67 Neb. 282 | Neb. | 1903
A firm of insurance agents furnished a bond to one of the companies which they represented, conditioned, among other things, that the agents should “in all respects observe and fulfill the instructions of the said company” and that they should “in all other respects well and faithfully perform their duties as such agents.” The agents, it is alleged, neglected to cancel a policy when directed so to do; and the company was afterwards compelled to pay a loss upon the policy. Thereupon the company brought an action upon the bond, alleging these facts. It appeared from the petition that the neglect to comply with the order to cancel the policy took place more than five years prior to the time when the cause was begun, but the action was brought within five years from the time when it was ascertained that the company was liable for a loss under the policy and was compelled to pay such loss. Demurrers were sustained in the district court, and the company brings the case here on erron.
Two points are made in support of the demurrer,— that the plaintiff, as appears on the face of the petition, is a foreign insurance company, and does not allege that it has complied with the statutory prerequisites to transaction of business in this state, and that the cause of action is barred by the statute of limitations. In support of the first point, we are cited to Commonwealth Mutual Fire Ins. Co. v. Hayden, 60 Nebr., 636, 83 Am. St. Rep., 545. But we think a manifest distinction is to be made between the two cases. Where the record discloses
In order to determine whether tbe action is barred by the statute of limitations, it becomes necessary to ascertain when plaintiff’s cause of action accrued, — Avhether at'the time tbe agents failed to cancel tbe policy, as directed, or at the time when loss to tbe company ensued as a result of their neglect or violation of instructions. A clear distinction is made between bonds conditioned to pay a certain sum of money or to do a certain act, and bonds conditioned to indemnify. i,A cause of action accrues upon a bond conditioned to do a certain act as soon as there is a default in performance, whether tbe obligee has suffered damage or not. If, hoAvever, tbe bond is conditioned to indemnify, damage must be shoAvn before tbe party^ indemnified is entitled to recover, so that a cause of action accrues, not from the date of the act wliici, causes damage, but from the time when pecuniary los?, ensues therefrom. Wilson v. Stilwell, 9 Ohio St., 468; 75 Am. Dec., 477; American Building & Loan Ass’n v. Waleen, 52 Minn., 23, 53 N. W. Rep., 867; Gilbert v. Wiman, 1 N. Y., 550, 49 Am. Dec., 359; Wicker v. Hoppock, 6 Wall. [U. S.], 94, 18 L. Ed., 752; Hicks v. Hoos, 44 Mo. App., 571, 579; Terre Haute & I. R. Co. v. Peoria & P. U. R. Co., 81 Ill. App., 455. It follows that in tbe one class of cases tbe statute begins to run from tbe date of default, in tbe other it runs from tbe time when loss or damage is
The rule that where the bond is conditioned to do a certain act a cause of action accrues and damages are recoverable upon default in performance, although no actual loss has yet resulted, has been criticised justly as an effort to engraft on the courts of common law a species of specific performance, irregular and illegitimate, and Avhich neither their forms of procedure nor the general arrangement of their system enable them to exercise without great danger of injustice and abuse. 2 Sedgwick, Damages [7th ed.], 307-311, Under the code sytsem,
We recommend that the judgment be reversed and the cause remanded with directions to overrule the demurrers.
For the reasons stated in the foregoing opinion, the judgment of the district court is reversed and the cause remanded with directions to overrule the de-muri'ers.
Reversed and remanded.