Hartford Fire Ins. Co. v. Casey

• Citation: 191 S.W. 1072,196 Mo. App. 291
• Decision Date: 29 January 1917
• Docket Number: No. 12254.,12254.
• Parties: HARTFORD FIRE INS. CO. v. CASEY et al.
• Court: Court of Appeal of Missouri (US)

191 S.W. 1072

196 Mo. App. 291

HARTFORD FIRE INS. CO. v. CASEY et al.

No. 12254.

Kansas City Court of Appeals. Missouri.

January 29, 1917.

Appeal from Circuit Court, Jackson County; Kimbrough Stone, Judge.

Suit by the Hartford Fire Insurance Company, a corporation, against Sam L. Casey, wherein Casey's surety, William A. Nettleton, made defense. From a judgment for plaintiff, the surety appeals. Judgment affirmed conditionally upon plaintiff's entering a remittitur.

Frank F. Brumback, of Kansas City, for appellant. W. B. Kelley, of Kansas City, for respondent.

TRIMBLE, J.

Plaintiff insurance company sues upon a bond given to it by one of its agents for the faithful performance of his duties. The agent, Sam L. Casey, and principal in the bond, filed no answer in the case. The surety, William A. Nettleton, made defense. A jury was waived and the cause was tried by the court. Judgment was rendered in plaintiff's favor for $2,500, the full amount of the bond, and for $250 attorney's fee, aggregating the sum of $2,750. The surety has appealed.

Casey was appointed agent April 1, 1904, and the bond was executed and delivered on that date. It was in the regular form of a bond in the sum of $2,500, with the collateral condition therein that:

"If the said Sam L. Casey shall in all respects faithfully and well perform his duties as such agent and observe and fulfill the instructions and directions, general and special, which may from time to time be given to him by said company and its authorized officers and agents, and duly and punctually account for, pay over and properly apply all premium moneys due and payable upon and by the terms of policies issued by the said agent, whether at that time collected by the said agent or not, and all other sums of money which may come to him as such agent, or for and on account of said company, and duly and properly account for and apply all goods, chattels, or other property which may come into his possession or under his control as such agent, or for said company, and, upon the termination of his agency, from whatever cause, immediately account for and pay over unto said company all moneys in his hands as such agent, or that may then be due from him to said company, and deliver up to said company or such person or persons as it may designate all supplies, blanks, accounts, memoranda, records of business done for or upon account of said company, and other property, things and effects of said company, then this obligation to be void and of no effect, but otherwise to remain in full force and effect."

The instrument then closed with the following paragraph appearing just above the signatures:

"It is further covenanted and agreed by said above bounden parties that if suit be brought to enforce any of the obligations of this bond, the said company shall, in case of recovery, be allowed a reasonable attorney's fee, and all costs, expenses and cash outlays arising, to be paid in addition to the amount otherwise recovered; and the said sureties waive notice of any default the said above bounden principal may at any time make, and hereby agree that failure to give such notice shall not, in any manner, affect their obligations under this bond."

No question is made over the authority of the plaintiff to take the bond, nor of its due execution. It is conceded that on August 9, 1913, the agent Casey was indebted to plaintiff in the sum of $2,711.03 for premiums collected by him on policies issued during the months of April, May, June, July, and August, 1913; and that on said date demand was made of said agent and his surety for the payment of said amount, and that payment has not been made. Suit was brought February 14, 1914.

The defense of said surety was made upon what may be divided into three grounds: (1) That on December 20, 1912, the plaintiff terminated the agency and suspended the authority of said agent to issue policies until he should pay all premiums due the company and collected by him up to November 1, 1912; that afterwards, upon the payment of all sums due from him up to November 1st, the company reinstated him as agent; that the surety knew nothing of this, and the suspension and subsequent reinstatement was, as to such surety, a cancellation of the old contract of agency and the making of a new contract, for the performance of which he was not liable. (2) That said agent, prior to December 20, 1912, had misappropriated and converted to his own use the premiums he had collected and then owed, and that plaintiff, with knowledge of said agent's dishonest conduct, neither notified the surety nor discharged the agent, but continued to allow him to act in that capacity, whereby the surety was released and discharged from liability for all losses arising from the subsequent defaults of such agent. (3) That during the continuance of said agency the plaintiff, without notice to the surety, changed the postage allowable to the agent from 15 cents per policy to 5 cents, and required the agent to remit premiums in 45 days after the issuance of the policy instead of 75 days, and that by reason of such changes in the contract of agency without notice to the surety, the latter was released.

With reference to the first ground above mentioned, the evidence discloses no discharge and reinstatement of said agent whereby a new contract of agency was created. It seems that the agent did get behind in his remittances to the company, and that a large amount of correspondence passed between them in relation thereto, the agent sending in small amounts from time to time and asking for time as to the balance due and giving various reasons for not sending same in at the time promised; and that finally the company notified him that his authority to accept new risks was suspended until he should make settlement, and for a period of 4 days, according to plaintiff, and 15 days, according to the agent, he wrote no new policies. But he had many other duties to perform in addition to writing policies, namely, collect premiums, make proofs of loss, cancel insurance and return premiums, report losses, adjust some of them, pay some of them, and correspond generally with the company in regard to the business. All these duties the agent continued to perform without interruption during the few days he did not write new insurance. He continued in charge of the office and of the plaintiff's business, and the correspondence shows that he was still agent during that time. He paid up the amount due and resumed writing new risks and collecting new premiums. His compensation was not a fixed salary, but was a commission of 15, 20, and 25 per cent. according to the character of the work done, and there was no change in said compensation from the time the bond was given in 1904 to the date of the ending of said agency in August, 1913.

Under the evidence, the trial court sitting as a jury was clearly justified in finding that there was no termination of the agency or creation of a new contract in relation thereto, and that the surety could not rightfully claim to be discharged on that account. In April, 1913, the plaintiff, along with other insurance companies, having gotten at outs with the General Assembly over the passage of the Orr law, notified all its agents, including Casey, not to write new insurance until the matter was adjusted,...