{ "id": 1538833, "name": "Southwestern Surety Insurance Company v. Clay & Nowlin", "name_abbreviation": "Southwestern Surety Insurance v. Clay", "decision_date": "1914-03-30", "docket_number": "", "first_page": "220", "last_page": "223", "citations": [ { "type": "official", "cite": "112 Ark. 220" } ], "court": { "name_abbreviation": "Ark.", "id": 8808, "name": "Arkansas Supreme Court" }, "jurisdiction": { "id": 34, "name_long": "Arkansas", "name": "Ark." }, "cites_to": [ { "cite": "104 Ark. 129", "category": "reporters:state", "reporter": "Ark.", "opinion_index": -1 }, { "cite": "103 Ark. 3", "category": "reporters:state", "reporter": "Ark.", "opinion_index": -1 }, { "cite": "92 Ark. 387", "category": "reporters:state", "reporter": "Ark.", "opinion_index": -1 }, { "cite": "102 Ark. 676", "category": "reporters:state", "reporter": "Ark.", "opinion_index": -1 }, { "cite": "100 Ark. 9", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1312259 ], "opinion_index": -1, "case_paths": [ "/ark/100/0009-01" ] }, { "cite": "97 Ark. 384", "category": "reporters:state", "reporter": "Ark.", "opinion_index": -1 }, { "cite": "93 Ark. 62", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1546835 ], "weight": 3, "opinion_index": -1, "case_paths": [ "/ark/93/0062-01" ] }, { "cite": "88 Ark. 473", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1517099 ], "opinion_index": -1, "case_paths": [ "/ark/88/0473-01" ] }, { "cite": "93 Ark. 62", "category": "reporters:state", "reporter": "Ark.", "case_ids": [ 1546835 ], "opinion_index": 0, "case_paths": [ "/ark/93/0062-01" ] } ], "analysis": { "cardinality": 381, "char_count": 7075, "ocr_confidence": 0.476, "pagerank": { "raw": 4.03580807328026e-08, "percentile": 0.057570151773327326 }, "sha256": "719c6f579caf1f37756708132e307efcdac422cb3f74bc48d27a54429e67a651", "simhash": "1:73fbe081cafc7ce9", "word_count": 1231 }, "last_updated": "2023-07-14T18:49:03.002736+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "Southwestern Surety Insurance Company v. Clay & Nowlin." ], "opinions": [ { "text": "McCulloch, C. J.\nAppellees held a policy of fire insurance issued to them by the American Union Fire Insurance Company, and appellant was surety on the bond of said company given pursuant to statute requiring insurance companies doing business in this State to give bond \u201cconditioned for the prompt payment of all claims arising and accruing to any person or persons during the term of said bond, by virtue of any policy issued by any such company or association upon any property in Arkansas. \u2019 \u2019\nThe property described in the policy was destroyed by fire, and on February 19, 1913, the loss was adjusted by the company\u2019s agent and a draft on the company\u2019s home office at Philadelphia was given to appellees by the adjuster for the sum of $999.19, the amount agreed upon according to the terms of the adjustment. The draft was not paid upon presentation, but went to protest. The company became insolvent'and went into the hands of a receiver, and this action was instituted by appellees against the surety alone to recover the amount claimed to be due, $999.19, together with statutory penalty of 12 per cent and attorney\u2019s fee. The company was not sued.\nAfter the commencement of the action appellant paid to appellees the amount claimed, that is to say, the amount of the draft, with interest at 6 per cent per annum from the date of the adjustment, and $2.08 protest fees; but refused to pay damages and attorney\u2019s fee demanded.\nThe court rendered judgment, notwithstanding for the damages and attorney\u2019s fee, and an appeal has been prosecuted to this court.\nAppellees in their complaint set out the policy and bond, together with a statement as to the destruction of the property by fire and the adjustment of the loss, and also set out and exhibited with the complaint a copy of the draft which it is alleged was protested. These allegations were sustained by the agreed statement concerning the facts of the case. It does not appear when the insurance company became insolvent and went into the hands of a receiver, whether before the draft was presented or afterward. The complaint concludes with a prayer for \u201cjudgment against the Southwestern Surety Insurance Company of Oklahoma for the sum of $999.19, with interest at the rate of 6 per cent per annum from February 19, 1913, until paid, and for $2.08 protest fees, and for 12 per cent penalty arising under the insurance laws of the State of Arkansas and a reasonable attorney\u2019s fee to be fixed by the court.\u201d\nThe case is, we think, ruled by the decision of this court in American Insurance Co. v. McGehee Liquor Co., 93 Ark. 62. There the court said:\n\u201cThey (the plaintiffs) could, not, however, sue upon and recover upon the policy, the original cause of action, unless in the trial of such action they produced and surrendered, or offered to surrender, the two drafts for cancellation, the drafts being negotiable instruments.\u201d\nThe court decided that -the action being to recover the amount of the draft, there could be no recovery of penalty and attorney\u2019s fee.\nNow, in the present action the appellees have not declared specially either upon the policy or upon the draft, but have set both out in the complaint and asked for judgment for the amount of the draft, with interest thereon, and protest fees. They were not entitled to recover protest fees in a suit on the policy, and the fact that the complaint contains an allegation concerning the same and a prayer for judgment shows that the suit is based upon the draft.\nIn addition to that, the case comes within the rule that the suit can not be maintained on the policy without surrendering the draft, which was not done in this case. On the contrary, the draft was set forth in the complaint and a copy exhibited therewith. The agreed statement of facts recites that it is \u201ccontended by plaintiffs that the defendant herein is liable for the amount of said draft,\u201d etc. Neither in the pleadings nor in the agreed statement of facts is there any offer to surrender the draft, but judgment is prayed for the amount thereof and protest fees.\nThe court erred, therefore, in rendering judgment for damages and attorney\u2019s fee, and as appellant has paid the amount claimed and the costs of the action the judgment is reversed and the action dismissed.", "type": "majority", "author": "McCulloch, C. J." } ], "attorneys": [ "J. W. & J. W. House, Jr., for appellant.", "J. W. Blackwood, for appellee." ], "corrections": "", "head_matter": "Southwestern Surety Insurance Company v. Clay & Nowlin.\nOpinion delivered March 30, 1914.\nInsurance \u2014 failure of insurer to pay draft.! \u2014 -Where the insurer failed, to pay a draft drawn on it in settlement of insured\u2019s claim, in a suit by the insured against the surety on the insurer\u2019s bond, the plaintiff can not recover penalty and attorney\u2019s fees, under the statute, where he does not surrender the draft; but sets out both the policy and the draft in his complaint.\nAppeal from Pulaski Circuit Court, Second Division ; Guy Fulk, Judge;\nreversed.\nJ. W. & J. W. House, Jr., for appellant.\n1. The purpose of the act of 1905 was not to tax attorneys\u2019 fees and penalties in all cases where suit is brought on insurance policies, but only in cases where no legal excuse exists, for the nonpayment by the company within the time provided by the policy.\nThe good faith of the company in this case was shown by its giving a draft in settlement of the policy, but before it was presented for payment the company became insolvent and could not pay and was put in the hands of a receiver. This was a sufficient legal excuse for nonpayment, and neither the insurance company, its receiver, nor the surety company could be held liable for attorney\u2019s fee -and penalty. 88 Ark. 473-477.\n2. Suit whs instituted against appellant alone. Until a suit was instituted against the insurance company, there could be no liability against it for attorney\u2019s fee \u25a0and penalty. Certainly there could be none taxed against the surety company. Statutes of this character are penal, and must be strictly construed. Endlich, Statutory Construction, 455, \u00b6 329; Id., \u00b6 331; Sutherland, Statutory Construction, \u00a7 \u00a7 208, 359, 360.\n3. This is not a suit upon the policy but upon the draft given in settlement thereof. There is nothing to which a penalty could attach. The statute applies only in case suit is brought upon a policy. 93 Ark. 62-66.\nJ. W. Blackwood, for appellee.\nThe suit is based upon the undertaking in appellant\u2019s bond, executed pursuant to the act of May 31,1909, whereby it became \u201cjointly and severally\u201d bound with the insurance company. The testimony does not show that the draft was given dr received as payment. See 93 Ark. 62-65. It was appellant\u2019s duty to have paid the amount of the loss \u201cwhen the same shall become due,\u201d and when it did not pay on demand it became liable to a suit upon the bond, and incurred the penalty and attorney\u2019s fee. Kirby\u2019s Dig., \u00a7 6010; Id., \u00a7 4420; 97 Ark. 384.\nIt is conceded that neither the insurance company nor the surety company paid or offered to pay the amount due until after suit was brought. Had suit been brought against the insurance company, it would have been bound for the penalty and attorney\u2019s fee. 100 Ark. 9; 102 Ark. 676; 92 Ark. 387; 103 Ark. 3; 104 Ark. 129." }, "file_name": "0220-01", "first_page_order": 236, "last_page_order": 239 }