Peters v. Equitable Surety Co.

202 S.W. 530, 273 Mo. 318, 1918 Mo. LEXIS 156
CourtSupreme Court of Missouri
DecidedFebruary 16, 1918
StatusPublished
Cited by3 cases

This text of 202 S.W. 530 (Peters v. Equitable Surety Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Missouri primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Peters v. Equitable Surety Co., 202 S.W. 530, 273 Mo. 318, 1918 Mo. LEXIS 156 (Mo. 1918).

Opinion

WHITE, C.

The plaintiff recovered against the defendant as surety on an appeal bond, the judgment from which the defendant appeals.

On March 12, 3912, the plaintiff obtained judgment against the St. Louis & San Francisco Railroad Company for five thousand dollars. From this judgment the [322]*322Railroad Company appealed to the St. Louis Court of Appeals, and gave bond in the usual form in the sum of $10,200, with this defendant, Equitable Surety Company, as surety.

On November 4, 1913, during the next term of said Court of Appeals, the Railroad Company dismissed its appeal. The Railroad Company in the meantime, had been ordered into the hands of receivers. After the appeal was dismissed the plaintiff brought suit against the Surety Company, defendant here, upon the appeal bond. While that suit was pending, the respondent ran across a recent decision of the Springfield Court of Appeals holding that the dismissal of an appeal was not a breach of the bond in such case and would not make the surety liable. The plaintiff then filed a motion in the St. Louis Court of Appeals asking that court to set aside the dismissal of the appeal and reinstate the case. This was done at the same term of the court, on January 20, 1914, and on February 17, 1914, at the same term, that court affirmed the judgment of the circuit court for failure to prosecute the appeal. The plaintiff then dismissed the pending suit on the appeal bond, and filed the present suit, alleging as a breach of the bond the affirmance of the judgment and the failure of the appellant Railroad Company to comply with and perform same.

The answer of the defendant in this case, in addition to a general denial, alleged that the defendant Railroad Company and the plaintiff, without the knowledge or consent of the surety, entered into a collusive agreement for a compromise judgment in the Court of Appeals, and that the appeal was dismissed by the plaintiff in pursuance of that agreement, whereby the surety was released from obligation on the bond.

The answer further alleged that after the appeal was dismissed in the Court of Appeals, as mentioned, the plaintiff caused the same to be reinstated and the judgment of the circuit court to be affirmed, without notice of any kind to defendant herein, and if the judgment were enforced defendant would be deprived of its prop[323]*323erty without due process of law, and was in violation of Article 2, Section 30, of the Constitution of Missouri.

The judgment of the circuit court was for $10,200, the penalty of the bond, with an assessment of the plaintiff’s damages at $5,000 and interest from the date of the judgment.

On the trial of the case records were introduced to show the proceedings as above stated, and that execution had been issued and no part of the judgment had been paid.

The defendant then .attempted to show the agreement set up in the answer.

While the appeal was pending R. M. Nichols, attorney for plaintiff, and Mr. Lon Hocker, who represented the Railroad Company, had one or more conversations looking to a compromise of the case. Finally they agreed to settle the case for the face of the judgment and one-half the accrued interest and costs — the interest at that time amounting to $500 — the amount to be paid to plaintiff in the settlement being $5,250. It appears from the testimony of both Mr. Nichols and Mr. Hocker that in pursuance of the arrangement the Surety Company was to be consulted and requested to pay the amount agreed upon. The conversation in which this agreement was reached, according to the testimony of Mr. Nichols, took place on the 4th of November, 1913, and immediately, on the same day, Mr. Hocker dismissed the appeal in the Court of Appeals.

The next day Mr. Nichols addressed a letter to the Surety Company relating the agreement and stating that Mr. Hocker had told him to write to the company and it would send him a check for the amount. After this letter was written Mr. Nichols had several telephone conversations with Mr. Geisinger, a clerk or bookkeeper in the office of the Surety Company, and with Mr. Maloney who, it appears, was the person in authority. Nothing came of the negotiations. Mr. Nichols for several days attempted to obtain an adjustment from the Surety Company, but without result, and then, on November 14th, ten days after the appeal was dismissed, [324]*324filed the first suit mentioned. After that he was informed by Mr. Maloney that inasmuch as suit had been brought he would let the law take its course. The appellant, to prove an agreement in this connection, had Mrs. Peters swear on cross-examination that she “agreed” to accept $5,250 in settlement. But the only agreement between the plaintiff'and the defendant Railroad Company was as to the amount the plaintiff was willing to take and the Railroad Company willing to request its surety to pay. It was understood that the Surety Company would have to be a party to the arrangement before it was complete. Defendant introduced as a witness Mr. Pierce, attorney for the Surety Company, who testified that when the matter was suggested to him by Mr. Hocker he objected and demanded that the case be briefed and argued in the Court of Appeals. In this statement he was corroborated by Mr. Hocker who, nevertheless, had proceeded to make the arrangement as mentioned. The motion which the plaintiff filed in the Court of Appeals, asking to have the order of dismissal set aside, set forth the arrangement between Mr. Nichols and Mr. Hocker as to the settlement of the case, stating in detail the negotiations between them, with a copy of the letter mentioned to the Surety Company; the failure of the surety to pay in accordance with the arrangement; and that the dismissal of the appeal, if allowed to stand, would endanger the plaintiff’s security on the appeal bond; that the plaintiff had relied upon the assurance of Mr. Hocker that the Surety Company would pay immediately the amount agreed upon. Appended to this motion was an affidavit showing that it had been served on someone in the office of Mr. Hocker. Mr. Hocker admitted the service of this motion.

Affirmance! f°r I. The first error assigned by the appellant is to the refusal of the circuit court to give defendant’s declaration of law in the nature of a demurrer ^ie evidence, because, it is claimed, all the evidence showed that the Railroad Company failed to prosecute its appeal with' diligence by [325]*325reason of tlie compromise agreement between the jplaintiff and the Railroad Company, which agreement resulted in a material variance from the original undertaking of the defendant as surety.

The authorities are conflicting as to whether a compromise agreement between the appellant and respondent for an affirmance of the judgment appealed from will release the sureties on an appeal bond. Many jurisdictions hold that such an agreement does not release the surety. [First State Bank v. Stevens Land Co., 119 Minn. 209; Howell v. Alma Milling Co., 36 Neb. 80; Ammons v. Whitehead, 31 Miss. 99; Drake v. Smythe, 44 Iowa, 410.] These cases hold that a surety on an appeal bond is not released by an agreement between the appellant and respondent for an affirmance of a judgment, although the agreement involves a variation from the original undertaking, such as an agreement to stay execution for a limited time.

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Bluebook (online)
202 S.W. 530, 273 Mo. 318, 1918 Mo. LEXIS 156, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peters-v-equitable-surety-co-mo-1918.