Thomas v. Land

• Decision Date: 05 May 1930
• Parties: AMOS THOMAS, AGENT, APPELLANT, v. MARION O. LAND ET AL., RESPONDENTS
• Court: Kansas Court of Appeals

30 S.W.2d 1035

225 Mo.App. 216

AMOS THOMAS, AGENT, APPELLANT, v. MARION O. LAND ET AL., RESPONDENTS

Court of Appeals of Missouri, Kansas City

May 5, 1930

Appeal from Circuit Court of Buchanan County.--Hon. L. A. Vories Judge.

AFFIRMED.

Judgment affirmed.

John C Landis, Jr., John C. Landis, III, and Wm. H. Utz for appellant.

Mayer Conkling & Sprague for respondent.

ARNOLD, J. Bland, J., concurs. Trimble, P. J., absent.

OPINION

ARNOLD, J.

This is an action to recover an unpaid premium for a surety bond. Plaintiff is the liquidating agent for the matters here in question for the department of trade and commerce for the State of Nebraska, a duly organized and existing department of that State, and, as such, was authorized to take charge of and administer the affairs of insolvent insurance companies within said State, under and by virtue of section 3, chapter 190, article 3, Session Laws 1919.

Under the provisions of said laws of the State of Nebraska, by regular order of court in and for Douglas County, the following was made of record:

(1) The Department of Trade and Commerce of Nebraska had filed a petition alleging that after an examination of Lion Bonding and Surety Company said company was in such condition that its further transaction of business was hazardous to policy holders, creditors, stockholders and the public, and had been violating the law, and said petition prayed for authority to take possession of said Lion Bonding & Surety Company, and

(2) That the court found the allegations of the above petition to be true, and

(3) Ordered the Department of Trade and Commerce to take and retain possession of the business and records of the bonding company until such time as it should be shown to the court that the cause for the order shall have been removed.

On May 28, 1921, in accordance with a petition theretofore filed alleging the insolvency of said bonding and surety company, a corporation organized and existing under the laws of the State of Nebraska, the court entered a supplementary order directing the department of trade and commerce to take charge of and liquidate the business of the said Lion Bonding & Surety Company. The said court, by order dated at Omaha, Nebr., March 11, 1924, approved the appointment of one Lee Hardman, as special agent of the Department of Trade and Commerce, to take charge and have control of the matter of winding up the affairs of said Bonding Company, effective on the 1st day of April, 1924. Thereafter, on January 2, 1926, by proper order, the court relieved said Lee Hardman as special agent and appointed one Amos Thomas to act as such special agent.

Defendants are a co-partnership, doing business under the firm name of Land & Sampson, engaged in the contracting business and located at St. Joseph, Missouri. The amended petition charges that on November 9, 1920, the Platte River Drainage District No. 1 of Buchanan County, Missouri, through its board of supervisors, entered into a contract with defendants to execute and complete work and improvements required by the plans and specifications with respect to a certain reclamation project and to furnish all material and labor necessary therefor, in compliance with certain stipulations; that, in connection therewith, defendants were required to execute a surety bond in the penal sum of $ 110,000; that for and in consideration of $ 3220.44, and pursuant to a written application, the Lion Bonding & Surety Company executed a bond in said penal sum of $ 110,000, indemnifying said drainage district against loss on account of any failure of defendants to carry out the terms of said contract; and to pay any and all sums of money which might have been expended by the said drainage district on account of any default of defendants in connection with said work.

The petition alleges that, subsequent to the execution and delivery of said surety bond, the said Bonding Company became insolvent and its affairs were taken over by the Department of Trade & Commerce of Nebraska, of which plaintiff is the liquidating officer; that subsequent to the insolvency of said Bonding Company, all provisions of said contractor's bond were carried out and complied with, and the same remained in full force and effect until the completion and acceptance of the work and until all claims of every kind and character were paid and discharged; that demand has been made on defendants for the payment of the premium of said bond which was refused. Judgment is asked in the sum of $ 3220.44, with interest and costs.

The answer admits the application for, and execution of, the bond as alleged in the petition and, as affirmative defense pleads a total failure of consideration for said bond and the premium thereon; that, prior to April 12, 1921 and on that date said Bonding Company was insolvent; that it committed a breach of said bond and contract and was unable to carry out and perform the provisions of the contract as stipulated in the alleged bond; that, at the February term, 1921, of the District Court of Douglas County, Nebr., the court declared the said Bonding Company "to be in such a condition that its further transaction of business would be hazardous to its policy holders, its creditors, its stockholders, and to the public," and directed the Department of Trade & Commerce to take possession and conduct its business until such time as, after a hearing, it should appear that the cause of the order had been removed.

It is further pleaded in the answer that the contract between defendants and said drainage district provided said work should begin May 1, 1921, and that such fact was known to the said Bonding Company; that the application for said bond recited the work for said drainage district was to be started not sooner than May 1, 1921, and such recital was known to said Bonding Company on November 9, 1920; that the work under the provisions of said contract did not, in fact, begin until July, 1921, which fact was known to said Bonding Company and to plaintiff herein; that said Bonding Company incurred no liability whatever by the issuance of said paper writing or the issuance of said alleged bond, filed prior to and before the said Bonding Company incurred any liability thereunder, and before either the said drainage district or defendants derived any benefits therefrom; that before either defendants or said drainage district derived any benefit or advantage therefrom, the said Bonding Company became and was unable to perform any of the conditions of said alleged bond; that because of the insolvency of said Bonding Company, and because of its inability to perform any of the conditions of said alleged bond, the said drainage district refused to accept said alleged bond and required defendants to give a new and different bond at a cost to defendant of $ 800.00, before permitting defendants to proceed with the work; which said new and different bond was given after April 12, 1921, and which said bond remained in force until after the completion and acceptance of the work and payment of all claims arising thereunder; that, by virtue of the terms of the said alleged bond of Lion Bonding & Surety Company, and by virtue of the agreement between it and defendants, at the time of its issuance, the same did not become effective before the work under the contract with the drainage board was begun, and the premium thereon did not become due until defendants were paid enough on said contract with the drainage district to pay said premium.

Defendants specifically deny that said alleged bond, executed by the Lion Bonding & Surety Company on November 9, 1920, was in effect until the completion and acceptance of the work done under the contract with the drainage district, and deny that said bond was ever in effect; they state said Bonding Company was unable to, and did not, carry out and comply with the terms of said alleged bond and did not comply with the application of the defendants for a bond.

The answer further avers that defendants never agreed to pay any premiums whatever to the Bonding Company; deny they are indebted to said Bonding Company or to plaintiff herein, and deny that payment was ever demanded for said alleged premiums. The answer further states defendants did carry out the terms of the contract with the drainage district in all respects; that they furnished all labor and materials and paid all sums of money due therefor; that the said drainage district, nor any other person, partnership or corporation, entitled to rely upon any bond in connection with the work under said contract ever asserted, or now asserts, any claim against either the defendants or the drainage district; nor was the said Bonding Company ever in any manner exposed to loss or liability in any form whatever, because of said alleged bond. The answer further states that plaintiff herein "has no legal capacity to bring or maintain this action in this court or in this state."

These allegations are followed by a general denial of all the allegations of the petition except those therein specifically admitted. The reply was a general denial of all new matter contained in the answer.

Upon the pleadings thus made the cause was tried to a jury resulting in a verdict and judgment for defendants. A motion for a new trial was overruled, and plaintiff filed his motion for...