
    William B. Taylor v. Standard Life & Accident Insurance Company.
    Filed March 18, 1896.
    No. 6328.
    1. Principal and Agent: Contract oe Employment: Alteration: Evidence: Liability oe Agent’s Sureties. A contract between an insurance company and its agent provided that the latter should make monthly reports of business transacted and on demand pay over to his principal all moneys due him. The agent’s compensation was fixed at twenty-five per cent of the business done and he gave a bond to secure the performance of his contract. After the execution of the bond, and without the knowledge of the surety thereon, the agent’s compensation was changed to twenty-eight and one-third per cent, and he was given permission to employ solicitors of insurance, paying them out of his commission. In a suit against the surety on the bond to recover money which it was alleged the agent had not accounted for, held, (1) that the compensation of the agent was not an essential ingredient of the contract of the surety; and increasing his compensation did not amount to a re-employment of the agent at a different compensation from that fixed in the contract; (2) that there had been no material alteration in the terms of the contract to secure the performance of which the bond was given, and that the surety thereon was not released.
    Error from the district court of Douglas county. Tried below before Davis, J.
    Tbe facts are stated in tbe opinion.
    
      Frank T. Ransom, for plaintiff in error:
    There was a clear departure from tbe terms of tbe contract Tbe testimony offered to prove tbe alteration in tbe terms of tbe agreement should have been received. {Hills v._ Rue, 4 Pa. St., 348; Anderson v. Bellenger, 87 Ala., 334; Farnsworth v. 
      
      Coots, 46 Mich., 117; Kimball v. Baker, 62 Wis., 529; Stull v. Hance, 62 111., 52; Phillips v. Singer Mfg. Co., 88 111., 305; Brandt, Suretyship, sec. 397, and cases cited.)
    
      George W. Ambrose and Frank H. Gaines,.contra.
    
    References: Atchison & N. R. Co.'v. Washburn, 5 Neb., 123 ;■ Stoddard v. Onondaga Annual Conference, 12 Barb. [N..;Y.], -573; McKyring v. Bull, 16 N. Y., 308; Peet v. O’Brien, 5 Neb., 363; Lawrence v. Wright,,2 Duer [N.'Y.j, 674; Yan Schaich v. Winne, 16 Barb. [N. Y.], 90; Schenck v. Naylor, 2 Duer [N. Y.], 675; Chamberlain v. Gorhann, '20 Johns. [N. Y.], 145; Reynolds v. Rogers, 5 O., 170; Strawbridge v. Baltimore & O. R. Go., 14 Md., 360; Minor v. Mechanics Bank, 1 Pet. [U. S.],,73.
   Ragan, C.

On the 23d day of September, 1890, one M. O. Nichols was a general or district agent of the Standard Life & Accident Insurance Company of Detroit, Michigan, hereinafter called, the “Insurance Company.” On that date he appointed one R. C. McClure his agent, for the purpose of canvassing for applications for insurance in the Insurance Company, issuing policies and tickets therefor, and attending to such other duties as might properly appertain to the agency in and for the city of Denver, Colorado. By the terms of McClure’s contract of employment, which was in writing, he agreed to keep regular and accurate statements of all the transactions and business done by him as Nichols’ agent, and on or before the 10th of each month transmit to Nichols a report in detail of the business transacted up to and including the last day of the- previous month. These reports were to show the balance for which McClure was accountable by reason of his agency. The contract of employment provided further that McClure should hold in trust for Nichols all moneys and securities collected and received by him-as agent, and faithfully pay over and account for the same to Nichols or to the Insurance Company, or its representative, in case of Nichols’resignation, removal, or death. On the 24th day of September, 1890, McClure as principal, and W. B. Taylor as surety, executed a bond to Nichols, conditioned for the faithful performance by McClure of his agreements in his said contract of employment as Nichols’ agent. Nichols brought this action in the district court of Douglas county against Taylor, the surety on the bond, to recover a sum of money which he alleged McClure had collected as agent and failed to account for and pay over. . By agreement of counsel the Insurance Company was substituted in the district court as plaintiff for Nichols. It had a verdict and judgment and Taylor prosecutes to this court a petition in error.

1. The first assignment of error argued in the brief here relates to the ruling of the district court in excluding evidence offered by Taylor to prove that the principals in the bond had changed the contract to secure the. performance of which the bond sued on was given, or, in effect, that whatever money McClure had collected and failed to account for while agent of Nichols, he had collected under a contract made between Nichols and McClure subsequent to the date of the contract of the 23d of September, 1890, and materially different from, said contract Taylor, in his answer, admitted the execution of the contract of September 23d, 1890, between Nichols and McClure, the execution of the bond sued upon, and substantially denied all the other allegations in the petition. Another defense interposed by Taylor was that from the time of the execution of the contract of the 23d of September, 1890, McClure made regular monthly reports to Nichols; that said reports showed what was due from McClure on account of his agency; that Nichols, upon receipt of said reports, did not insist on McClure paying the amount which the report showed he owed, but allowed McClure to retain said amounts and extended the time within which the said sums of money might be paid. Another defense of Taylor was that Nichols, knowing that McClure was in default, neglected to notify Taylor, the surety, of the fact and continued to deal with McClure and allow him to continue to act as agent under the contract and bond. A still further defense pleaded by Taylor was that Nichols was guilty of negligence in not demanding from Mc■Clure- on the 10th of each month, when he made a report, the amount of money for which the report •showed he, McClure, was indebted, and was iguilty of negligence in neglecting to notify Taylor •of the condition of McClure’s accounts. Neither .argument nor citation of authority is necessary to show that under this answer the plaintiff in error was not entitled to have the evidence he offered go to the jury. If the principals to the contract, to secure the performance of which by McClure the bond was given, materially modified that contract so that the money collected by McClure and not accounted for by him was in fact collected under a contract materially different from the one to secure which the bond sued on was given, then that fact should have been pleaded as an affirmative defense. The fact, if it existed, was new matter and could not be proved under a general denial.

2. The second assignment of error argued relates to the refusal of the district court to give the jury the following instruction: “If you believe from the evidence that up to the 3d day of June, 1891, the said R. C. McClure acted as agent, under the contract of September 23,1890, for the plaintiff, and up to that date he paid over to the plaintiff or its agent all moneys coming into his hands by virtue of the agency, and that about that date said McClure and the plaintiff modified the contract of September 23, 1890, by a letter of June 3, 1891, and that all the money for which said McClure is now in default was collected by him as agent of the plaintiff under the modification of June 3, 1891, you will find for the defendant, W. B. Taylor.” The letter introduced in evidence, by which plaintiff in error claims that the contract of the 23d of September, 1890, was modified by Nichols and McClure, conceded to McClure a commission on all new business of twenty-eight and one-third per cent, whereas under the contract of September 23, 1890, McClure’s commission on business was to be twenty-five per cent. This change in the amount of compensation which McClure was to receive in no manner changed the duties of McClure and did not amount to a material modification of the contract between McClure and Nichols; and were it Competent and relevant evidence, it would not prove or tend to prove a material alteration of the contract to secure the performance of which the bond in suit was given. (Domestic Sewing Machine Co. v. Webster, 47 Ia., 357; Amicable Mutual Life Ins. Co. v. Sedgwick, 110 Mass., 163.) The letter also authorized McClure to secure or appoint solicitors of insurance if he should think best, on the basis that his, McClure’s, commission was to be twenty-eight and one-third per cent on new business, the persons so appointed as solicitors by him to be paid their commission out of the commission allowed him, McClure. This was not adding to the obligations or duties required of McClure by his contract, and not a material alteration of it. In other words, the risk which the surety assumed in signing McClure’s bond was not increased nor indeed Changed by this letter. The letter itself was irrelevant testimony under the issues made by the pleadings and should not have been admitted.. But the letter as evidence did not have the effect claimed for it by the plaintiff in error. The compensation of McClure was not an essential ingredient of the contract of the surety, nor did this letter amount to a re-employment of McClure at ¡a different compensation. The court did not err in refusing to give the instruction. The judgment of the district court is right and is in áll things.

Affirmed.  