American Surety Company of New York v. Pangburn
| Decision Date | 26 June 1914 |
| Docket Number | 22,413 |
| Citation | 105 N.E. 769,182 Ind. 116 |
| Parties | American Surety Company of New York v. Pangburn |
| Court | Indiana Supreme Court |
From Clark Circuit Court; Jere West, Special Judge.
Action by Marion E. Pangburn against the American Surety Company of New York. From a judgment for plaintiff, the defendant appeals.
Affirmed.
Roscoe O. Hawkins, Gaylord R. Hawkins, Joseph H. Warder, Charles L Jewett and Henry E. Jewett, for appellant.
Edwin C. Hughes, Harry W. Phipps, Frank S. Roby, Ward H. Watson Sol H. Esarey and Elias D. Salsbury, for appellee.
Appellee sued appellant, and Lewis L. Chapman, on a surety bond. The complaint alleges that at the general election of 1898 appellee was elected treasurer of Clark County, for a term of two years, commencing in January, 1899; that he appointed Chapman as his "General Statutory Deputy"; that the bond in suit was executed by Chapman as principal, and appellant as surety, to indemnify appellee against loss by embezzlement or theft, by Chapman, of county funds; that in the year 1899, Chapman embezzled $ 9,822 that came into his possession by virtue of his official position. The action was commenced in September, 1900, but the cause was pending in lower courts for more than twelve years before the rendition of the judgment from which this appeal is prosecuted.
This is followed by numerous conditions, in number 13 of which appears the following:
The instrument exhibited, shows the name of Chapman in the body of the bond, but not as signed at the conclusion thereof, though there appears a blank for such signature, and the attestation thereof. It appears as signed by appellant alone.
Chapman's demurrer to the complaint, for insufficient facts was sustained, and thereafter he ceased to be a party to the action. Appellant's demurrer was overruled, and such ruling is assailed here as erroneous. The complaint alleges that the bond was "executed" by appellant. The averment of the execution of an instrument implies a delivery thereof. Whatever may be the rule in other jurisdictions, this court is committed to the doctrine that a surety assenting to delivery may be bound by an incomplete instrument which shows on its face a failure to execute by the principal. In Wild Cat Branch v. Ball (1873), 45 Ind. 213, the action, as here, was on a bond, joint in form, with the name of the principal appearing in the body thereof, but not to the signature thereto, and with a signature of the sureties only. In its opinion the court on page 218 said: This doctrine is approved in Husak v. Clifford (1913), 179 Ind. 173, 100 N.E. 466. It is true that in the case of Wild Cat Branch v. Ball, supra, there was no express condition, as here, that the bond should not be deemed as executed unless signed by the principal, but we perceive no good reason why, under the facts here appearing on the face of the complaint, the surety may not have waived such express condition. An ordinary accommodation surety is entitled to stand on the strict letter of his contract, but appellant is a surety for hire. The overwhelming weight of recent American authority, does not accord such surety the right to invoke the rule of strictissimi juris, but places such contract in the insurance class and measures the right of such surety by the law applicable to insurance contracts. United States Fidelity, etc., Co. v. Poetker (1913), 180 Ind. 255, 102 N.E. 372 and authorities cited; monographic note to Hormel & Co. v. American Bonding Co. (1910), 33 L. R. A. (N. S.) 513. Treating the contract as one of insurance, the averment of the complaint that the bond was executed by appellant necessarily implies the waiver of the condition precedent set out in the body of the obligation. Penn Mut. Life Ins. Co. v. Norcross (1904), 163 Ind. 379, 72 N.E. 132, and authorities cited. In the course of that opinion it was said on page 387: "It is obvious that, no matter how resolutely a party declares beforehand that he will not be bound except by a contract of a specified character, yet, if he afterwards makes a contract in disregard of his declaration, his prior provision will avail him nothing." Insurance contracts, if doubtful or equivocal, are construed against the insurer. Federal Life Ins. Co. v. Kerr (1910), 173 Ind. 613, 618, 83 N.E. 398, 91 N.E. 230, and authorities cited. There was no error in overruling appellant's demurrer to the complaint.
Appellant answered the complaint in several paragraphs, among which was a verified plea of non est factum. This cast on appellee the burden of proving that the bond in suit was signed and delivered by appellant, in its incomplete condition, with the purpose, on appellant's part, of being bound thereby. There was a trial by jury, resulting in a verdict and judgment for appellee. Appellant's motion for a new trial assigning, among other things, the insufficiency of the evidence, in law and fact, to support the verdict, was overruled and this action is assailed as erroneous.
There was little conflict in the direct evidence relating to the delivery of the bond. Appellee was first elected as treasurer of Clark County in November, 1896, for the term of two years commencing the first Monday in January, 1897. When his term commenced, appellee appointed Chapman as his general statutory deputy, on condition that he furnish a bond. Chapman applied to appellant at its home office in New York, for a bond for the term of one year, and appellant signed a bond in all respects like the one in suit, except as to dates, and forwarded the same to its branch office at Indianapolis, in charge of one Clark a resident assistant secretary who was authorized to deliver to obligees, bonds that had been signed at the home office. Later, on March 14, 1897, the bond was mailed to appellee, at Jeffersonville, Indiana, from appellant's branch office at Indianapolis by appellant's resident assistant secretary with a letter, reading in part, as follows:
That bond was never signed by Chapman. Appellant received $ 50 as a premium. The bond was renewed for the year 1898, in consideration of a premium of $ 50. On January 2, 1899, appellee reappointed Chapman as his statutory deputy, with the understanding that he should give bond as he had done before. Chapman made application to appellant for a new bond, on a printed form, and sent it to appellant's home office, at the city of New York. Thereupon appellant forwarded to appellee a printed form of statement for him to fill out and sign. The same was filled out and signed by appellee and returned to the home office of appellant on January 26, 1899. Some days later at the home office in New York, the bond in suit was signed for appellant by its vice president and assistant secretary and forwarded to appellant's branch office at Indianapolis. The latter office was then in charge of Albert W. Wishard, agent and assistant resident secretary, who was authorized by appellant to deliver to obligees, bonds that had been signed by appellant at its home office. Ward H. Watson, then a resident of Charleston, Indiana, was in appellant's Indianapolis office, in February, 1899,...
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