Summary
In Goldsmith, family members of a man believed to be dead issued a surety bond to the insurance company in order to collect on his life insurance.
Summary of this case from Midland Property Partners, LLC v. WatkinsOpinion
December 3, 1945.
1. — Principal and Surety. A gratuitous surety being a favorite of the law, his liability is strictissimi juris and cannot be extended by implication or construction, and not beyond the precise terms of his undertaking, which is to be strictly construed.
2. — Damages — Interest. The general rule is that in the absence of an agreement to pay interest, it is implied by law as damages for not discharging a debt when it ought to be paid.
3. — Interest. Where a contract provides for the payment of money upon the happening of an event, it is not due until the event transpires, and interest does not begin to run until that time.
4. — Damages — Interest. The general rule is that interest when allowed as damages runs from the date when the right to recover a sum certain is vested in the plaintiff.
5. — Damages — Breach of Contract. In actions for breach of contract, interest ordinarily runs from date of the breach or the time when payment was due under the contract.
6. — Indemnity. Where insurer, upon paying policies on presumption of death arising from insured's absence for seven years, insurer doubting that insured was dead, required beneficiaries as condition of payment, to execute bond to indemnify insurer against loss it might incur by reason thereof, the bond was breached upon proof that insured was alive and that demand was made under bond for repayment, and upon recovering from beneficiary, insurer was entitled to interest from time of demand and not from date of payment of policies.
7. — Costs — Attorneys Fees. Right to recovery of attorney's fees from adverse party as a party of costs of litigation did not exist at common law, and is not allowable in absence of a statute or of some agreement expressly authorizing taxing of such fees as costs.
8. — Contracts — Costs. Term "costs" or "expenses" as used in statute or in a contractual provision for payment of "expenses" does not generally include attorneys' fees.
9. — Indemnity. Indemnity bond under which surety agreed to save insurer harmless from all loss and "expense" incurred by reason of insurer's payment of policies on life of insured, based on presumption of death arising from insured's absence for seven years, upon proof that insured was alive, in recovering from surety, insurer was not entitled to attorneys fees as "expenses."
Appeal from Circuit Court of Jackson County. — Hon. Allen C. Southern, Judge.
REVERSED AND REMANDED ( with directions).
Clarence C. Chilcott for appellant.
(1) The plaintiff neither stated a cause of action in its petition nor proved a case on the trial and the court erred in not sustaining defendant's demurrer to the evidence and in not rendering judgment for the defendant. Sec. 926, R.S. Mo. 1939; Walker v. Roth, 230 Mo. App. 379, 71 S.W.2d 124; City v. Railway Co., 330 Mo. 499, 50 S.W.2d 637; Pickering v. Hartsock, 221 Mo. App. 868, 287 S.W. 819; Croghan v. Savings Trust Co., 85 S.W.2d 239, 231 Mo. App. 1161; State ex rel. Central State Life Ins. Co. v. McElhinney, 90 S.W.2d 124, 232 Mo. App. 107; John Deere Plow Co. v. Cooper, 91 S.W.2d 145, 230 Mo. App. 167; National Surety Co. v. Roth, 232 S.W. 736; Southern Real Estate, etc., v. Banker's Surety Co., 184 S.W. 1030; Citizen's Trust Co. v. Tindle, 199 S.W. 1025, 272 Mo. 681; Harris v. Taylor et al., 129 S.W. 995, 150 Mo. App. 291; Lange v. Freeman, 13 S.W.2d 1092; State ex rel. Zimmerman v. Schaper et al., 134 S.W. 671, 152 Mo. App. 538; Cochrane et al. v. Stewart et al., 63 Mo. 426; Steckdaub v. Wilhite, 211 S.W. 915; Hurst v. Randall et al., 68 Mo. App. 507; Smith v. Warren, 88 Mo. App. 285; Central States Grain Co-Operative, Inc., v. Nashville Warehouse Elevator Corporation et al., 48 F.2d 138; Howell v. Commissioner of Internal Revenue, 69 F.2d 447; Union Indemnity Co. v. Vetter, 40 F.2d 606; American Jurisprudence, Vol. 27, Sec. 21, p. 457; Maloney v. Nelson et al., 39 N.E. 82; Most v. Massachusetts Bonding Ins. Co. et al., 196 S.W. 1064; Conqueror Zinc Lead Co. v. Aetna Life Ins. Co., 133 S.W. 156; State ex rel. Western Automobile Ins. Co. v. Trimble et al., 249 S.W. 902; Staggs v. Gatham Min. Mill. Co., 235 S.W. 511; Moberly, Com'r of Finance, v. Leonard et al., 99 S.W.2d 58; Central Trust Co. v. Louisville Trust Co., 100 F. 545; Bray v. Culp et al., 219 S.W. 129, 204 Mo. App. 636; Lowenthal v. McElroy, 168 S.W. 813, 181 Mo. App. 399; Central States v. Nashville W. E. Corp., 42 F.2d 138; State v. Cordaro, 241 N.W. 448; Nee Insurance Co. v. Baldrich, 185 N.W. 468; Duke v. Taylor, 240 N.W. 319; 31 Corpus Juris 431; Title Guaranty, etc., Co. v. Turnes, 183 Ill. App. 23; 31 Corpus Juris 437; State ex rel. Phillips v. Green, 112 Mo. 108, 90 S.W. 403. (2) There was a total failure of consideration for the bond. Section 1875, Revised Statutes, 1939; Cobble v. Royal Neighbors, 236 S.W. 306; Mannion v. John Hancock Mutual Life Insurance Co., 273 S.W. 201; Bullock v. Aetna Life Insurance Co., 76 S.W.2d 278; Deskin v. United States Reserve Insurance Corporation, 296 S.W. 103; Wheeler v. Reynolds, 193 Mo. 279, 91 S.W. 1050; Pollock v. Insurance Co., 227 N.Y.S. 328; 48 Corpus Juris 740; Forsythe v. Rerzat, 27 S.W.2d 695; Holman v. Metropolitan, 231 Mo. App. 230, 98 S.W.2d 343; Berry v. Detroit Casualty Co., 300 S.W. 1026; Hammer v. Insurance Co., 172 Mo. App. 241, 157 S.W. 1041; Steel v. Metropolitan Insurance Co., 145 S.E. 787, 61 A.L.R. 824; American Central Life Insurance Co. v. Bott, 130 N.E. 432; New York Insurance Co. v. Chittenden Eastman, 112 N.W. 96; 14 R.C.L. 1400; 29 Am. Jur. 943; Hempstead v. Hempstead's Administrator, 27 Mo. 187; State to the Use of Hempstead v. Coste, 36 Mo. 347; Stolze v. United States Fidelity Guaranty Co., 131 S.W. 915. (3) The bond was for indemnity against loss and not against liability and there was no breach thereof for which the surety would be liable. Burrus v. Continental Life Insurance Co., 225 Mo. App. 1129, 40 S.W.2d 493; Croghan v. Savings Trust Co., 231 Mo. App. 1161, 85 S.W.2d 239; State ex rel. Central States Life Insurance Co. v. McElhinney, 232 Mo. App. 107, 90 S.W.2d 124; John Deere Plow Co. v. Cooper, 230 Mo. App. 167, 91 S.W.2d 145; Beers et al. v. Strimple et al., 116 Mo. 179, 22 S.W. 620; Nofsinger v. Hartnett, 84 Mo. 552; Trust Co. v. Tindle, 272 Mo. 681, 190 S.W. 1025; Southern Real Estate Finance Co. v. Banker's Surety Co., 273 Mo. 293, 184 S.W. 1030; Adel et al. v. Dalton et al., 341 Mo. 454, 107 S.W.2d 1071; Gillen v. Bayfield, 329 Mo. 681, 46 S.W.2d 571; LaClede Construction Co. v. Tudor Iron Works, 169 Mo. 137, 69 S.W. 384; Cal Hirsch Sons Iron Rail Co. v. Paragrould M.R. Co., 148 Mo. App. 173, 127 S.W. 623; Malloy v. Egyptian Tie Timber Co., 207 Mo. App. 465, 247 S.W. 467; 13 Corpus Juris 326; Underwood v. Century Realty Co., 220 Mo. 522, 119 S.W. 400, 25 L.R.A. 1173; Lindell v. Robes, 40 Mo. 249; American Law Institute, Restatement of the Law of Contracts, Sec. 74; Lubne v. Mutual Life Insurance Corp. of New York, 276 Mo. 118, 207 S.W. 320; Town of Canton v. McDaniel, 188 Mo. 207, 86 S.W. 1092; Cravens v. New York Life Ins. Co., 50 S.W. 519; Crohn v. Order of United Travelers of America, 170 Mo. App. 273, 156 S.W. 472; Peak v. International Harvester Co. of America, 194 Mo. App. 128, 186 S.W. 574; Illinois Fuel Co. v. M. O. Railway Co., 8 S.W.2d 843; Hartford Accident Indemnity Co. v. Delta Pine Land Co., 169 Miss. 196, 150 So. 205; Solace v. T.J. Moss Tie Co., 142 S.W.2d 1079; School Dist. of St. Joseph v. Security Bank of St. Joseph, 325 Mo. 1, 26 S.W.2d 785; State ex rel. Southern Surety Co. v. Haid, 49 S.W.2d 329; City of St. Louis v. Maryland Casualty Co., 122 S.W.2d 20; State to Use of Southern Bank v. Atherton, 40 Mo. 209; Wolthausen v. Trimpert, 105 A. 687; 31 Corpus Juris 431; Title Guaranty Co. v. Turnes, 182 Ill. App. 23; Burlington County R. Co. v. N.J. Rapid Transit Co., 77 N.J.L. 737, 73 A. 504; Warwick v. Hutchinson, 45 N.J.L. 61 (aff. 46 N.J.L. 200); John v. Whartham, 188 Ill. App. 406; Drake v. Sherman, 179 Ill. 362; State v. Paul's 21 Mo. 51; Sutherland on Damages (4 Ed), Sec. 480; Loewenthal v. McElroy, 168 S.W. 813; Moberly v. Leonard, 339 Mo. 791, 99 S.W.2d 58; Smith v. Mann, 88 Mo. App. 285; Bray v. Culp et al., 219 S.W. 129; State v. Cordaro, 241 N.W. 448; Nee Insurance Co. v. Baldrich, 185 N.W. 468; Duke v. Taylor, 240 N.W. 319; Central Trust Co. v. Louisville Trust Co., 100 F. 545; Cousens v. Paxton Gallagher, 98 N.W. 277; Ancient Order of United Workmen v. Mooney, 79 A. 233; Harris v. Taylor et al., 150 Mo. App. 291, 129 S.W. 995; Citizen's Trust Company v. Tindle, 272 Mo. 281, 199 S.W. 1025; Moore v. Title Trust Co., 151 Mo. App. 256, 131 S.W. 477; Howell v. Commissioner of Internal Revenue, 69 F.2d 447; Central States Grain Co-Operative, Inc., v. Nashville Warehouse Elevator Corporation et al., 48 F.2d 138; U.S.F. G. Co. v. Centropolis Bank et al., 17 F.2d 913; Union Indemnity Co. v. Vetter, 40 F.2d 608; 27 American Jurisprudence 457; Stag Mining Co. v. Missouri Fidelity Casualty Co., 209 S.W. 321; Steckdaub v. Wilhite, 211 S.W. 915; Most v. Massachusetts Bonding Ins. Co. et al., 196 S.W. 1064; Conqueror Zinc Lead Co. v. Aetna Life Ins. Co., 133 S.W. 156; State ex rel. Western Auto Ins. Co. v. Trimble et al., 249 S.W. 902; Reynolds v. Lathwell, 272 S.W. 1032; Kneisley Lumber Co. v. Edward B. Stoddard Co., 131 Mo. App. 15, 109 S.W. 840; Fullerton Lumber Co. v. Calhoun, 89 Mo. App. 209; Godfrey v. Kansas City Light Power Co., 247 S.W. 451. (4) Said judgment is irregular, does not conform to the statute, is excessive and not supported by the evidence and includes items of damage not authorized by law. 15 Corpus Juris 114; Union Indemnity Co. v. Vetter, 40 F.2d 606; U.S.F. G. v. Highway Eng. C. Co., Inc., 51 F.2d 894; Maryland Casualty Co. v. United States, 108 F.2d 784; Johnson v. United Railways Co. of St. Louis et al., 152 S.W. 362; Albers v. Merchants Exchange, 39 S.W. 473; Berry v. Rudd et al., 108 S.W. 22; Section 3270, Revised Statutes of Missouri, 1939; Suburban Mutual Building Loan Association v. Paulus et al., 80 Mo. App. 36; State ex rel. and to the Use of Macke v. Randolph et al., 186 S.W. 590; State to Use of Rayburn v. Russell, 20 Mo. 99; State ex rel. Cochran v. Cooper, 79 Mo. 464; State to Use of Heye v. Frank, 22 Mo. App. 46; State ex rel. Owen v. Hollenbeck, 68 Mo. App. 366; Mutual Benefit Insurance Co. v. Brown, 80 Mo. App. 459; McDonald v. Loewen, 130 S.W. 52; State ex rel. and to the Use of Lust, 197 S.W. 172; James H. Hurst v. Harry Randall et al., 68 Mo. App. 507; Theodore L. Smith v. Charles Warren, 88 Mo. App. 285; Maloney v. Nelson et al., 39 N.E. 82; 31 Corpus Juris 443; Nofsinger v. Hartnett, 84 Mo. 549; Burrus v. Continental Life Ins. Co., 40 S.W.2d 493.
Henry I. Eager and Michaels, Blackmar, Newkirk, Eager Swanson, for respondent.
(1) Plaintiff's petition states a cause of action, one was proved at the trial, there was a breach of the terms of the bond, a loss was sustained, and judgment for plaintiff was properly entered. State ex rel. Prudential v. Shain, 344 Mo. 623, 127 S.W.2d 675; State ex rel. New York Life v. Trimble, 306 Mo. 295, 267 S.W. 876; Masonic Life Assn. v. Crandall, 41 N.Y.S. 497; Ancient Order of United Workmen v. Mooney, 230 Pa. 16, 79 A. 233; Grady v. John Hancock Mutual (Mo.), 150 S.W.2d 574; Bennett v. Royal Union (Mo.), 112 S.W.2d 134; J.B. Colt Co. v. Gregor, 44 S.W.2d 2, 328 Mo. 1216; Poe v. Illinois Central R.R. Co., 99 S.W.2d 82, 339 Mo. 1025; Home Trust Co. v. Shapiro (Mo.), 64 S.W.2d 717, 228 Mo. App. 266; Phoenix Mut. Life Ins. Co. v. Goessling (Mo.), 121 S.W.2d 182; Sol Abrahams Son Const. Co. v. Osterholm (Mo.), 136 S.W.2d 86; Graves v. Merchants Mechanics Mut. Fire Ins. Co. (Mo.), 139 S.W.2d 1039, 235 Mo. App. 543; Wagner v. Binder, 187 S.W. 1128, l.c. 1155; McCutchan v. K.C. Life Ins. Co. (Mo. App.), 122 S.W.2d 59, l.c. 70; Winter v. Supreme Lodge, K.P., 69 S.W. 662, 96 Mo. App. 1, l.c. 13; Bernblum v. Travelers Ins. Co. (Mo. Sup.), 105 S.W.2d 941, l.c. 945. (2) There was ample consideration for the bond. Ancient Order of United Workmen v. Mooney, 230 Pa. 16, 79 A. 233; Heath v. Salisbury Home Telephone Co. (1930, Div. 2), 326 Mo. 875, 33 S.W.2d 118; Bonslett v. New York Life (Mo. Sup.). 190 S.W. 870; Dickens v. Miller, 12 Mo. App. 408, 413; Winter v. Supreme Lodge, 96 Mo. App. 1, 69 S.W. 662; Browne v. New York Life (C.C.A. 8), 57 F.2d 62; Duff v. Duff, 156 Mo. App. 247, 137 S.W. 909; Ferril v. K.C. Life Ins. Co., 137 S.W.2d 577, 583; Manning v. Prudential Ins. Co. (Mo.), 213 S.W. 897; Walton v. Metropolitan Life Ins. Co. (Mo.), 232 S.W. 259; Burns v. Prudential Ins. Co. (Mo.), 253 S.W. 81; Hood v. Prudential Ins. Co. (Mo.), 56 S.W.2d 1066; Merritt v. Metropolitan Life Ins. Co. (Mo.), 66 S.W.2d 967; Field v. John Hancock Mut. Life Ins. Co. (Mo.), 142 S.W.2d 816. (3) There was ample consideration for the bond, and the Supreme Court has so held. State ex rel. Prudential Ins. Co. v. Bland (Mo.), 185 S.W.2d 654; Ancient Order of United Workmen v. Mooney, 230 Pa. 16, 79 A. 233; Ferril v. Kansas City Life Ins. Co. (Mo.), 137 S.W.2d 577, 583; Heath v. Salisbury Telephone Co., 326 Mo. 875, 33 S.W.2d 118; Bonslett v. N.Y. Life (Mo.), 190 S.W. 870; Dickens v. Miller, 12 Mo. App. 408, 413; Winter v. Supreme Lodge, 96 Mo. App. 1, 69 S.W. 662; Duff v. Duff, (Mo.), 156 Mo. App. 247, 137 S.W. 909. (4, 5) The allowance of interest was proper. Ancient Order of United Workmen v. Mooney, 230 Pa. 16, 79 A. 233; Kamerick v. Castleman, 29 Mo. App. 658; Cupples Co. v. Mooney (Mo.), 25 S.W.2d 125, l.c. 129; Water Co. v. City of Neosho, 136 Mo. 498, l.c. 511; Boon et al. v. Miller's Executors, 16 Mo. 457, l.c. 470; Fields v. Baum, 35 Mo. App. 511; Steckdaub v. Wilhite (Mo.), 211 S.W. 915. (6) The judgment was proper in form. Burnside v. Wand, 170 Mo. l.c. 545; State to Use, etc., v. Bonner, 5 Mo. App. 13; Mutual Benefit Ins. Co. v. Brown, 80 Mo. App. l.c. 462; Gary Realty Co. v. Swinney, 322 Mo. 450, 17 S.W.2d 505. (7) The inclusion of a sum of two hundred dollars in the recovery as attorneys' fees was entirely proper. K.C. Hotel Co. v. Sauer, 65 Mo. 279; Township v. Roberts, 104 Pa. Super. 459, 159 A. 222; Elsman v. Glens Falls Indemnity Co., 262 N.Y.S. 642.
This is an action against one of the sureties upon a disappearance bond. The case was tried before the court, without the aid of a jury, resulting in a verdict and judgment in favor of plaintiff (respondent) for the penal sum of the bond, $2980, and defendant has appealed.
This court reversed that judgment by an opinion reported in 181 S.W.2d 201. The opinion of this court was quashed by an opinion of the Supreme Court reported in 185 S.W.2d 654. All essential facts are set out in the above opinions and only such as are necessary for a decision of the remaining issues will be noted.
The plaintiff (respondent) had issued three policies of insurance upon the life of one James A. Goldsmith. Each of these policies was payable only upon receipt of "due proof of the death of the insured." In 1932, since insured had not been heard from for more than seven years, a presumption of his death arose and claim was made upon the plaintiff by the beneficiary, the mother of the insured. Plaintiff had doubts that the insured was dead, but offered to pay the claim upon the condition that it be furnished a bond. On March 3, 1933, the bond was executed, with Nellie Goldsmith as principal and her son (defendant) and daughter as sureties. Whereupon, full payment of the policies as a death claim was made by plaintiff to Nellie Goldsmith by checks dated March 20 and 21, 1933. The essential provisions of the bond are:
"Whereas, the said The Prudential Insurance Company of America (plaintiff) is about to pay to the said bounded Nellie Goldsmith the sum of One Thousand Four Hundred Ninety ($1,490.00) Dollars, . . . said payment being made by said Company without requiring due proof of death provided for by the terms of said policies, but in reliance upon the truth of representations made to it by the said Nellie Goldsmith . . . that the said James A. Goldsmith is dead.
"Now, therefore, the condition of this obligation is such that if it shall hereafter be proven to the satisfaction of the said Company that the said James A. Goldsmith is alive, and if upon demand made the above bounden parties, or any or either of them, their heirs, executors, administrators, and assigns shall fully indemnify and save harmless said Company from all loss, expense and damage by it incurred by reason of said payment then this obligation shall be null and void, otherwise to remain in full force and virtue in law."
In March, 1941, about eight years after the money was paid, the defendant wrote plaintiff that his brother was alive and asked to be "released" from the bond. Plaintiff verified the fact that insured was alive and at various times requested reimbursement for the money paid on the policies, which was refused by the principal and sureties, and this suit followed.
In our former opinion we held to the effect that the payment of the money by plaintiff to the mother of the insured was only the "subject-matter" of the bond and did not constitute any "loss or damage" as a consequence of any "prospective" breach; that the bond was only one indemnifying against loss, that plaintiff had suffered no compensable loss under the bond and that none had been pleaded or proved.
The Supreme Court held in substance: That the terms of the bond are unambiguous; that plaintiff did not owe Nellie Goldsmith anything on these policies at the time the payment was made, and that it would have owed her only upon the death of the insured and proof of his death; that plaintiff sustained a loss within the meaning of the bond in making such payment; that "The bond was breached when it was proved that James A. Goldsmith, the insured, was alive and relator (plaintiff) made a demand under the bond"; that the language of the bond was sufficient to, and did, give it a retroactive effect and that it covered the payment already made by plaintiff to Nellie Goldsmith; that the petition stated a cause of action and plaintiff's evidence supported the same.
Such findings and declarations by the Supreme Court become the law of the case. This is recognized by appellant (defendant) and he now urges that the judgment should be reversed because the trial court erred in allowing plaintiff interest on the money paid to Nellie Goldsmith from the date of such payment, and in allowing attorneys' fees. Neither of these questions has been decided by the opinion of this court nor the Supreme Court. We shall direct our attention to these two alleged errors.
It is appellant's contention that the bond does not provide for the payment of either interest or attorneys' fees, and that no interest could accrue until a demand was made for the repayment of the money by Nellie Goldsmith or her sureties; and that under no circumstances could the court properly allow attorneys' fees in this suit, because the bond had no such provision. Appellant contends that the bond indemnifies it against " all loss, expense and damage by it incurred by reason of said payment"; that interest from the date of the payment of the money is a part of its loss and damage incurred and the attorneys' fees allowed are a part of its expense incurred in suing to enforce the bond. (Italics ours.)
It must be conceded that the bond does not specifically provide for the payment of interest or attorneys' fees. Therefore, the question for solution is whether the broad and general terms " of loss, expense and damage" can be construed to include interest at 6 percent from the date of the original payment and also attorneys' fees.
Defendant, being a gratuitous surety is a favorite of the law. His liability is strictissimi juris and cannot be extended by implication or construction and not beyond the precise terms of his undertaking, which is to be strictly construed. [Harris v. Taylor, et al., 150 Mo. App. 291; Citizens Trust Co. v. Tindle, et al., 272 Mo. 681; State ex rel. Prudential Insurance Co. v. Bland, 185 S.W.2d 654, 656.]
As a starting point to the solution of this question, we construe the Supreme Court's opinion to hold that this bond was breached "when it was proved that James A. Goldsmith, the insured, was alive and relator (plaintiff) made a demand under the bond"; and that because plaintiff's petition alleged such facts it stated a good cause of action. At page 655 of the opinion, the court said: "The only breach of the conditions of the bond alleged in relator's (plaintiff's) petition is that relator ( insured) was proved to be alive and that Nellie Goldsmith, and her sureties, refused, upon demand, to pay relator (plaintiff) the amount of the money paid by it to Nellie Goldsmith." On page 656 of the opinion the court declared, "The bond was breached when it was proved that James A. Goldsmith, the insured, was alive and relator (plaintiff) made a demand under the bond." (Italics ours). It follows that plaintiff's cause of action arose upon the breach of the bond.
Able counsel for plaintiff strenuously argue that the question of "demand" or "breach" of the bond has nothing whatever to do with the question of whether the surety is liable for interest from the date of the original payment. To this we cannot agree.
"The general rule is that, in the absence of an agreement to pay interest, it is implied by law as damages for not discharging a debt when it ought to be paid. . . . Where a contract provides for the payment of money upon the happening of an event, it is not due until the event transpires, and interest does not begin to run until that time." [Saratoga Trap Rock Co. v. Standard Accident Insurance Co., 143 A.D. 852, 128 N.Y. Supp., 822.] The court was there construing an insurance contract of liability for damages and said the policy was "one of indemnity merely." In the present case we held, and the Supreme Court concurred, that this bond was "an indemnifying bond against damage and not liability; . . . It is also the general rule that "interest, when allowed as damages, runs from the date when the right to recover a sum certain is vested in the plaintiff. In actions for breach of contract, it ordinarily runs from the date of the breach or the time when payment was due under the contract." [15 Am. Jur. p. 584, Sec. 168. (See, also, 17 C.J. 919, 920, 922; 25 C.J.S. 637, 639).]
In the present case the plaintiff had no right to recover from Mrs. Goldsmith the money which it had paid her on the policies until, as provided by the bond, it ". . . be proven to the satisfaction of the said company that the said James A. Goldsmith is alive, and if upon demand made the above bounded party . . . shall fully indemnify and save harmless said company. . . ." It is our conclusion that the plaintiff is entitled to interest on the amount paid Mrs. Goldsmith from the time it made demand for the repayment of the money until it is repaid, and that the trial court erred in allowing 6 per cent interest from the date of payment in March, 1933.
It is stated in the briefs that demand was not made until about May 14, 1941, although the record is not clear on the question, and the trial court should ascertain the date of demand and allow interest from that date to the time of entering final judgment in accordance with the views expressed herein.
We have read and considered the various cases cited by plaintiff and conclude they are clearly distinguishable on the facts, with the possible exception of the case of Ancient Order of United Workmen v. Mooney, 230 Pa. 16. The facts in that case are quite similar to those in the present case, but the opinion does not set out the provisions of the bond, but merely states the substance thereof, which appear to be similar to the provisions of the present bond. The court allowed the bonding company interest on the amount of money paid from the date of such payment but it assigns no reason therefor nor cites authorities in support of that conclusion. That opinion is persuasive but not binding upon us, and we decline to follow it by giving it the construction contended for by plaintiff.
Plaintiff cites the case of Cupples Company v. Mooney, 25 S.W.2d 125. The St. Louis Court of Appeals was discussing damages for the breach of a contract to purchase certain goods. The court said, l.c. 129 "Defendant argues that interest is not allowable in an action of this character, but our decisions hold to the contrary, provided the loss is one definitely capable of ascertainment, upon the theory that the damages accrue from the breach of a written contract which brings the case within the purview of section 6491 R.S. 1919 (now Sec. 3226, R.S. 1939). . . . The fact that plaintiff subsequently reduced the damages by the resale was in defendant's favor, and does not militate against the conclusion that the latter was in default from the time of the breach, and obligated to pay interest, if at all, from the time his indebtedness became due and payable. . . . (Italics ours). Thus this case recognizes the rule that interest, as damages, is allowed from the date of the breach of the contract. Other cases cited by plaintiff allowing interest are to be distinguished on the facts.
We believe the underlying principle in all such cases is to the effect that a party may be charged with interest from the time he becomes obligated to pay a sum of money or, in other words, when he breaches his obligation. In the instant case the Supreme Court holds this bond or written obligation was breached at a certain time, and it is our conclusion that defendant should be charged with interest from the date of the breach.
Directing our attention to the assignment that the court committed error in allowing attorneys' fees for bringing the suit on the bond, it is conceded there is no statute in Missouri authorizing the allowance of attorneys' fees in this kind of suit. The right to recover attorneys' fees from one's opponent in litigation as a part of the costs thereof does not exist at common law. Such an item of expense is not allowable in the absence of a statute or of some agreement expressly authorizing the taxing of attorneys' fees in addition to the ordinary statutory costs. The term "costs" or "expenses", as used in a statute, is not understood ordinarily to include attorneys' fees. Generally, it is held that attorneys' fees are not included within a contractual provision for the payment of "expenses." [14 Am. Jur., p. 38, Sec. 63; Annotation: Ann. Cas. 1914 C, 1300, 1301.] (Citing an array of authorities to support the text).
However, it has been held that the clause "expense of litigation" in a liability insurance policy would include attorneys' fees. [Aetna Life Insurance Co. v. Bowling Green Gas Light Co., 150 Ky. 732, 150 S.W. 994.] But this bond does not include such a clause.
The decisions of the various states seem to allow or deny interest and attorneys' fees under various facts and are not at all uniform; but it is our conclusion, giving a strict construction to the provisions of the bond, as we must do, the plaintiff is not entitled to allowance of attorneys' fees and should be allowed interest at 6 per cent per annum from the date of demand, as provided in the bond.
The judgment is reversed and the cause remanded with directions to the trial court to ascertain the date of demand and allow interest on the full amount paid by plaintiff to Nellie Goldsmith from the date of demand until the time of entering final judgment herein, together with costs. [Sec. 3266, R.S. 1939. Gary Realty Co. v. Swinney, 322 Mo. 450-461-62.] All other issues are resolved favorably to plaintiff.
All concur.