evidence the finding must be for plaintiff.

Defendant contends that it offered substantial evidence tending to show that plaintiff was not entitled to recover and for that reason the peremptory declarations of law directing a finding for plaintiff were erroneous. Defendant cites in support of this contention DeGraw v. Prior, 53 Mo. 313; Butler County v. Boatmen's Bank, 143 Mo. 13, 44 S.W. 1047; Vincent v. Means, 184 Mo. 327, 82 S.W. 96; Crossett v. Ferrill, 209 Mo. 704, 108 S.W. 52; Eaton v. Cates, 175 S.W. 950; Bartlett v. Boyd, 175 S.W. 947; A. Jaicks Co. v. Schoellkopf, 220 S.W. 486.

On the other hand, respondent contends that the trial being before the court, the peremptory declarations of law amounted to no more than an announcement by the court that, in its opinion, the law and the evidence required a finding for plaintiff. Respondent cites in support of this contention, Stone v. Spencer, 77 Mo. 356, 361; Heynbrock v. Hormann, 256 Mo. 21, 164 S.W. 547, 551.

Each party also cites cases from the Courts of Appeals which support their respective contentions.

We will first determine the question of law raised by the contentions made, then apply the law as determined to the facts of the instant case. The decisions of our courts are not in harmony on this question. Some cases hold that where a law case is tried by the court without the aid of a jury, a peremptory declaration of law directing what the finding of the court must be, is, in effect, a finding of facts and for that reason is not erroneous. Other cases hold the contrary.

The case of A. Jaicks Co. v. Schoellkopf, 220 S.W. 486, cited by appellant, was tried by the court below without the intervention of a jury. The following declaration of law was given: "The court, sitting as a jury, declares the law to be that, under the pleadings and testimony in this case, the judgment must be for plaintiff for the full amount of the tax bills offered in evidence with eight per cent interest from date." In determining the propriety of this peremptory declaration of law, this court said: "It required the court to find from the evidence that there was no substantial evidence for the defense. In other words, it was a demurrer to the evidence of the defense. If there was any substantial evidence to show a defense, such an instruction was error. We think there was such evidence, and the instruction was error." Appellant cites five other decisions of this court holding the same way.

The case of Heynbrock v. Hormann, 256 Mo. 21, 37, 164 S.W. 547, cited by respondent, was tried by the court below without the aid of a...