Goffe v. National Sur. Co.

• Decision Date: 06 October 1928
• Docket Number: 26784
• Citation: 9 S.W.2d 929,321 Mo. 140
• Parties: W. C. Goffe, Receiver of Dilts & Morgan, Inc., v. National Surety Company, Appellant
• Court: Missouri Supreme Court

9 S.W.2d 929

321 Mo. 140

W. C. Goffe, Receiver of Dilts & Morgan, Inc., v. National Surety Company, Appellant

No. 26784

Supreme Court of Missouri

October 6, 1928

Motion for Rehearing Overruled July 20, 1928.

Motion to Transfer to Banc Overruled October 6, 1928.

Appeal from Jackson Circuit Court; Hon. Thad B. Landon Judge.

Affirmed.

Sebree Jost & Sebree and M. M. Bogie for appellant.

(1) The court erred in not giving the defendant's peremptory instruction at the close of the evidence and in not giving defendant's Instructions C-H inclusive and each of them. (a) The evidence did not show a loss to Dilts & Morgan through embezzlement of money by Mathews on any of the six items claimed by the plaintiff. First, meaning of "embezzlement" in the bond. Bank v. Title Guaranty Co., 133 Mo.App. 705; Dominion Trust Co. v Nat. Surety Co., 221 F. 618; U.S. Fidelity & Guaranty Co. v. Egg Shippers, 148 F. 353. Second, no embezzlement of money of Dilts & Morgan by Mathews. State v. Kroeger, 47 Mo. 552; State v. Scott, 301 Mo. 409; State v. Smith, 250 Mo. 350; State v. Fisher, 249 S.W. 46; State v. Peck, 253 S.W. 1019; Treadway v. United States, 266 F. 350; Kansas City Cas. Co. v. Bank, 191 Mo.App. 287. Third, no loss to Dilts-Morgan shown on any item. (b) Breach of warranty by Dilts & Morgan defeats plaintiff's right to recover. Authorities under next point. (2) The court erred in excluding the defense of breach of warranty by Dilts & Morgan. (a) The employer's statement was a warranty and it was breached. Nat. Surety Co. v. Globe Mill Co., 256 F. 601; Guarantee Co. v. Mechanics Co., 183 U.S. 402; Krey Packing Co. v. U.S. Fid. & Guar. Co., 189 Mo.App. 591. (b) Failure to tender return of premium on discovery of breach did not waive the defense of breach of warranty. Schwab v. Brotherhood of Yeoman, 305 Mo. 148; Doerr v. Nat. Fire Co., 285 S.W. 960; Dezell v. Fidelity & Cas. Co., 176 Mo. 253. (c) The tender a few days before trial was timely. Bushong v. Ins. Co., 253 S.W. 175; Adams v. Held, 55 Mo. 468; Thompson v. St. Charles County, 227 Mo. 220. (d) Defendant's knowledge at time bond was issued did not waive the warranty. Salts v. Ins. Co., 140 Mo.App. 142; 4 Joyce, Insurance, secs. 1962, 1970; Alloe v. Mutual Reserve Life Assn., 147 Mo. 561; Krey Packing Co. v. U.S. Fid. & Guar., 189 Mo.App. 591; Commercial Bank v. Am. Bonding Co., 187 S.W. 99. (e) Waiver is a question of fact for the jury. State ex rel. Life Ins. Co. v. Trimble, 310 Mo. 446. (3) The admission of evidence on the issue of vexatious refusal to pay prejudiced the jury against the defendant on the merits of the case and the verdict was based on bias and prejudice. State ex rel. v. Mo. State Life Ins. Co., 295 Mo. 307; Non-Royalty Shoe Co. v. Assurance Co., 277 Mo. 399. (4) The court erred in giving plaintiff's instruction numbered 1. Carroll v. Mo. Pac. R. R. Co., 229 S.W. 234; Carroll v. Ins. Co., 249 S.W. 691; Board of Education v. National Surety Co., 183 Mo. 166. (5) The court committed error in giving plaintiff's instruction numbered 3. State v. Lentz, 184 Mo. 223; Sec. 3327, R. S. 1919; State v. Harmon, 106 Mo. 635. (6) The claim of the plaintiff was not presented within the time provided by the bond. Lyons v. Surety Co., 243 Mo. 607. (7) The court excluded legal and competent evidence offered by the defendant. (a) The deposition of Dewey Hunter. (b) The testimony of Testard as to the contents of the collection blotter and messenger's report. State v. Meyer, 259 Mo. 306; Fuller v. Robinson, 230 Mo. 57; Bird v. Fox, 193 S.W. 941. (8) The judgment was excessive. Board of Education v. Nat. Surety Co., 183 Mo. 166.

McCune, Caldwell & Downing for respondent.

(1) The court did not err in refusing to give defendant's peremptory instructions. (a) There was ample proof of embezzlement of money. State v. Burgess, 268 Mo 407; State v. McCawley (Mo.), 180 S.W. 871; State v. Mintz, 189 Mo. 268; Wells v. Nat. Surety Co., 194 Mo.App. 389; State v. Fink, 186 Mo. 50; State v. Mispagel, 207 Mo. 557; State v. Martin, 230 Mo. 680; State v. Shour, 196 Mo. 202; State v. Morro, 313 Mo. 98; State v. Meininger, 306 Mo. 675; Helfer v. Quarry Co., 208 Mo.App. 58; State ex rel. v. Bonding Co., 279 Mo. 535; State v. Ross, 312 Mo. 510; 2 Morse, Banks and Banking (4 Ed.) sec. 569; State v. Salmon, 216 Mo. 522. (b) Proof of failure of the employee to account for funds in his custody and under his control made out a prima-facie case of fraudulent misappropriation. State v. Morro, 313 Mo. 98; Illinois Surety Co. v. Donaldson, 202 Ala. 183; Fidelity Co. v. Colorado Co., 45 Colo. 443; City Co. v. Lee, 204 Ill. 69; Nat. Life Ins. Co. v. Title Guaranty Co., 185 Ill.App. 221; Champion Ice Co. v. Am. Bonding Co., 115 Ky. 863; U.S. Fid. & Guar. Co. v. Overstreet (Ky.), 84 S.W. 764; American Bonding Co. v. Harvester Co., 91 Md. 733; Granger v. Surety Co., 116 N.Y. 973; Mitchell Grain Co. v. Maryland Cas. Co., 108 Kan. 379. (c) The evidence was ample to support recovery of each of the six items claimed by plaintiff subject to the limit of $ 10,000 specified in the policy. (2) The court did not err in ruling that defendant was in no position to predicate any defense upon the alleged breach of warranty. (a) The statements contained in the so-called employers' declaration are not warranties, the language of the policy being wholly insufficient to make them warranties. (b) Although it be assumed that the so-called employers declaration was warranted to be true and although it be further assumed that said declaration was untrue at the time it was made, no defense may be predicated thereon because: First, defendant knew said declaration was not true in every respect at the time it issued its policy and collected a premium therefor. Second, defendant as a matter of law waived any defense predicated upon an alleged breach of warranty, because with full knowledge it asserted as early as April 3, 1923, that the policy was null and void from the beginning, but retained the premium paid until January 6, 1925, a period of nearly two years. Avery v. Mechanics Ins. Co., 295 S.W. 513; Carroll v. Ins. Co., 249 S.W. 691; Bennett v. Ins. Co., 264 S.W. 30; Drucker v. Ins. Co., 204 Mo.App. 516; Wilson v. Brotherhood, 223 S.W. 994; Weinberger v. Ins. Co., 170 Mo.App. 266; Hayden v. Ins. Co., 221 S.W. 437; Caldwell v. Ins. Co., 245 S.W. 605; Hunt on Tender, sec. 422, p. 474; Smith v. Ins. Co., 267 Mo. 342; Rosenthal Co. v. Ins. Co., 219 S.W. 690; Third Nat Bank v. Ins. Co., 218 Mo.App. 660; Martin v. Ins. Co., 256 S.W. 120; Ward v. Ins. Co., 211 Mo.App. 554; Manning v. Ins. Co., 176 Mo.App. 678; Malo v. Ins. Co., 282 S.W. 78; 3 Joyce, Insurance, 3200, sec. 1949, and p. 3216, sec. 1958; Spencer v. Ins. Co., 236 Ill. 444; McClain v. Assur. Society, 110 F. 80; Daniels v. Ins. Co., 12 Cush. 423. (3) The admission of evidence on the issue of defendant's vexatious refusal to pay the loss was proper and does not affect the judgment under review. Fay v. Aetna Ins. Co., 268 Mo. 373; Block v. Fid. & Guar. Co. (Mo.), 290 S.W. 429; Dolph v. Maryland Cas. Co., 303 Mo. 534; Non-Royalty Shoe Co. v. Assur. Co., 277 Mo. 399; State ex rel. v. Allen, 295 Mo. 397. (4) The court did not err in giving Instruction 1. Sturgess v. Rys. Co., 228 S.W. 861; Maloney v. United Rys. (Mo.), 237 S.W. 515; Berryman v. So. Surety Co., 285 Mo. 379; Browning v. Ry. Co., 124 Mo. 71; Walton v. Carlisle (Mo.), 281 S.W. 402; Hicks v. Simonsen, 307 Mo. 307; Hall v. Iron Works, 296 S.W. 851; Myerson v. Peoples Co., 297 S.W. 455; Secs. 1296, 1513, R. S. 1919; Brice v. Payne, 263 S.W. 1005; Riley v. Independence, 258 Mo. 671; Maloney v. Bank, 288 Mo. 435. (5) The court did not err in giving Instruction 3 defining embezzlement. State v. Burgess, 268 Mo. 407; Hanna v. Ins. Co., 241 Mo. 383; State v. Noland, 111 Mo. 473, State v. Wilcox (Mo.), 179 S.W. 479; 20 C. J. 427, 429; State v. Meininger, 306 Mo. 675; State v. Morro, 313 Mo. 98; Sec. 1276, R. S. 1919; State ex rel. v. Allen (Mo.), 270 S.W. 633. (6) The claim of plaintiff was not untimely presented to defendant. (a) The policy did not require presentation of the claim within three months, when it was undiscovered within that time. (b) Even though the assumption be indulged that the policy required presentation of claim within three months, such fact constitutes no defense, because, first, a forfeiture is not provided for; second, there was a waiver in law of the notice provision; third, the policy contains conflicting provisions regarding time of presentation of claim; and, fourth, the policy is to be construed to effect the intention of the parties. James v. U.S. Cas. Co., 113 Mo.App. 622; Shanebarg v. Society, 263 S.W. 512; Zackwick v. Ins. Co., 225 S.W. 135; Dezell v. Fidelity Co., 176 Mo. 253; 4 Joyce, Insurance, sec. 3282; Carroll v. Ins. Co., 249 S.W. 691; Myers v. Casualty Co., 123 Mo.App. 682; Burgess v. Ins. Co., 114 Mo.App. 169; Okey v. Ins. Co., 29 Mo.App. 105; Shearlock v. Ins. Co., 193 Mo.App. 430; Drucker v. Ins. Co., 204 Mo.App. 516; Roseberry v. Association, 142 Mo.App. 552; Malo v. Ins. Co., 282 S.W. 78. (7) The court did not exclude competent testimony. (a) The rejected part of Hunter's testimony. Authorities under Point 2. (b) The rejected part of Testard's testimony. Secs. 5466-7, 5469, R. S. 1919; Best v. Assurance Society, 299 S.W. 118; State v. Salmon, 216 Mo. 466; Mathes v. Lumber Co., 173 Mo.App. 239; Austin Co. v. Bank, 282 S.W. 105; Gordon Co. v. N. Y. Central Railroad Co., 285 S.W. 755; 22 C. J. 488, 861, 875, 883, 884. (8) The judgment was not excessive as including $ 1075 for accrued interest. Secs. 6337, 6491, R. S. 1919; State ex rel. v. Bonding Co., 279 Mo. 535; Brown v. Assurance Co., 45 Mo. 221; Lawrence v. Society, 277 S.W. 588; White v. Ins. Co., 97 Mo.App. 590; Zimmerman v. Surety Co., 241 S.W. 95;...