National Union Fire Ins. Co. v. Nevils

• Decision Date: 01 July 1925
• Parties: NATIONAL UNION FIRE INSURANCE CO., a Corporation, Appellant, v. J. E. NEVILS, J. T. SINGLETON and C. E. YEOMAN, Respondents.
• Court: Missouri Court of Appeals

274 S.W. 503

217 Mo.App. 630

NATIONAL UNION FIRE INSURANCE CO., a Corporation, Appellant, v. J. E. NEVILS, J. T. SINGLETON and C. E. YEOMAN, Respondents.

Court of Appeals of Missouri, Springfield

July 1, 1925

Appeal from the Circuit Court of Christian County.--Hon. Fred Stewart, Judge.

REVERSED AND REMANDED (with directions).

Judgment reversed and cause remanded.

Alfred Page and Val Mason, of Springfield, for appellant.

(1) The court should have confirmed the report of the referee, and rendered judgment for the plaintiff as recommended. This for the reason that the testimony of plaintiff's agent was uncontradicted and the testimony of defendant (Nevils) practically admitted the truth of plaintiff's testimony and the correctness of the account. When this is so the court will say as a matter of law that plaintiff is entitled to recover. Springfield Gas & Electric Co. v. Southern Surety Co., 250 S.W. 78. (2) The court erred in sustaining the demurred to plaintiff's petition. (a) Because the defendants had answered after the demurrer in the first instance, and this waived all defects in the petition except the failure to show jurisdiction or a total failure to state a cause of action. Wolz v. Benard, 253 Mo. 68; State ex rel. v. Brite, 224 Mo. 514. (b) The demurrer was properly overruled in the first instance and it was error to sustain it regardless of the waiver just mentioned. The suit was on account with an itemized statement appended as an exhibit. R. S. 1919, sec. 1258; Commission Co. v. Block, 130 Mo. 668; Connor v. Heman, 44 Mo.App. 346. (c) Plaintiff was not required to set out in the petition, in separate count, each item relied on as a breach of the bond. Rissler v. Insurance Co., 150 Mo. 366. (d) The language of the bond is so plain and explicit that there can be no doubt that it includes the return of the unearned commissions. Evans v. F. & G. Co., 195 Mo.App. 438; Lyonburger v. Krieder, 88 Mo. 165-6.

J. S Clarke, of Ava, for respondent.

The demurrer to appellant's petition should have been, as it was afterwards, sustained. Appellant will not be permitted to cancel its agent's work in procuring these great number of policies, and demand of him the return of the unearned premiums paid back to the policyholders, without some cause or excuse therefor. This would be taking advantage of appellant's own wrong. Shirt Company v. Sacks, 184 Mo.App. 157; Lewis v. Atlas Mutual Ins. Co., 61 Mo. 534; Pond v. Wyman, 15 Mo. 175; Dobyns v Edmonds, 18 Mo.App. 307; Williams v. Bank of U.S. 124 N.Y. 184; Pixlee v. Buick Motor Co., 198 S.W. 86; Cape Brewing & Ice Co. v. Kippenberg, 188 Mo.App. 499; Paul Wolff Shirt Co. v. Sacks, 184 Mo.App. 157; Trust Company v. Tindle 272 Mo. 681; Jones v. Alf Bennett Lumber Co., 175 Mo.App. 26. The demurrer being re-filed after answer filed, is deemed a withdrawal of the answer, and although the record does not show the withdrawal of defendant's answer, the refiling of demurrer is equivalent to such withdrawal of the answer. Dunklin Co. v. Clark, 51 Mo. 60; Henley v. Henley, 93 Mo. 95; State ex rel. v. Bright, 224 Mo. 514. The court was fully sustained in its action in sustaining respondent's exceptions to the referee's report, and in refusing to accept said report. In proceedings upon a bond as this one in suit, the measure of liability of such bondsmen is fixed by the terms of the instrument, they signed, and such terms cannot be enlarged or varied by judicial construction. The appellant must stand or fall upon the very terms expressed in the obligation in such bond, and no other. C. H. Albers Commission Co. v. Spencer, 139 S.W. 321; Trust Company v. Tendel, 272 Mo. 681; Suburban Mutual Building & Loan Assn. v. J. D. Paulus, 80 Mo.App. 36. In case of W. T. Raleigh Medical Company v. Modde, the Supreme Court held that "the liability of a guarantor is strictly confined within the bonds of his contract. The principal debtor and creditor can do nothing to increase his liability. And any attempt on their part to interfere with the rights or liability of the guarantors, frequently result in their discharge from liability." In this case the bond signed by these two defendants undertakes to indemnify the appellant on account of "all amounts due or that may become due to it from time to time for monies collected and received by him for premiums on policies of insurance and renewals thereof, or on any other account whatever." These conditions do not make respondents liable for "commissions on unearned returned premiums on cancelled policies." This condition, however, is inbodied in the agent's contract with plaintiff, but which contract these respondents did not sign, or even know of. Appellant, no doubt, had the right to revoke its agent's contract, as it did, but not to the detriment of the agent, where the agent, in good faith, performed services, and expended money by way of expenses, while in the principal's services. McCray v. Frost, 181 Mo.App. 672; Grover v. Henderson, 120 Mo. 367; Burk v. Priest, 50 Mo. 310. The referee held that respondents were held by the contract as well as the bond. Respondents maintain they cannot be held for these unearned, returned premiums, as there is no such obligation or condition expressed or implied in the bond they signed. Burley v. Hitt, 54 Mo.App. 272; W. T. Raleigh v. Abernathy, 196 S.W. 1042; Fisher v. Cutter, 20 Mo. 206; W. T. Raleigh Medical Co. v. Modde, 209 S.W. 958. The respondents were entitled to a trial by a jury. The record in this case is a short one, and in no way complicated, requiring a referee to find the facts. The object in securing a reference, which was a "forced one," was to avoid trial by jury. Vol. 1, sec. 1426, R. S. 1919; Creve Coeur & Co. v. Tamm, 138 Mo. 385; Thornton v. Life Assn., 7 Mo.App. 544. On page 36 of appellant's printed abstract, J. E. Nevils testifies before the referee that he had never made any appearance, or employed any attorney to represent him, and only appears before the referee as a witness. This was sufficient ground for setting aside the report of the referee, the judgment rendered by him, being a joint judgment against the defendants, Nevils, Singleton and Yoeman. There was no offer to dismiss as to Nevils, and he is still a defendant in the case. R. S. 1919, secs. 1182, 1183 & 1184; In re Condemnation of Land for Opening and Establishing a Parkway in Kansas City, 176 S.W. 529 and 188 Mo.App. 576.

COX, P. J. Bradley and Bailey, JJ., concur.

OPINION

COX, P. J.--

J. E. Nevils was agent for plaintiff in writing insurance and executed to plaintiff his bond in the sum of $ 500 with the other two respondents as sureties. Nevils' agency was terminated by appellant and this suit was brought upon the bond to recover the full amount thereof, the petition alleging that Nevils was indebted to plaintiff in the sum of $ 524.26. A demurrer to the petition was filed and overruled. Answer was then filed. On motion of plaintiff the case was referred to a referee. The referee heard the evidence and filed a report in which he recommended that judgment be entered in favor of plaintiff for $ 500, the penalty of the bond. Exceptions to the report of the referee were filed by the sureties, Singleton and Yeoman. The exceptions were sustained but upon what ground does not appear of record. The defendants, Singleton and Yeoman, then refiled the demurrer to the petition without withdrawing the answer. The court then sustained the demurrer and plaintiff refusing to plead further, judgment was entered against it and it then appealed.

The petition alleged the employment of Nevils as agent for plaintiff and the execution of the bond sued on and alleged the condition of the bond to be in part that Nevils should pay all sums collected by him and pay unearned premiums on policies of insurance that might be cancelled. The petition then alleged as a breach of the bond that Nevils had failed to return and pay to plaintiff the unearned commissions on cancelled policies to the amount of $ 524.60 and asked judgment for $ 500, the penalty of the bond.

The demurrer to the petition specified three grounds:

First: That the petition did not state any cause of action against defendants.

Second: Because the petition is based upon a contract between the plaintiff and J. E. Nevils and the contract or a copy thereof was not filed.

Third: That the bond is so indefinite, uncertain and ambiguous in its terms that it could not be binding upon defendants as alleged in the petition.

Of these in inverse order. It is contended that the terms of the bond do not cover liability for failure to return to plaintiff unearned commission resulting from the cancellation of policies. The condition of the bond is not copied in the petition but the allegation in the petition which pleads the terms of the bond specifically states that it covers unearned commissions on cancelled policies and hence the petition is not open to that objection. Whether the bond in fact covers unearned commission on cancelled policies is a question to be determined when the court is called upon to construe the bond and since the bond is not copied in the petition, its construction is not involved in considering a demurrer to the petition. The allegations of the petition determine its sufficiency and we hold this petition good as against the third ground of the demurrer.

The second ground is based on the fact that the agency contract between plaintiff and J. E. Nevils or a copy thereof is not filed with the petition. This suit is on the bond and a copy of it is filed. While the agency contract between plaintiff and Nevils would be competent evidence in determining whether or not Nevils was indebted to plaintiff the suit was on the bond and not on that contract, hence the bond was the...