St. Louis Police Relief Association v. American Bonding Company of Baltimore
| Decision Date | 06 June 1917 |
| Citation | 196 S.W. 1148,197 Mo.App. 430 |
| Parties | ST. LOUIS POLICE RELIEF ASSOCIATION, Respondent, v. AMERICAN BONDING COMPANY OF BALTIMORE, Appellant |
| Court | Missouri Court of Appeals |
[Copyrighted Material Omitted]
Appeal from St. Louis City Circuit Court.--Hon. Eugene McQuillin Judge.
AFFIRMED.
STATEMENT.--This is an action by the plaintiff association, a corporation under the laws of this State, to recover upon a bond executed by the defendant to secure the faithful performance of the duties of one John M. Healy as secretary of plaintiff association. There was a verdict and judgment for plaintiff below in the sum of $ 5,000 and interest accrued, and the defendant prosecutes the appeal.
The questions raised on appeal require that the pleadings be noticed with some particularity.
THE PETITION.
The amended petition, on which the case was tried, avers: (1) That defendant was engaged in the business of executing fidelity and insurance contracts and indemnity contracts for profit; (2) that on September 1, 1903, Healy was duly elected secretary of plaintiff association, and so continued until some time in January, 1910, and as such was in charge of certain books, accounts, and moneys belonging to plaintiff (3) that on October 31, 1903, defendant issued to plaintiff its "contract of indemnity" whereby defendant, for a premium of $ paid to it, agreed that it would reimburse plaintiff to the extent of $ 5,000 for any and all loss sustained by it through the larceny or embezzlement committed by said Healy during the term commencing September 1, 1903 and ending September 1, 1904; (4) that, among other things, it was provided in said contract that upon the discovery by plaintiff that a loss had been sustained, notice should be given defendant, and that plaintiff should file its claim with the defendant; (5) that the contract provided that it should not lapse on September 1, 1904, if continued in force by a renewal receipt or renewal receipts executed by defendant, but should continue in force for the term or terms of such renewals, and that renewals were made annually until and including September 1, 1909, the last renewal to expire September 1, 1910; (6) that on or about January 18, 1910, Healy was removed from office, and was then short in his accounts with plaintiff in the sum of $ 13,038.16, which shortage occurred when the said bond was in force and by reason of Healy's personal dishonesty amounting to larceny and embezzlement, and that Healy failed and refused to make good said sum to plaintiff, which was thereby lost to plaintiff; (7) that due notice of the loss and proof of the claim was made to defendant, as required; and (8) that plaintiff "has performed all the conditions of said obligations, as so continued and in force, by it required to be performed."
Judgment is prayed in the sum of $ 5,000, with interest from and after May 18, 1910.
THE ANSWER.
The answer contains no general denial. It (1) denies that defendant issued "a contract of indemnity" to plaintiff. It is then averred: (2) That on October 19, 1903, Healy, plaintiff's employee, executed and delivered to defendant an application whereby he applied to defendant to sign, as security, a "fidelity bond," in which he was to be designated as principal, to be given to the plaintiff to protect the latter to the amount of $ 5,000; (3) that, on or about October 23, 1903, plaintiff executed and delivered to the defendant its "statement" relative to the bond proposed to be given by defendant on behalf of Healey; (4) that pursuant to the terms and conditions of said application, and the statement signed by plaintiff, and "relying upon the statements, warranties, and answers therein contained, defendant executed its fidelity bond, dated the 31st day of October, 1903," in which Healy was designated as principal and as the employee, plaintiff as the employer, and the defendant as surety, "which is the same bond here sued on;" (5) that the bond executed by the defendant contained, "among other conditions," the following: "All the representations made by the employer, his or its officers, to the surety, are warranted by the employer to be true;" (6) that the "statement" provided that the answers given by plaintiff were to be taken as "conditions precedent and as the basis of the bond applied for, or any renewal or continuation of the same."
It is then alleged: (7) That in this statement plaintiff made answer to certain questions stating, among other things, that moneys coming into Healy's hands would be turned over to the treasurer "after each meeting," and would be required to be deposited in a certain bank, and would be withdrawn therefrom only on the official signatures of certain officers of plaintiff association; that Healy would not be authorized to pay out of the cash in his custody any moneys to plaintiff's account; that he would account to "the executive committee" for his handling of funds and securities, and make settlement every quarter; and that his books would be audited and verified with funds on hand and in bank every quarter by the "board of trustees." And defendant then avers "that said answers were conditions precedent and promissory warranties," and that plaintiff failed to comply with the said conditions, and did not require Healy to turn over the funds to the treasurer after each meeting or deposit the same in the bank specified in plaintiff's name; "denies" that the money was only drawn out on the signatures of the said officers of plaintiff, averring that Healy was permitted to draw it out in whatever manner he chose and to pay amounts on account of the association out of the cash, that he was not required to make settlements every quarter, and that his books and accounts were not audited and verified with funds on hand and in bank every quarter by the board of trustees, or at any other time. And it is averred that "the false statements made by plaintiff as aforesaid were made by it for the purpose of inducing the defendant to issue to it the bond sued on, and did induce the issuance thereof, and but for such false statements, answers, conditions and warranties, defendant would not have issued said bond."
The answer further alleges: (8) That the bond sued upon contained, among other "conditions," the following: "That the employer shall observe or cause to be observed all due and customary supervision over said employee for the prevention of default; that there shall be a careful inspection of the accounts and books of said employee at least once in every twelve months from the date of this bond." And defendant "denies that any supervision whatever was exercised by the employer over the employee for the prevention of default, or that there was an inspection of the accounts or books of said employee at least every twelve months from the date of said bond, or at any other time."
It is further alleged: (9) That the bond contained the further "condition," viz.: "This bond shall not lapse at the above time if it shall be continued in force by a renewal receipt or receipts executed by the surety, but shall continue in force for the term or terms of such renewal;" that on September 4, 1904, plaintiff executed and delivered to defendant a certificate stating the books and accounts of Healy had been examined by plaintiff and found correct in every respect, and that all moneys handled by him had been accounted for; that on August 25, 1905, plaintiff executed and delivered to defendant a certificate stating that since the issuance of the bond Healy had faithfully, honestly, and punctually accounted for all money and property in his control or custody, and had always had proper funds and securities on hand; and that on or about August 1, 1906, August 7, 1907, August 18, 1908, and September 9, 1909, plaintiff "executed and delivered certificates and statements covering the years respectively," similar to the certificate of August 25, 1905, and also stating that Healy was "not in default." And it is averred that these certificates and statements were false; that Healy was in default at the time of the execution of each thereof; that, relying upon said certificates, statements, and warranties, defendant each year executed its certificate, renewing said bond up to and including September 9, 1909; that such false statements were made by plaintiff for the purpose of inducing, and did induce defendant to issue its renewal certificates for the bond sued upon, which but for "such false statements and warranties" would not have been issued; and that by reason thereof plaintiff "is estopped to demand indemnity in this case."
As a further defense the answer pleads: (10) That the bond contains the following "condition," viz.: "It is essential to the validity of this bond that it be signed by the employee." And it is averred that when the bond was signed by defendant as surety it was the understanding that it was to be signed by Healy as employee and principal before being delivered to plaintiff; that it was delivered to plaintiff without the signature of Healy, and "without the knowledge or approval of the defendant that it was being delivered without said signature;" that the bond was not thereafter signed by Healy; and that defendant had no knowledge of the fact that it had not been so signed until it was filed as an exhibit to the petition herein. And the answer made tender to plaintiff of the sum of $ 175, the amount alleged to have been paid by it to defendant for the execution of the bond and renewals thereof, averring payment thereof into court for plaintiff.
THE REPLY.
The reply admits that defendant executed its "fidelity bond" dated October 31, 1903, in which Healy was designated as principal and employee, the plaintiff as employer, and defen...
To continue reading
Request your trial