Equitable Trust Co. v. National Surety Co.
| Decision Date | 26 February 1906 |
| Docket Number | 239 |
| Citation | 63 A. 699,214 Pa. 159 |
| Parties | Equitable Trust Company v. National Surety Company, Appellant |
| Court | Pennsylvania Supreme Court |
Argued January 15, 1906
Appeal, No. 239, Jan. T., 1905, by defendant, from judgment of C.P. No. 5, Phila. Co., March T., 1901, No. 390, on verdict for plaintiff in case of Equitable Trust Company v National Surety Company. Affirmed.
Assumpsit on a bond. Before RALSTON, J.
The facts are stated in the opinion of the Supreme Court.
Verdict and judgment for plaintiff for $3,843.82. Defendant appealed.
Error assigned was in not entering judgment for defendant non obstante veredicto.
Judgment affirmed.
T. Raeburn White and S. Davis Page, for appellant. -- The words of the bond import a contract of indemnity: Wheeler v. Equitable Trust Co., 206 Pa. 428; Weightman v. Union Trust Co., 208 Pa. 449.
The circumstances of the case show the bond to be one of indemnity against loss sustained by plaintiff under its title policies: Equitable Trust Co. v. Wynkoop, 13 Montg. County Law Repr. 201.
Plaintiff has shown no loss against which it was indemnified, and is not entitled to recover: Wheeler v. Equitable Trust Co., 206 Pa. 428; Equitable Trust Co. v. Wynkoop, 13 Montg. Co. Law Repr. 201.
Francis Shunk Brown, of Simpson & Brown, with him Ira J. Williams, for appellee. -- Appellant's contention that the bond as a whole must be construed as one of indemnity cannot be sustained without doing violence to the plain language of the instrument itself.
And a bond having separable conditions may be sustained as to part, although void as to one or more of the other conditions: Power v. Graydon, 53 Pa. 198; Beacom v. Holmes, 13 S. & R. 190; McKee v. Stannard, 14 S. & R. 380; Hutton v. Helme, 5 Watts, 346.
The bond in suit is totally unlike the bond considered in Weightman v. Trust Co., 208 Pa. 449, which was conditioned merely to hold the obligee harmless; but the bond bound the obligors to furnish all electrical materials and work, and, as in the case of Folz v. Trust & Saving Fund Co., 201 Pa. 583, to complete the contract of Wolf & Ployd.
Before MITCHELL, C.J., FELL, BROWN, MESTREZAT, POTTER, ELKIN and STEWART, JJ.
The question involved in this appeal is whether the bond upon which suit was brought is one of indemnity or of guaranty, or both. If it is a bond of indemnity alone the contention of the appellant must prevail. If, however, it is not only a bond of indemnity but an absolute undertaking to furnish the materials and complete the work, judgment was properly entered in the court below.
The answer must be found in the terms and conditions of the bond itself. The citation of authorities wherein bonds have been construed is of little value to a court in determining the question, unless the covenants of the bonds in the cases cited are the same in import and effect as those of the one under consideration. An obligor can make, and an obligee accept a bond the conditions of which may be a contract of indemnity, or of guaranty, either or both. In these respects they may execute a bond in scope and character suited to their purposes. In order to obtain a clear view of the situation the bond executed by appellant as surety may be divided into three separate and distinct parts. (1) "Shall and do at all times hereafter well and sufficiently save, defend, keep harmless and indemnify the obligee, of and from all loss, damage, costs, charges, liability or expense on or for account of any work or labor done, or materials furnished, or to be done or furnished, for and about the construction and erection of said buildings." (2) "Shall and do furnish all materials and labor necessary to complete the erection and construction of said one hundred and thirty-two houses free and clear of mechanics' liens so far as relates to the particular branch or department recited in said contract;" and (3) "fully comply with all the terms of said contract and faithfully keep and perform the covenants therein contained."
The appellant contends that the bond as a whole is one of indemnity, and that all of the parts thereof should be construed to effectuate the general purpose of the instrument. Wheeler v. Equitable Trust Company, 206 Pa. 428, is relied on as ruling this case in favor of appellant. We do not agree with this position. The suit in that case was brought on a policy of title insurance, which was primarily and essentially a contract of indemnity. It was conceded in that case that the general purpose of the policy was to indemnify against loss, but it was contended that the use of the word "guarantee" in a note relating to the completion of the buildings within a certain time limit, attached to the policy, changed the general purpose of the policy from one of indemnity to one of guaranty. This court held that the fundamental character of that contract could not be changed by the use of a single word which appeared as an exception to an exception in the general contract of indemnity set out in the policy. This distinction is clearly made by Mr. Justice DEAN, who wrote the opinion in that case, wherein it is said: We do not question the correctness of the rule stated in that case. We are of opinion, however, that the facts of the case at bar distinguish it from the case cited. The present action is not founded on a policy of title insurance, and the contract relied on is not necessarily one of indemnity. This suit is based on a bond, and the conditions thereof are whatever the parties choose to make them. It is true they could have made the bond one of indemnity. It is equally true they could make it one of guaranty, either or both.
There can be no doubt that the first clause of the condition of the bond in question is an indemnity, but it is just as clear that the second clause is one of guaranty to furnish the materials and complete the work. The learned counsel for appellant contend, however, that the general import of the contract is one of indemnity, and that all of the...
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