U.S. Fidelity & Guaranty Co. v. Fidelity Nat. Bank & Trust Co.

• Decision Date: 15 October 1937
• Citation: 109 S.W.2d 47,232 Mo.App. 412
• Parties: UNITED STATES FIDELITY AND GUARANTY COMPANY, APPELLANT, v. FIDELITY NATIONAL BANK AND TRUST COMPANY, RESPONDENT
• Court: Kansas Court of Appeals

109 S.W.2d 47

232 Mo.App. 412

UNITED STATES FIDELITY AND GUARANTY COMPANY, APPELLANT, v. FIDELITY NATIONAL BANK AND TRUST COMPANY, RESPONDENT

Court of Appeals of Missouri, Kansas City

October 15, 1937

Appeal from Circuit Court of Jackson County.--Hon. A. A. Ridge Judge.

Judgment affirmed.

Hanna & Hurwitz for appellant.

McCune Caldwell & Downing, Lynn Webb and R. S. Eastin for respondent.

SPERRY C. Campbell, C., concurs.

OPINION

SPERRY, C.

Appellant, a surety company, will be called plaintiff herein and respondent, a bank, will be called defendant. Plaintiff had executed a surety bond in favor of the Continental Construction Company, herein called Continental, promising, for a consideration, to indemnify it against loss by reason of the dishonesty of its employees. The amount of the surety coverage was $ 100,000, and among the employees whose dishonesty was insured against was one Chaney, a pay-roll clerk. It was the custom and duty of the field foreman on the job to compile, semimonthly, a list of the names of field employees, rate of pay, and time worked, and forward same to the pay-roll department in Kansas City, where Chaney compiled summaries of same, prepared checks in accordance with said summaries, and took the whole to the proper company officials for verification and signature of pay checks. Beginng August 30, 1930, Chaney began adding the names of former employees, who were no longer working, to the time sheets sent in by the foreman, carrying such names over to the summary, and preparing checks payable to them. The proper officers would innocently sign said checks, together with those of regular employees. Chaney would then forward checks of regular employees to the proper destination and would abstract the checks of former employees so prepared, forge the indorsement of the named payees, and present them to defendant, the depository of Continental, where they were paid to Chaney by defendant, and charged to Continental's account. The checks sued on total the sum of $ 1,516.75, and all were cashed at window # 4 of defendant. The first such check cashed, together with seven others, bore Chaney's own indorsement in addition to the forged indorsement of the payee named therein. Defendant knew Chaney, but innocently cashed said checks in regular course of business, believing them to be genuine in every respect. Continental discovered its loss, notified plaintiff, and, upon forms supplied by plaintiff, submitted detailed proof thereof, accompanied by signed confessions of Chaney. On or about January 15, 1931, plaintiff indemnified Continental in full for the Chaney loss, first having demanded of defendant in the name of Continental, that it restore to Continental's account the amount of Chaney's peculations. Upon payment of the loss, Continental signed a release of plaintiff on form submitted by it. Immediately thereafter Continental paid plaintiff the required premium therefor and plaintiff increased its coverage back to $ 100,000, as it had been before paying the Chaney loss. About a year thereafter plaintiff sought, and received from Continental's successor, an assignment of its claim against all other parties, including defendant, by reason of its losses due to Chaney's forgeries and embezzlement.

On a trial to the court without jury, judgment was for defendant and plaintiff appeals. Several assignments of error are urged but they boil down to whether or not plaintiff was entitled to judgment on the above facts, practically all of which were agreed upon or were supported by documentary evidence. The appellate court should affirm a judgment, if possible, on any theory. [Ralston Purina Co. v. King et al., 101 S.W.2d 734.] In a case such as this, if the judgment was for the right party, it will not be disturbed on appeal, even though the trial court arrived at the judgment entered on a wrong theory. [Aloe v. Fidelity Mut. Life Ins. Assn., 164 Mo. 675, l. c. 700; Wilhelm v. The Security Benefit Assn. K. C. Court of Appeals, 104 S.W.2d 1042.]

Defendant seeks to sustain the judgment on the theory that the best position plaintiff can take is that it stands in the shoes of Continental, either by assignment or subrogation, (although it claims that the assignment, having been executed a year after a simple release was executed, conveys no more rights than the original release conveyed; and asserts that plaintiff could not, because of lack of equity, become subrogated to any rights Continental may have had as against defendant), and that Continental itself, at the outset, had a choice of two remedies, the one by pursuing the embezzler and his surety, and the other by pursuing the bank; and that the two remedies are opposed to each other in theory and the election to pursue one remedy prohibited it, or any successor to its rights, from pursuing the other.

There is no doubt but if there are two or more inconsistent remedies available, the election to pursue the one is a bar to any suit based upon the other. That is well settled law in this State. [Tower et al. v. Compton Hill Improvement Co., 191 Mo. 379, 393, 394; The Johnson-Brinkman Commission Co. v. The Mo. P. Railway Co., 126 Mo. 344, 28 S.W. 870.] In the latter case which had gone from this Court to the Supreme Court on Certiorari, the court said, on page 349: "It is well settled law that where a party has the right to pursue one of two inconsistent remedies, and he makes his election, and institutes his suit, in case the action thus begun is prosecuted to final judgment, or the plaintiff has received anything...