Porterfield v. Am. Surety Co. EDWARD E. PORTERFIELD, Respondent, v. AMERICAN SURETY COMPANY OF NEW YORK, a Corporation, Appellant. Kansas City Court of Appeals, January 6, 1919. 1. BONDS: Premium: Agent's Commission. Plaintiff was employed to procure the bond, or a part thereof, for defendant on the contract to build the Missouri State Capitol and was to receive thirtyfive per cent of the original and all renewed premiums received by defendant as long as the bond was in force. He succeeded in getting one-third of said bond which was executed by the defendant. The contractor agreed to pay the original premium for one year and a like sum annually, in advance, until the surety was released. The completion of the building was delayed for various reasons and extensions were lawfully granted. The defendant voluntarily agreed to waive the payment of premium for the last year the bond was in force. This action was brought for the broker's proportion of the commission for said year. It is held that under the facts as disclosed by the evidence the defendant is liable to plaintiff for his proportion of said premium, notwithstanding it was not received by defendant. Appeal from Jackson Circuit Court.-Hon. O. A. Lucas, Judge. AFFIRMED. Warner, Dean, McLeod & Langworthy for appellant. Henry L. Jost and Mord M. Bogie for respondent. TRIMBLE, J.-This is an action to recover unpaid broker's commissions claimed to be due under a contract made by the American Surety Company with an insurance broker, Edward E. Porterfield, Jr., relative to the latter's procuring, and placing with defendant, the contract or right to furnish any part of the Bond required of the contractor selected to erect the new Missouri State Capitol. After the broker had performed his part of the contract and has received from defendant a part of Porterfield v. Am. Surety Co. his commissions, he, for a valuable consideration, assigned all commissions due and to become due under said broker's contract to his father, Edward E. Porterfield, the plaintiff herein. After this assignment, which was on July 28, 1916, the defendant paid to the plaintiff, as assignee of his son, the commissions due and accrued up to November 28, 1916, but refused to pay any commissions claimed as due and accruing for the year following said last named date. This suit was brought to enforce payment thereof, the petition being filed after the expiration of said year. Plaintiff obtained a verdict and judgment for the full amount demanded with interest from November 28, 1916. Defendant appealed. The Forty-sixth General Assembly of Missouri by an Act approved March 24, 1911 (Laws 1911, p. 108), authorized the erection of a State Capitol and created a "State Capitol Commission Board" with power to prepare plans, submit bids and award a contract for the erection of said building; all of which things were duly and regularly done, and the "John Gill and Sons Company,' a corporation, was awarded the contract. The law provided, and the contract required, that the contractor give a bond for the faithful performance of its contract, the latter fixing the penal sum of the bond to be given at one million, three hundred and fifty thousand dollars. The contract was formally awarded to said John Gill & Sons Company November 21, 1913. Prior to and at this time young Porterfield was busy on his own account as an insurance broker, endeavoring to secure the right to furnish said bond. With matters in this shape, Valentine, the resident Vice President of the defendant at Kansas City, communicated with young Porterfield over the telephone and the latter was employed to get the bond or any part thereof for the defendant Surety Company. This telephone contract was on the 25th of November, 1913, confirmed by a letter from said Valentine which, among other things, stated that "if this Company acts as Porterfield v. Am. Surety Co. surety or co-surety on such bond procured by you, you will be paid a commission of thirty-five per cent (35%) on the original premium and all renewal premiums received by this Company as long as the bond remains in force. You to receive commissions as above whether your connection with this Company continues throughout the life of the said bond or not." (It may be well to here state that in the telephone conversation Valentine had tried to also engage young Porterfield as the Company's regular agent but the latter would not close a contract on that matter until he had first closed a separate and distinct broker's contract relative to the procuring of the aforesaid State Capitol Bond. Afterwards and on December 4, 1913, young Porterfield entered into a contract whereby he became the defendant's regular agent, but it is manifest that the two contracts are wholly separate and distinct and have nothing whatever to do with each other. And the services under the broker's contract were rendered before the agency contract was entered into.) There is no question but that young Porterfield performed his part of the broker's contract and succeeded in obtaining one-third of said bond to be placed with the defendant Surety Company.. Neither is there any controversy over the fact that the annual premiums charged by and paid to said defendant was $4517 and thirty-five per cent. of this sum or $1581 was paid by defendant each year to young Porterfield and his assignee up to November 28, 1916, as hereinabove stated. The application to the defendant Surety Company for the bond in question, which was the contract the broker was to obtain for defendant, was signed by the Contractor on November 26, 1913. In it the Contractor agreed and bound itself to pay in advance to defendant the original premium or charge for executing such obligation and continuing the same in force for one year, and that it would "thereafter pay a like sum, annually, in advance, until the Surety shall be discharged and released from any and all responsibility upon each Porterfield v. Am. Surety Co. such obligation and until the indemnitor shall serve upon the Surety competent, written, legal evidence of its final discharge from each such obligation and all liability by reason thereof." The contract for the erection of the Capitol building was, concurrently with the Contractor's bond, executed November 28, 1913. The former was very long containing, many things the Contractor was to do, not only with reference to the erection of the building complete in every respect and of its necessary equipment and accessories with materials of the very best quality in strict accord with the plans and specifications, but also with reference to the payment for all materials and of all subcontractors, laborers and other employees, the obtaining of releases therefrom, the correction of imperfections, etc., all of which were declared to be essential parts of the contract. The contract further provided that time was of the essence thereof and that the building should be completed by July 1, 1916, and if if not completed by that date the Contractor should pay the State $250 per day liquidated damages for the failure to complete the same within that time, but provision was made whereby in case of failure to complete, from any cause entirely beyond the control of the Contractor, the State Capitol Commission Board would grant an extension of time. The contract required that the Bond given by the Contractor should "guarantee the faithful, prompt and efficient performance by the Contractor herein of all of the covenants, the agreements, undertakings, conditions and requirements of this contract on the part of the Contractor or of any sub-contractor's assignee of the contract, according to the strict terms of this contract, or according to any change or modification thereof or addition thereto, that may be made, as herein provided." The building was not completed by July 1, 1916. However, it seems that extensions were asked and granted, and the record shows that finally an extension was granted by the Board from May 15 to August 22, 1917. Porterfield v. Am. Surety Co. On this last-named date, the Contractor asked the Board for a conditional acceptance of the building, such acceptance not to apply, however, to the completion of the main entrance, the elimination of certain stains on the walls, the restoration of their surface to a proper finish, the finishing and erection of seventeen self winding electric clocks and various other items of adjustment and repairs necessary to complete the work in accordance with the contract; and the conditional acceptance was also to be "without affecting in any manner the bond" given. The request for such conditional acceptance also stated that if it were given, the Contractor would then be in a position to obtain the certified releases required by the contract to be obtained from material men, subcontractors and laborers. On September 8, 1917, the State Capitol Board, conditionally accepted said building with the exception of the things above specified and the replacing of certain cracked stones in the building with proper stones. The order of conditional acceptance recited that none of the provisions or requirements of the original contract, plans, specifications or bond, with reference to the exterior walls or any other part of said building, were waived, and that the conditional acceptance should not become effective until the consent in writing of the Contractor's Sureties had been obtained, nor until the Contractor should obtain and deliver the releases hereinabove mentioned. Both the Contractor and the Board expressly stipulated that the bond should remain and continue in force to guarantee the performance of those things which were required. to be performed within one year from the date of the acceptance, to-wit, September 8, 1917. This conditional acceptance was agreed to by the defendant Surety Company on September 12, 1917. The Board, on the 28th of September, 1917, waived all claim upon the Contractor for the $250 a day specified as liquidated damages for failure to complete the building in the time specified by the contract. (The court permitted the defendant to show that this $250 a day feature |