265 F. 116 | 8th Cir. | 1920
Two separate actions were brought by The Title Guaranty & Surety Company, one against John Hannon and W. E. Thomas, and the other against Thomas T. Kelly. They were consolidated for trial and we have one record. In both verdicts and judgments were in favor of defendants. Each, as pleaded, was for the recovery of damages for breach of an indemnity contract. The one on which Kelly was sued was contained in his written application to the Surety Company to become a surety on his official bond, as State Treasurer of Kansas, for one million dollars. In it he promised to indemnify the Surety Company against loss, _ damages, counsel fees and expenses which the Surety Company might be put to in consequence of its executing the bond. The application was a printed form containing many questions of a personal nature and of the duties and responsibilities of his office, and blank spaces for answers and his signature. After he inserted the answers and signed it, he delivered it to the plaintiff’s local agent, who sent it to the plaintiff at Scranton, Pa., its home office. In response it signed the bond as surety for Kelly for half a million dollars, and sent it to its local agent, who in turn delivered it to Kelly on January 6th or 7th. Kelly accepted it, induced local friends to become his sureties on another like bond for the same amount, and on January 10th delivered the two bonds to the proper State official, who approved them. The plaintiff retained Kelly’s application. Nothing was said between Kelly and the local agent, when the latter delivered the bond to Kelly, about the application and the indemnity contract in it. A bank m which Kelly afterward deposited State funds failed, and by reason thereof Kelly, and the plaintiff as his surety, were sued on his official bond. This
“The fact is undisputed tie (Kelly) made an application for a million dollar, bond, but they declined to accept that application, did not write a million dollar bond. So that ended it, that application, unless it .was subsequently tqken up between them and was agreed subsequently by both the plaintiff and defendant Kelly that he would accept a bond that the plaintiff did write for him under that application.”
And again:
“That written application was in evidence, and had the bond applied for,— or, put it in other words — had the proposition the defendant Kelly made to the plaintiff been accepted as made, and the bond applied for had been written, there would be no question. But, under the facts in this case, that proposition was not accepted, and it fell of its own weight. Had no moré life until renewed by a subsequent agreement. There was a bond furnished by the plaintiff in the case in one half the amount applied for. How was that bond furnished. Did the plaintiff and the ^defendant agree when the bond in this case was furnished that it should be furnished by the plaintiff and accepted by the defendant in satisfaction of that proposition made, because if .they, did not make a second agreement in regard to that you have no evidence in this case at all that it was furnished under the application, and the burden is upon the plaintiff to establish that fact.”
“If the evidence in this case shows that the defendant Kelly originally requested the plaintiff to become surety upon his bond as State Treasurer, in the sum of $1,000,000, making said request in writing upon the printed form of application used by the plaintiff, and that the plaintiff refused to go upon ins bond in said amount, and it further appears that the plaintiff did subsequently go upon bis said bond as State Treasurer in the sum of $500,000, without the said Kelly signing a new application therefor, and that the original application for a million dollar bond was treated by the parties as if it had been modified so as to read for a half million dollar bond, nQ new application being asked of and no other application being signed by the defendant Kelly, then and in that event the said Kelly would be bound in this action by the provisions of the original application signed by him.”
The other action was against William E. Thomas and John HannonThey, with Chas. J. Devlin and Chas. J. Lantry, signed, sealed and delivered a bond to plaintiff in which they agreed to indemnify plaintiff against the same expenditures noted in the Kelly Case, and to assure the payment by Kelly to plaintiff of the money premium on his official bond. It recited that it was.given on request of the makers to the Surety Company that it execute Kelly’s bond as State Treasurer of Kansas. However, it bears date January 23rd, some sixteen or seventeen days after Kelly’s bond had been signed and delivered by plaintiff. The recovery asked in this case was the same as in the other. These facts cannot be controverted: Prior to and
at the time plaintiff’s local agent delivered the bond to Kelly, on January 6th or 7th, he had in his possession, as agent, an indemnity bond drawn in the same terms as the one in suit, which had theretofore been signed by Lantry, Devlin and Hannon. On January 9th he sent that bond by mail to the plaintiff at Scranton. The word “December,” as originally written in the bond, had been erased, and “January” substituted. On that account, and for the reason that there was no endorsement on the bond covering the correction, the plaintiff was not satisfied with it, and on January 12th returned it to tiie local agent with the request that he have a new bond signed to take its place. That bond, written in the terms of. the one sued on, was a valid and binding obligation on the makers. U. S. Fidelity & Guaranty Co. v. Riefler, 239 U. S. 17, 36 Sup. Ct. 12, 60 L. Ed. 121; 1 Chitty on Contracts (11th Am. Ed.) p. 28. The agent thereupon procured the execution of the bond sued on and delivered the one that had been returned to him to Chas. J. 'Devlin. Hannon was physically unable to attend the trial. Thomas testified that he did not sign the first bond, though his cross-examination left that fact in some doubt. He also testified that he received nothing for signing the bond sued on.
The record establishes that as between Kelly and the obligors on the bond, the latter were his sureties, and any judgment entered against the sureties-should recite that Kelly is the principal debtor as between him and them.
Reversed.