City of Brookfield v. McCollum

• Decision Date: 09 April 1928
• Docket Number: No. 26655.,No. 26656.,26655.,26656.
• Citation: 5 S.W.2d 10
• Parties: CITY OF BROOKFIELD v. WALTER McCOLLUM ET AL.; C.M. HOPPER ET AL., Appellants. CITY OF BROOKFIELD v. WALTER McCOLLUM ET AL.; HARRY MARKHAM, Appellant.
• Court: Missouri Supreme Court

5 S.W.2d 10

CITY OF BROOKFIELD v. WALTER McCOLLUM ET AL.; C.M. HOPPER ET AL., Appellants. CITY OF BROOKFIELD v. WALTER McCOLLUM ET AL.; HARRY MARKHAM, Appellant.

No. 26655.

No. 26656.

Supreme Court of Missouri, Division Two.

April 9, 1928.

Appeal from Macon Circuit Court. — Hon. Vernon L. Drain, Judge.

AFFIRMED.

C.M. Kendrick, Harry K. West and Paul Van Osdol for appellants.

(1) Sureties are the favorites of the law and their obligation should be strictly construed so as not to impose burdens not clearly within its terms. Schuster v. Weiss, 114 Mo. 158; Nofsinger v. Hartnett, 84 Mo. 549; Beers v. Wolf, 116 Mo. 179; 32 Cyc. 73; State ex rel. v. Findley, 101 Mo. 368. (2) The knowledge of the alteration of the bond in respondent's attorney is the knowledge of respondent. Bank of Commerce v. Hoeber, 88 Mo. 37; Hunter v. Wabash Ry. Co., 149 Mo. App. 243; Hedrick v. Beeler, 110 Mo. 91; 6 C.J. sec. 114. (3) Knowledge of the alteration of the bond in the approving authority, the respondent's mayor, discharges the appellants. State v. McGonigle, 101 Mo. 353. If the appearance of the bond and the facts and circumstances attending the approval of the bond were such as to cause the approving authority to inquire and such inquiry would necessarily disclose the alteration in the bond, such approving authority is charged with the knowledge of the alteration. State ex rel. v. Chick, 146 Mo. 645; State v. McGonigle, 101 Mo. 353; State ex rel. v. Findley, 101 Mo. 368; State to use v. Potter, 63 Mo. 212; Smith v. United States, 2 Wall. 219; Bracken County Commrs. v. Drumm, 80 Ky. 388; Fletcher v. Austin, 11 Vt. 447; 20 R.C.L. 346. It is immaterial that the sureties may have sustained no disadvantage by change or alteration of bond. State ex rel. v. Chick, 146 Mo. 645; Britton v. Dierker, 46 Mo. 591; Heim Brewing Co. v. Hazen, 55 Mo. App. 277; German Bank v. Dunn, 62 Mo. 79; Schuster v. Weiss, 114 Mo. 158; Nofsinger v. Hartnett, 84 Mo. 549. It has been held that want of knowledge of alteration on the part of the approving authority does not prevent discharge of sureties. Heim Brewing Co. v. Hazen, 55 Mo. App. 277; Britton v. Dierker, 46 Mo. 591; Haskell v. Champion, 30 Mo. 136; Trigg v. Taylor, 27 Mo. 245; Ivory v. Michael, 33 Mo. 398. (4) The appellant, Harry Markham, is in no different position from the other appellants, though he may have had knowledge of the erasure and alteration, for it is not to be held that his action would bind him as sole surety. State v. McGonigle, 101 Mo. 353; State v. Craig, 58 Iowa, 238. (5) The alteration of the bond without the consent of the sureties releases the sureties regardless of knowledge. Bank v. Meals, 295 S.W. 73; State v. McGonigle, 101 Mo. 353; Heim Brewing Co. v. Hazen, 58 Mo. App. 577.

W.J. Carlson and Thomas P. Burns for respondent.

(1) The mayor was the officer designated by the statute and city ordinances to approve the bond of McCollum, treasurer. Sec. 8213, R.S. 1919; State v. McGonigle, 101 Mo. 368. (2) It is undisputed that the mayor did not know the bond was ever altered or changed. If the change in the bond was not known by the mayor when he approved the bond, the defendants cannot repudiate their contract. State v. McGonigle, 101 Mo. 368. The mayor had no notice nor intimation that the bond was not all right in every way. The mayor was concerned all the time about the solvency of the sureties, and especially convinced that Kiel, Turner and Hopper made the bond a good and solvent bond. Before defendants can repudiate their contract, they must show two things: First, they must show the mayor knew the bond was changed when he approved it, and second, they must show the mayor knew that the sureties did not know it, at the time he approved it. Neither of these facts was shown. (3) This case turned on a question of fact and the trial court found the facts in favor of respondent, and the judgment should be affirmed. Appellants have not pointed out any error of law. (4) The contracts of sureties are construed like other contracts. Springfield Lighting Co. v. Hobart, 98 Mo. App. 227; Berrs v. Wolf, 116 Mo. 184; Lionberger v. Krieger, 88 Mo. 166; Fisse v. Einstein, 5 Mo. App. 86; State ex rel. v. Titman, 134 Mo. 172. (5) In any event, the only question for review in the instant case is whether or not the mayor knew the bond was altered when he approved it, and whether or not he knew the sureties did not know it. Hitchcock v. Galveston, 96 U.S. 341; Blair v. Waco, 75 Fed. 800; Kansas City v. Bacon, 147 Mo. 259; Thompson v. Boonville, 61 Mo. 282; Matthews v. Alexandria, 68 Mo. 115; Kansas City v. Duncan, 135 Mo. 571. (6) What the city attorney or others may have known about the alteration of the bond is not an issue here. It devolved upon the mayor, by law, to approve the bond and he could not delegate that authority to others.

HENWOOD, C.

The city of Brookfield filed this suit, in the Circuit Court of Linn County, at Brookfield, against Walter McCollum, as principal, and C.M. Hopper, A.G. Rogers, W.S. Johnson, Peter Kiel, C.E. Hunter, W.H. Johnson, C.E. Hoagland, J.M. Turner, V.Q. Johnson, E.J. Faut, Edward Hubbard and Harry Markham, as sureties, on the official bond of McCollum, as city treasurer, in the sum of $50,000, alleging the breach of said bond, by reason of McCollum's failure to turn over to his successor in office certain city funds in the sum of $23,707.83, and seeking the recovery of said sum, together with interest from the date of demand. The venue was changed to the Circuit Court of Macon County, at Macon City, where the case was tried before the court, a jury being waived. The trial court found the issues for the plaintiff and rendered judgment against the defendants for $50,000, the full penalty of said bond, to be satisfied in full on the payment of $23,707.83, with interest thereon, at the rate of six per cent per annum, from January 12, 1925, the date of the filing of the petition. From that judgment all of the defendants appealed, except McCollum, eleven of the sureties joining in one appeal and the other surety, Harry Markham, taking a separate appeal. As indicated by the title of this cause, these separate appeals were consolidated, by stipulation of the parties, for presentation by briefs and argument in this court and for decision by this court.

The trial petition follows the usual form in cases of this character. Among other essentials, it alleges the execution, delivery and approval of McCollum's said official bond as city treasurer and said shortage in his accounts as such officer. The original separate answers of the sureties were in the form of general denials. After the first day of the trial and shortly before the plaintiff closed its case in chief, all of the sureties, except Harry Markham, joined in a separate amended answer, in which they set up the defense of non est factum, and specially pleaded a material alteration in the bond, after the execution of the same by them and prior to delivery, without their knowledge and consent and with the knowledge of the city and its officers and agents. The alteration complained of was the erasure of the signature of P.W. Markham or Percy Markham and the substitution of the signature of Harry Markham. At the same time, Harry Markham filed a separate amended answer, in which he pleaded the same defense, and his release from liability on said bond as a consequence of the release of his co-sureties. It was agreed by counsel that the record should show the filing of replies to these separate amended answers in the form of general denials.

McCollum was elected city treasurer of the city of Brookfield at the April election, 1924. He was required to give an official bond in the sum of $50,000, as security for the faithful performance of his duties and for the safe-keeping and prompt payment of all city funds as provided by law. His bond was first offered for approval on April 15, 1924, when the other newly elected officers were installed and the new council held its first meeting. The bond was then signed by McCollum, as principal, and C.J. Hopper, A.G. Rogers, W.S. Johnson, Peter Kiel, C.E. Hunter, W.H. Johnson, C.E. Hoagland and P.W. or Percy Markham, as sureties. The mayor, city attorney and finance committee of the council had discussed the sufficiency of the bond before the council meeting and, at the meeting, the bond failed of approval by the mayor, and McCollum was advised that more sureties were necessary. A few days thereafter, the bond was again presented for approval, with the signature of J.M. Turner as an additional surety, and McCollum was again advised that he would have to get more sureties. Later, V.Q. Johnson, Edward Hubbard and E.J. Faut signed the bond as sureties. Harry Markham was then asked to sign the bond as a surety, and, after McCollum had erased the signature of his son. P.W. or Percy Markham, at his suggestion, Harry Markham signed the bond at the place where the signature of P.W. or Percy Markham had previously appeared. On April 24, 1924, McCollum returned the bond to the city attorney. On the same day, the mayor immediately approved the bond, on the advice of the city attorney and finance committee that the sureties were sufficient. Thereupon, McCollum assumed the duties of his office as city treasurer and deposited all city funds received by him in the Brookfield Trust Company. He was treasurer of that institution also. On December 17, 1924, the Brookfield Trust Company was closed by the State Finance Department, because of its failing condition. On December 24, 1924, McCollum resigned his office as city treasurer, at the request of the mayor, and J.W. Moore was appointed as his successor in that office. The city attorney was present when McCollum turned over his books and accounts to Moore, his successor, on December 27th or 28th, 1924, and made the demand that McCollum turn over to Moore all city funds. At the time of his resignation, McCollum owed the city...