The Springfield Lighting Company v. Hobart
| Decision Date | 02 June 1902 |
| Parties | THE SPRINGFIELD LIGHTING COMPANY, Respondent, v. B. F. HOBART, Appellant |
| Court | Kansas Court of Appeals |
Appeal from Polk Circuit Court.--Hon. Argus Cox, Judge.
AFFIRMED.
Judgment affirmed.
Adiel Sherwood for appellant.
(1) The liability of the surety depends upon the identity of the contract, and the identity of the contract depends upon the identity of the obligee and the time, place, terms and conditions therein named and stated. The liability of the surety is always strictly construed, and any variation of the contract which changes the identity of person, time, place terms and conditions, without his consent, releases the surety. Miller v. Stewart, 9 Wheat. 680; McMicken v. Webb, 6 How. (U.S.) 292; Martin v Thomas, 24 How. (U.S.) 315; United States v Boyd, 15 Pet. 187; Smith v. United States, 2 Wall. 219; United States v. Ulrici, 111 U.S. 38; United States v. Freel, (C. C. A.), 99 F. 237; Nisbet v. Smith, 2 Bro. Ch. R. 579; Rees v. Berrington, 2 Ves. Jr. 540; Boultby v. Stubbs, 18 Ves. 20; Nofsinger v. Hartnett, 84 Mo. 549; Ludlow v. Simond, 2 Caines Cas. 1; Lang v. Pike, 27 Ohio St. 498; State v. Medary, 17 Ohio 565; Winston v. Rives, 4 Stewart and Porter (Ala.) 269; Morgan Co. v. Selman, 6 Ga. 440; Nolley v. Callaway County Court, 11 Mo. 463; State to use v. Boon, 44 Mo. 254; Blair v. Ins. Co., 10 Mo. 559; Weston v. Barton, 4 Taun. 673; Wright v. Russell, 2 Black. 934; Parker v. Park, 1 Term; Billair v. Ellsworth, 3 Camp. 52; Cranor v. Reardon, 39 Mo.App. 306; Sharp v. Bedell, 5 Gilm. (Ill.) 88; Myers v. Parker, 6 Ohio St. 501; Land v. Pike, 26 Ohio St. 498; State to use v. Thomas, 19 Mo. 613; State v. Sandusky, 46 Mo. 381; Orrick v. Vahey, 49 Mo. 428; Fisher v. Cutter, 20 Mo. 206; Glover v. Robbins, 49 Ala. 219; White v. Hass, 32 Ala. 430; Crane Co. v. Specht, 39 Neb. 123; Dance v. Girdler, 4 Bos. & Pul. 34; Bensinger v. Wren, 100 Pa. St. 500; Bank v. Kaufman, 93 N.Y. 273; Bank v. Diefendorf, 90 Ill. 396; Walsch v. Bailie, 10 Johns. (N. Y.) 180; Pennoyer v. Watson, 16 Johns. (N. Y.) 100; Taylor v. Wetmore, 10 Ohio 491; Taylor v. McClung, 2 Houst. 24; Burge on Suretyship, ch. 3; Grant v. Naylor, 4 Cranch 224; Nesbitt v. Turner, 155 Pa. St. 439; Warden v. Ryan, 37 Mo. 466; Reese v. United States, 13 Wall. 13; Bank Assn. v. Conklin, 90 N.Y. 116; Fellows v. Prentiss, 3 Denio 521; Ward v. Stahl, 81 N.Y. 406; Barnes v. Barrow, 61 N.Y. 39; Brickhead v. Brown, 5 Hill 635; McClusky v. Cromwell, 11 N.Y. 598; Taylor v. Jester, 23 Mo. 244; Lord Arlington v. Merrick, 2 Saund. 411; McCartney v. Ridgway, 160 Ill. 129; Bauer v. Cabanne, 105 Mo. 110; Baker v. Merryman, 97 Ind. 539; State v. Blake, 2 Ohio St. 147; Brandt on Suretyship, sec. 121; Bridges v. Blake, 106 Ind. 335; Oil Co. v. Arnestad, 34 L. R. A. 861; 2 Bates on Part., secs. 648-655; Assurance Co. v. Bald, 6 Adol. & Ell. 514; Ins. Co. v. Scott, 81 Ky. 540; Bank v. Hall, 101 U.S. 43; Ins. Co. v. McElroy, 83 F. 641; Robinson v. Berryman, 22 Mo.App. 509; 1 Brandt, Suretyship & Guaranty (2 Ed.), secs. 117, 118, 119, 122, and vol. 2, secs. 385, 386, 387, 388, 389, 392, 393. (2) Compliance with section 1334, R. S. 1899 (2786, R. S. 1889) produces "one corporation" the same as if an original application were made upon and under articles of association under the statute. State ex rel. v. Lesueur, 145 Mo. 322. (3) The Metropolitan Electric Railway Company was not required to perform the contract after the consolidation and certainly the case is stronger in favor of the surety than in favor of the principal. Lansden v. McCarthy, 45 Mo. 106; Hardy Implement Co. v. Iron Works, 129 Mo. 222; Arkansas Valley Smelting Co. v. Belden Mining Co., 127 U.S. 379. And even so, the contract which the surety agreed to secure could not be performed, for that the obligee therein named, no longer existed.
Jas. R. Vaughan for respondent.
(1) The contract of a surety should be construed like any other contract with a purpose, however, of holding him only to the extent of the exact terms of his obligation with no strained construction to relieve him from it. Beers v. Wolf, 116 Mo. 179. (2) Further, as to effect of the consolidation, and that it makes no new corporation so far as creditors and debtors are concerned, see 1 Thompson on Corporations, sec. 365, and note. Miller v. Lancaster, 5 Cold. 574; Thompson v. Abbott, 61 Mo. 176; Bank v. Phelps, 97 N.Y. 44; 2 Elliott on Railroads, sec. 329; Berry v. Railroad, 52 Kan. 759; Morawetz on Private Corps., secs. 809, 955-6. (3) As showing that the new company is the old company, it may be stated that subscription made to one railroad prior to its consolidation with another road, will pass to the new company and may be collected by it. Scott v. Hasheer, 94 Ind. 1; State ex rel. v. Greene County, 54 Mo. 540; Railroad v. Philips, 25 Kan. 261; East Lincoln v. Davenport, 94 U.S. 101; Railroad v. Brown, 26 Ohio St. 223; Sparrow v. Railroad, 7 Ind. 369; Bates County v. Winters, 112 U.S. 325; Chickaming Twp. v. Carpenter, 106 U.S. 663. (4) Exemptions from taxation granted by charter or otherwise to one of the original companies will pass to the new company and be enforcible by it after the union. 2 Elliott on Railroads, secs. 330 and 886; 3 Wood's Railways, page 1685 and note; State ex rel. v. Railroad, 99 Mo. 30. (5) It is held that a change in the charter of a corporation, even to such an extent as to substantially change the character or objects of the corporation, will not release the stockholder on his subscription. Railroad v. Hughes, 22 Mo. 291; Ins. Co. v. Beckmann, 47 Mo. 93; College v. Robertson, 67 Mo.App. 329.
--It appears from the allegations of the plaintiff's petition that "The Springfield Electric Lighting Company," the "Springfield Gas Light Company" and the "Metropolitan Electric Railway Company" were each corporations created and organized under the provisions of article 8, chapter 42, Revised Statutes 1889, and that the first two of them were, on the 30th of June, 1893, under the authority conferred by section 2876 of said article, consolidated and united under the name of the Springfield Lighting Company, the plaintiff. It further appears that sometime prior to the said consolidation, the said Metropolitan Electric Railway Company entered into a written contract with the said Springfield Electric Light Company whereby the former agreed and bound itself to furnish and supply the latter power to operate its lighting apparatus, as therein specified, for a period of ten years. It still further appears that at the time of the entering into said contract, the said Metropolitan Electric Street Railway Company and Hobart, the defendant, entered into a certain bond, by which they bound themselves to pay the said Springfield Electric Light Company the sum of three thousand dollars, conditioned that if said Metropolitan Electric Railway Company should do and perform, on its part, all the conditions required of it by the terms of said contract fully and completely, then said bond was to be void, otherwise to remain in full force. It is also further disclosed by the allegations of the petition that at the time the said contract was entered into, the Springfield Electric Lighting Company was engaged in furnishing light both to the city and to individuals therein, and that after the creation of the consolidated company, the plaintiff, "holding and enjoying all the rights, privileges, power, franchises and property belonging to each of the incorporations out of which it was formed," continued to furnish light to the said city and individuals therein, as the said Springfield Electric Light Company had done, and that the said Metropolitan Electric Railway Company supplied it with power, and otherwise complied with the requirements of said contract as it had done before the consolidation, until a certain named date, when it refused further compliance, etc.
The defendant interposed a demurrer to the petition on the ground that it shows upon its face that the alleged bond, upon which defendant was security, was given to the Springfield Electric Lighting Company as obligee, while the plaintiff in this case is a separate and different legal entity. The court overruled the demurrer, and the defendant having elected to stand thereon, and declining to plead further, judgment was given for the plaintiff. The defendant, by his appeal, has brought before us for review the action of the trial court in overruling his demurrer to the petition. In support of the ground of such demurrer, the defendant contends (1) that the defendant, as surety, bound himself to "indemnify the Springfield Electric Lighting Company for the failure of the Metropolitan Electric Railway Company to supply electric power to that company, but did not bind himself to indemnify the plaintiff, another and different legal entity, and (2) that by reason of the amalgamation of the Springfield Electric Lighting Company with the Springfield Gas Light Company, and by which another company was formed, it was made impossible for the Springfield Electric Railway Company to furnish electric power to the Springfield Electric Lighting Company. If these contentions can be sustained, it is quite manifest that the demurrer should have been sustained, and whether or not they should be, is to be determined by the construction placed upon the contract of suretyship.
I. It appears that the rule prevailing in respect to ordinary contracts of suretyship is that the surety is the favorite of the laws, and has the right to stand upon the strict terms of his obligation. Brandt on Suretyship, sec. 97; Bayless on Sureties, 144, 145, 260. He can not be carried beyond his contract; the contract made by the parties must be judged of and not another...
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