United States Fidelity & Guaranty Co. v. Iowa Telephone Co.
Decision Date | 07 March 1916 |
Docket Number | 30608 |
Citation | 156 N.W. 727,174 Iowa 476 |
Parties | UNITED STATES FIDELITY & GUARANTY CO., Appellee, v. IOWA TELEPHONE CO., Appellant, and |
Court | Iowa Supreme Court |
Appeal from Wapello District Court.--D. M. ANDERSON, Judge.
ACTION at law to recover premiums alleged to be due the plaintiff as surety upon a certain bond given by the telephone company to the city of Ottumwa. There was a judgment for plaintiff, and the telephone company appeals. The material facts are stated in the opinion.--Reversed and Remanded.
Reversed and Remanded.
Parker Parrish & Miller, and McNett & McNett, for appellants.
Tisdale & Heindel and M. C. Gilmore, for appellees.
The facts in this case are not in dispute. In the year 1903, the city of Ottumwa, by its mayor and council, adopted an ordinance designated in the record as Ordinance No. 633, regulating the use of its streets by telephone companies and requiring telephone wires to be laid underground. Among other things, it was therein provided that, before the laying of such wires should be begun, the company should make application to the council so to do, accompanied by plans and specifications of the proposed improvement, and that, upon approval of the application by the council, the city engineer should issue the necessary permit. It also provided as follows:
In May, 1904, the Iowa Telephone Company, owning a telephone system in the city, made written application for a permit under the terms of Ordinance No. 633, accompanied by the required plans and specifications. The application was approved in a resolution reading as follows:
Thereupon, the telephone company, for the purpose of complying with the requirements of the city and to perfect its right to enter upon the work of laying the telephone wires as provided in the ordinance, made application to the United States Fidelity & Guaranty Company, plaintiff herein, to become surety upon its bond to the city, stating that the bond was to be given as indemnity against damage that the telephone company "may cause through the placing of an underground conduit system for their telephones". Attached to the application was a copy of the proposed bond, identical in its language with the bond thereafter executed, upon which this action is based. The application also contained the following clause:
"And in consideration of The United States Fidelity and Guaranty Company consenting or agreeing to execute or guarantee the bond herein applied for, we do hereby covenant, promise and agree to pay the following premium or fees agreed upon, to wit, Fifty & No/100 Dollars per annum, and at the termination of the case to furnish said company with satisfactory and conclusive evidence that there is no further liability on said bond, and to indemnify, and keep indemnified, the said company from and against any loss, cost, charges, suits, damages, counsel fees and expenses of whatever kind or nature which said company shall or may for any cause at any time, sustain, or incur, or be put to, for, or by reason or in consequence of said company having entered into or executed said bond."
This application having been accepted by the plaintiff, the bond was executed and, upon presentation thereof to the city council, was duly approved. The bond is entitled, "Bond to comply with Ordinance No. 633," and is in the following words:
The bond having been accepted, the telephone company entered upon the work of laying its wires under the streets, and completed the same on or about November 15, 1905, since which time it has continued to use and maintain said underground system of conduits and wires substantially as originally constructed. About the time the work was begun, the company paid to the plaintiff the agreed premium of $ 50 on the bond for the period of one year, ending August 15, 1905, but has paid no further premium thereon since that date. No claim has ever been made or is now made by the city that the work was not properly done or that the city has sustained any injury or damage by reason of any default on the part of the company in the performance of its duty in that respect or in the maintenance or repair of its said system in and under the city streets.
This action was begun by the surety company in 1907 to recover from the telephone company the unpaid premiums alleged to have accrued upon the bond, and from time to time since that date it has filed supplemental petitions, increasing its demand to cover other yearly premiums alleged to have become due pending the very leisurely progress of this litigation. The petition, as amended, states an ordinary cause of...
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