OPINION
WEAVER, J.
On
February 17, 1914, the defendant West sold and conveyed to
the plaintiff a described half section of land in the state
of Colorado. At the time of said sale and conveyance, and as
a part of the same transaction, the grantor and grantee
entered into a written contract, which, in view of the
somewhat peculiar nature of the controversy, we here set out
in full.
"CONTRACT.
"This
contract, made in duplicate and entered into this 17th day of
February, 1914, by and between N. P. West of Linn County
Iowa, party of the first part, and C. Denecke, party of the
second part, witnesseth:
"Party
of the first part has this day sold to party of the second
part a certain half section of land legally described as
follows: The north half Section 7, Township 2 South, Range 64
West of the 6th P. M., Adams County, Colorado, containing 320
acres, more or less, according to government survey.
"Party
of the second part has purchased above-described land, and
for the same has paid the sum of $ 2,800 in cash, the said
land being transferred subject to the encumbrance now against
it, amounting to $ 2,000. Deed to the above-described land
has this day passed to the party of the second part, and
party of the first part hereby agrees to furnish second party
an abstract, showing good and merchantable title to said
land, free and clear from all encumbrances excepting the
above-mentioned $ 2,000, as soon as said abstract can be
prepared by the abstract company.
"Inasmuch
as second party has purchased the above-described land
without the usual inspection and investigation, and inasmuch as first party has sold the same at a price
lower than any of this near-by land has been sold, it is
agreed between first and second party hereto as follows:
"Party
of the second part shall hold title to said land for one
year, or until such earlier date as said land may be resold
at a profit satisfactory to both parties hereto. Party of the
second part agrees to allow the first party to have the
exclusive reselling of said land for one year, and party of
the second part shall transfer title of said land to the new
purchaser when the first party furnishes such a purchaser who
shall pay enough cash that second party shall receive at
least $ 3,300 from said sale.
"Party
of the first part agrees to use his best efforts in the
selling of the above-described land, and expects to be able
to resell same within one year at $ 25 per acre or more.
Whatever amount may be agreed upon, however, in the reselling
of this land, the amount received above $ 15 per acre shall
be divided equally between the first party and the second
party hereto.
"To
make more certain the reselling of said half section, the
first party does hereby agree to put 100 acres of same into
crop during the spring of 1914. The seed shall be furnished
and the work shall be done at the expense of first party, but
one half the expense of harvesting, threshing, and marketing
said grain shall be paid by the second party, and second
party shall receive one half the crop raised on said 100
acres.
"If,
for any cause, party of the first part is unable to
accomplish the reselling of this land within one year from
date hereof, then the party of the first part reserves the
right to purchase back from second party the above-described
land. And first party does hereby bind himself to purchase
back said land from party of the second part, paying party of
the second part
the sum of $ 3,300 in cash, within one year, for said land,
and taking the same subject to the $
2,000 encumbrance. Said $ 3,300 is to be paid to party of the
second part in cash, in excess of whatever amount is paid to
second party from the proceeds of his one-half share of
crop.
"The
agreements and obligations herein made by the party of the
first part are guaranteed to party of the second part by the
surety bond of even date hereof, signed by party of the first
part and the New England Casualty Company of Boston as
surety, a copy of which bond is attached hereto and made a
part of this contract.
"Witness
our hands and seals this day and year first above written.
"First
Party, N. P. West,
"Second
Party, C. Denecke."
The
bond made and delivered in pursuance of said contract is as
follows:
"Surety
Bond.
"Know
All Men By These Presents: That we, N. P. West, of Linn
County, Iowa, and the New England Casualty Company, of
Boston, are jointly and severally bound and firmly held unto
C. Denecke, of Linn County, Iowa, in the sum of $ 3,300, the
payment of which, well and truly to be made, we hereby bind
ourselves and assigns and legal representatives. The
conditions of the above obligation is as follows, to wit:
"Whereas,
said N. P. West has sold unto C. Denecke the north half
Section 7, Township 2 South, Range 64 West of the 6th P. M.,
Adams County, Colorado, containing 320 acres, more or less,
and has contracted to place in crop 100 acres of same for one
half the crop raised thereon; also to repurchase said half
section at the end of one year from date for $ 3,300 (subject
to its encumbrance of $ 2,000) providing said land has not
been resold by N. P. West prior to that time, and
satisfactory settlement made with C. Denecke:
"Now, Therefore, if said N. P. West shall
resell above-described land or repurchase said land within
one year from date hereof, and pay to said C. Denecke the sum
of $ 3,300 or more for same, in addition to assuming
the $ 2,000 encumbrance thereon, then this obligation shall
be void. Otherwise, it shall be in full force and virtue; and
we do hereby bind ourselves, our assigns, and our
representatives to faithfully fulfill said agreement made by
N. P. West, and contained in the contract attached hereto and
made a part hereof.
"Witness
our hands and seals this 17th day of February, in the year of
our Lord, 1914.
"Seal
impressed:
"New
England Casualty Company, Boston, Mass.
"Incorporated,
1901.
"N.
P. West.
"New
England Casualty Company of Boston,
"By
Thos. B. Powell, Attorney in Fact.
"By
Fred W. Higley, Attorney in Fact."
On
March 22, 1915, the plaintiff brought this action, alleging
breach of the contract and bond on the part of West, and
asking for recovery of his damages against both West and the
Casualty Company. To this action the Casualty Company
appeared, and answered, in substance, that, under its
articles of incorporation, and under the laws of
Massachusetts, where it was organized, and the laws of Iowa,
where the bond in suit was executed, it had and has no power
or authority to issue or enter into bonds or contracts of the
character of the one in suit, and that the instrument sued
upon is, therefore, void. It is further pleaded that the
agents or attorneys who appear to have executed the bond in
the company's name acted without its authority and
without its knowledge or consent, and that the company never
received any compensation for becoming the surety of West,
and that the bond was and is without any
consideration or compensation for the risk so purported to
have been assumed. It is also alleged that, while Higley, who
executed the bond in the company's name, was its agent,
his agency was of a strictly limited kind, and he was
authorized to issue surety bonds only after reporting
applications therefor to the company and receiving its
approval; that no application for this alleged bond was ever
reported by him, nor did he ever report or remit to the
company any collection of the premium thereon.
In
reply, plaintiff alleges that, on and prior to March 14,
1914, the defendant had full knowledge and notice of the
execution of said bond in its name by its agents, but took no
steps to cancel or repudiate such bond, or to notify
plaintiff that the bond was claimed to be ultra
vires; but, on the contrary, knowing that it had been
executed, and that plaintiff was relying thereon, the company
permitted it to stand without objection or denial to the
plaintiff for a full year, and until the expiration of the
full term which said bond was intended to cover. Plaintiff
avers that he did, in fact, rely upon the validity and
binding force of said bond, and took no steps to protect
himself against loss, as he would have done had he known that
the company would deny its liability on the written
obligation made and executed by its agent; and that because
thereof, the defendant is now estopped to plead or deny the
right of the plaintiff to have the same enforced by proper
action in court.
The
issues having been brought to trial to a jury, the plaintiff
put in evidence the deed, contract, and bond already
mentioned, and testified that West failed to accomplish any
sale of the land within the agreed period of one year, and
has ever since failed to repurchase the land or pay the
agreed price therefor, and that said West is now insolvent.
He also introduced the power of attorney given by the bond
company to Fred M. Higley and Thomas B. Powell, authorizing
them to execute surety bonds in the name of
the company, which written power was accompanied by a
resolution of the company's board of directors,
authorizing their president and secretary to execute it. The
instrument is in the following form:
"POWER
OF ATTORNEY
"NEW
ENGLAND CASUALTY COMPANY
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