Home Indemnity Co. v. State of Missouri
| Decision Date | 01 July 1935 |
| Docket Number | No. 10211.,10211. |
| Citation | 78 F.2d 391 |
| Parties | HOME INDEMNITY CO. v. STATE OF MISSOURI et al. |
| Court | U.S. Court of Appeals — Eighth Circuit |
D. A. Murphy, of Kansas City, Mo. (John T. Harding and R. C. Tucker, both of Kansas City, Mo., on the brief), for appellant.
Gilbert Lamb, of Jefferson City, Mo. (Roy McKittrick, Atty. Gen., and John W. Hoffman, Jr., Asst. Atty. Gen., on the brief), for the State of Missouri et al.
Before STONE, WOODROUGH, and BOOTH, Circuit Judges.
This is an action by the state of Missouri upon a surety bond given by the Southern Surety Company, a New York corporation, as principal, and the appellant, Home Indemnity Company, as surety, to qualify the principal to continue to carry on its compensation insurance business in Missouri. The action is for the use and benefit of any and all persons, firms, and corporations entitled to compensation under the Workmen's Compensation Law of the state of Missouri () on policies issued by the Southern Surety Company. The case was tried to the court without the intervention of a jury, and, from a judgment in favor of plaintiff, the surety, Home Indemnity Company, prosecutes this appeal.
On September 11, 1928, the Southern Surety Company of New York was licensed and authorized by the insurance department of the state of Missouri to issue to employers its policies of insurance under the Workmen's Compensation Act. Its certificate of authority was renewed annually on the 1st day of March and remained in full force and effect until March 1, 1932.
In July, 1931, the surety company was notified by the superintendent of insurance of the state of Missouri that, in accordance with section 5935 of the Revised Statutes of Missouri 1929 (Mo. St. Ann. § 5935, p. 4525), known as the "Retaliatory Clause,"1 the company would be required to furnish a bond or deposit in the same form and amount as had been required by the state of New York of Missouri corporations doing business in the state of New York under the provisions of Workmen's Compensation Act, § 54, chapter 66 of Cahill's Consolidated Laws of New York 1930.2 Theretofore no such bond had been required from the Southern Surety Company as a condition of its authority to issue compensation policies in Missouri.
To satisfy this request from the Missouri superintendent of insurance, the bond in suit was executed on August 13, 1931, in the same form as was exacted under the laws of the state of New York from foreign corporations doing such business in that state. The form of the bond was supplied by the superintendent, and its provisions are as follows:
Prior to August 13, 1931, the date of the execution of this bond, the Southern Surety Company had issued a large number of policies of compensation insurance to employers in Missouri, which were acceptable under and in conformity with the provisions of the Workmen's Compensation Act of the State of Missouri, and many accidents had occurred and many awards had been made by the Missouri Workmen's Compensation Commission upon claims arising under such policies. On September 17, 1931, the appellant contracted to reinsure all policies of the Southern Surety Company which were in force and effect at midnight September 30, 1931, as to all claims that might arise on liabilities or accidents accruing after that date. The Southern Surety Company thereafter continued its business of writing compensation insurance in Missouri until March 22, 1932, the date of its dissolution in the state of New York. It appears that under the contract of reinsurance the appellant has paid in full all compensation due under policies issued on and after August 13, 1931, the date of the bond here in suit, but that there are unpaid claims and awards under policies issued by the Southern Surety Company prior to that date exceeding in the aggregate the penal sum of the bond.
The trial court held that it was the intention of the parties to said bond that the obligations thereof should apply to compensation on account of accidents to the employees of employers insured by the Southern Surety Company under policies issued prior as well as subsequent to the date of the execution of the bond in suit. It also held that the "Retaliatory Clause" of the Missouri Statutes was constitutional. By appropriate assignments, the same issues are presented upon appeal.
The bond upon which this suit was brought was executed to comply in form and substance with the provisions of the New York statute, set out in the footnote, governing the rights of foreign insurance corporations doing business in New York. Under the "Retaliatory Clause" of the Missouri statutes, supra, New York corporations "transacting or seeking to transact" an insurance business in Missouri are subject to all the requirements exacted of foreign corporations doing a similar business under the statutes of New York. The scope of the surety's obligation under such a statutory bond is prescribed by the statute in compliance with which it is given and by the language employed in the bond defining it. Zellars v. National Surety Co., 210 Mo....
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