Fidelity & Deposit Co. v. Callahan Bros.

Citations

• 98 Kan. 547
• 158 P. 658
• 1916 Kan. LEXIS 123

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>1. Insurance — Surety Bond — Action for Premium — Company Not Bound by Contract between Assured and Third Party — Release Void. A surety bond for the faithful performance of a contract with a drainage district, under the provisions of section 8026 of the General Statutes of 1909, was furnished by a casualty company under a contract by which the principal agreed to pay an annual premium each year in advance. The contract required three years for its completion. The principal refused to pay the premium for the third year on the ground that he had made an arrangement with the board of directors of the drainage district, by which the board canceled the bond and released the surety; held, that the attempted release and cancellation of the bond furnished no defense to an action to recover the stipulated premium, because, (a) the contract right of the surety to collect the premium could not be affected by an agreement between the board and the contractor to which the surety was not a party. (6) As the statute required the board to exact the bond but conferred no power upon it to cancel the same or release the surety before the completion of the contract, the attempted cancellation and release was void'.</p> <p>2. Evidence — Unambiguous Contract — Usage—Custom. There being no uncertainty or ambiguity in the contract for the payment of the premium, evidence of usage or custom of other surety companies in such matters was properly excluded.</p>