Hicks v. National Surety Co.
| Decision Date | 17 February 1913 |
| Citation | 155 S.W. 71,169 Mo.App. 479 |
| Parties | OLIVER D. HICKS, Respondent, v. NATIONAL SURETY COMPANY, Appellant |
| Court | Kansas Court of Appeals |
Appeal from Livingston Circuit Court.--Hon. Arch B. Davis, Judge.
REVERSED AND REMANDED.
Case reversed and remanded for a new trial.
Scott J. Miller and Frank Hagerman for appellant.
(1) An agreement to file the bid was ultra vires, and hence, a breach thereof could not be made the ground for damages. Bank v. Pirie, 27 C. C. A. 171, 82 F. 799; Liggett v. Bank, 233 Mo. 590, 606. Moreover, the bid could not be filed without the bond, which was never execeuted. The contract relied upon must be confined to the alleged agreement to execute the proposal bond. (2) The proof is that there was no oral agreement of the character alleged. (3) Under the statute (R. S. 1909, sec. 2785) the contract must have been in writing signed by an authorized agent. Liggett v. Bank, 233 Mo. 590. The letter of P. O Draper was the alleged writing, but there was neither proof of authority in Draper to execute same nor that he did execute it. It was, on its face, insufficient to show a contract, and could not be pieced out by outside evidence. Reigart v. Coal Co., 217 Mo. 142, (4) There was no direct causal relation shown by the petition or proofs between the alleged breach of contract and the damages actually recovered. The damages claimed were only the profits which would have been made if the contract had been awarded to plaintiff. These, to be recovered, must have been the direct result of the breach of the contract. Trust Co. v Stewart, 115 Mo. 236. That they were not such direct result is clear from the evidence.
James E. Watkins and Paul D. Kitt for respondent.
(a) When one having the right to accept or reject a transaction takes and retains benefits thereunder, he becomes bound by the transaction and cannot avoid its obligation or effect by taking a position inconsistent therewith. And a person by accepting the benefits is estopped from questioning the existence, validity and effect of a contract. 16 Cyc. 787; Light v. Railroad, 89 Mo. 110. (b) Damages for loss of profits are not susceptible of exact proof. They are to be arrived at from the facts and circumstances, characterizing the transaction out of which they accrue; and if the evidence is such as to enable the trier to make a fair and reasonable estimate of them they are recoverable. Hendrix v Railroad, 107 Mo. 140; Stewart v. Patton, 65 Mo.App. 24; Wakeman v. Wheeler Mfg. Co., 101 N.Y 205; Brokerage Co. v. Campbell, 147 S.W. 550. (c) The fact that the obtaining of the contract is contingent, that is, depends on the concurrence of circumstances subsequently to transpire, and which may by possibility not happen, is not an insuperable objection to recovery of damages for such loss. The nature of the contingency must be considered. And if there is proof tending to show that it would happen and sufficient to satisfy the trier this is all that is required. 1 Sutherland on Damages, 126. (d) Appellant cannot avoid liability by showing that respondent's loss might have happened even though appellant had done as agreed. 8 Am. and Eng. Enc. Law (2 Ed.) 608; Lumber Co. v. Water Supply Co., 89 Ky. 340, 25 Am. St. Rep. 536.
--Plaintiff sued and recovered damages for loss of a government contract to carry the mails between the stations and post office in Chillicothe.
The facts are these: The U.S. Government, desiring to let the contract for carrying the mails in Chillicothe for a term of four years, advertised for bids therefor. Under the advertisement all bids were to be submitted on government blanks accompanied by a bond in the sum of $ 3000 signed either by an approved surety company or by two or more personal sureties, in which last event, such personal sureties must be approved by the postmaster. No bid would be considered which did not have such a bond accompanying it, and all bids must be filed with the department in Washington by 4:30 p. m. of December 6, 1910. The right was reserved to the Postmaster General to reject all bids whenever in his judgment the interests of the service required it.
Plaintiff, a young man twenty-two years old, desiring to submit a bid, obtained the proper government blanks for that purpose and took them to the defendant's local agent, Douglass Stewart, at Chillicothe, and there executed a written bid offering to carry the mail for $ 1485 per year. He also signed the bond for $ 3000 attached to said blanks. He then signed a written application to the defendant to become his surety on this bond accompanying the bid, paid $ 10 on the premium, and agreed in the application that in consideration of the defendant acting as surety for him he would, in case his bid was accepted by the Government, send his contract in duplicate to the defendant; that he would at that time forward the premium for the entire term in advance and would not obtain any surety other than the defendant for any reason whatsoever. In this application the defendant reserved the right to decline the application, return the premium paid, and to withhold the reason therefor if deemed necessary and at the top of said application, in prominent red ink, was the following:
The local agent had no authority to execute the bond, of which plaintiff was well aware, but he received the bid, bond and application, and, after helping plaintiff to fill out and execute them, sent them by mail to defendant's State agent or general State agent at Kansas City, a Mr. P. O. Draper. These papers were prepared and sent to Draper on November 28 or 29, 1910. On the second day following, the local agent received from Draper a letter, which omitting defendant's letter head, is as follows:
Chillicothe, Mo.
Dear Sir:
Re Oliver D. Hicks, Bidder Screen Wagon Service Route No. ___ at Chillicothe, Mo.--$ 3000. Bid $ 1,485 annually:
Yours of the 28th inst: I have forwarded the papers to Washington office for execution, as they cannot be executed here. Our Washington office takes care of all details and will execute and file the bond. You will of course remit the premium collected less your commission when making remittance for this month's business.
The local agent showed this letter, on the day it was received, to plaintiff's father, who, fifteen minutes later, told plaintiff of its contents. Before this letter came the postmaster had suggested to plaintiff that, as the time was short, he had better make sure of his bond promptly. Thereupon plaintiff's father made arrangements with two personal sureties to sign a bond and got the postmaster's consent to approve them, as required by the regulations in case of personal sureties. As soon, however, as the above letter came, the arrangement to get these two sureties was dropped as plaintiff relied on the statement in the letter that the Washington office took care of all details and would execute and file the bond.
No further notice was received from defendant in regard to the matter, and plaintiff, thinking his bond had been executed and filed with the department, waited to hear the Government's announcement of the successful bidder, which would be made public on or before January 18, 1911. Sometime after December 6, 1910, the time limit for filing bids, plaintiff read in a paper that the bid had been awarded to another at $ 1540 per year, $ 55 higher than his bid. He then discovered that neither his bid nor bond had ever been filed with the department and went to the local agent to ascertain why they had not been filed. The local agent, not having heard anything, wrote to Draper, the State agent, about it. Draper answered, but his letter was never put in evidence. The local agent in his testimony attempted to tell what Draper wrote, but, on a suggestion of plaintiff's counsel, the court remarked that what passed between Draper and the local agent would not bind the plaintiff, and thereupon the defendant saved an exception but did not further offer to prove, by offering Draper's letter or otherwise, what was done with the application for bond and the bid. Whether defendant accepted said application and then neglected to execute said bond, or executed said bond and then afterwards neglected to file the bid and bond with the department, or whether it declined said application and refused to execute said bond, does not appear in the evidence. It is shown by the testimony of the Second Assistant Postmaster General that neither bond nor bid was ever filed; that the contract was awarded to another at $ 1540 per year, it being the lowest bid; that the National Surety Company was an approved surety at the time the bids were offered; that if plaintiff's bid in the sum of $ 1485, accompanied by a bond signed by the defendant had been filed in due form, it would have been received and considered with the other bids, and, so far as the official knew, an award would have been made to plaintiff if he were not disqualified by some statute to receive the service. He further testified that "The law provides that awards shall be made to the lowest bidder offering sufficient guaranties for the faithful performance of the service, and that rule is followed."
As stated at the outset, the suit is for damages for loss of a government contract. Plaintiff's failure to secure the contract is alleged to have been caused by the defendant's undertaking and agreement, and its subsequent failure, to execute and file in the Post Office Department in Washington a bond required to be filed with plaintiff's bid in...
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