Hurley v. Fidelity & Deposit Company of Maryland

• Decision Date: 02 June 1902
• Parties: EDWARD HURLEY, Respondent, v. FIDELITY & DEPOSIT COMPANY of Maryland, Appellant
• Court: Kansas Court of Appeals

68 S.W. 958

95 Mo.App. 88

EDWARD HURLEY, Respondent, v. FIDELITY & DEPOSIT COMPANY of Maryland, Appellant

Court of Appeals of Missouri, Kansas City

June 2, 1902

Appeal from Pettis Circuit Court.--Hon. Geo. F. Longan, Judge.

AFFIRMED.

Judgment affirmed.

Robert L. McLaran and Charles E. Yeater for appellant.

(1) Plaintiff's evidence shows conclusively that he broke the condition of the bond by not notifying defendant immediately after the first and all subsequent defaults of the principal and defendant's demurrer to the evidence should have been sustained. Michigan Savings & Loan Ass'n v. Trust Co., 73 Mo.App. 161; Rice v. Fidelity & Deposit Co., 103 F. 427-32; Hickock v. Bank, 35 Vt 476; Jones v. Keer, 30 Ga. 93; Bacon v Chesney, 1 Stark 192; Cunningham v. Wrenn, 23 Ills. 64; Lynch v. Colgate, 2 Harris & J. (Md.) 34; Linn Co. v. Farris, 52 Mo. 75; Whitsell v. Mebane, 64 N.C. 345; Robinson v. Epping, 24 Fla. 237; Bonser v. Cox, 4 Blavan's 379; Brandt on Suretyship and Guaranty (2 Ed.), sec. 403, et seq. (2) A condition is a provision on the fulfillment of which depends the taking effect or continuance in effect of the instrument or some clause of it or the existence of some right established or recognized by it, as distinguished from a covenant. Century Dictionary, tit. "Condition" 8 (a).

Cashman & Bohling and James T. Montgomery for respondent.

(1) The provisions of the bond, relied on by the defendant as a defense to this action, do not require the plaintiff to notify the surety company of a default in the first or any subsequent installment, as a condition precedent to a recovery for a breach of the bond. The language of the bond being vague, indefinite and ambiguous, it must therefore be strongly construed against the surety company. American Surety Co. v. Pauly, 170 U.S. 133; Guarantee Company v. Mechanic's Sav. Bank & Trust Co., 80 F. 766, and cases there cited; Shine v. Bank, 70 Mo. 524; 1 Brandt on Suretyship and Guaranty (2 Ed.), secs. 92-94; B. & L. Ass'n v. Gibbs, 119 Mich. 322. (2) The rule that a surety is a favorite of the law, has no application in this case. Where a surety company makes bonds a business, charging a premium, they stand before the law on the same footing as an insurance company. Walker v. Haltzclaw, 35 S.E. 774, and cases cited supra.

OPINION

BROADDUS, J.

--This is a suit by plaintiff to recover against the defendant as surety for the Electric Railway, Light and Power Company. On the fifteenth day of August, 1898, the city of Sedalia, Missouri, by ordinance, required the said Electric Railway, Light and Power Company to pave between and one foot on each side of its street car tracks on Ohio street in said city. On said day plaintiff entered into a contract with said last-named company, by which he agreed to do said paving as required by specifications. Upon the completion and acceptance of said work by said city, the said company was to pay plaintiff at the rate of $ 1.35 per square yard, as follows: one-third in cash when the work was accepted by the city, and the balance in twenty-four equal monthly installments. The said company, with defendant as its surety, entered into a bond to the plaintiff in the penal sum of $ 3,000 for a faithful performance by said company of its contract with the plaintiff.

The plaintiff completed his contract in compliance with his agreement, on the twenty-third day of November, 1898, at which time it was accepted by the city. The amount due him was $ 2,853.41, one-third of which said company paid; the balance was divided into twenty-four equal installments payable monthly from said date of November 25, 1898, eight of which were paid. The remaining installments were not paid.

The obligation assumed by the defendant is contained in the following paragraph of said bond, viz.: "Whereas, said principal has entered into a certain contract of even date herewith, the consideration of which is that said principal shall pay to the said Edward Hurley the sum of one dollar and thirty-five cents per square yard for the paving of that portion of Ohio street between the south line of the M. K. & T. Railway Company's tracks and the north line of Broadway, as described in said written contract; both streets in the city of Sedalia, and when said contract has been fully complied with in accordance with the specifications set forth in the ordinance and contract under which said work is done, and has been fully accepted by the city of Sedalia, then said principal herein is to pay one-third of the total amount of said contract in cash, and the balance to be paid in twenty-four monthly installments, bearing interest at the rate of seven per cent per annum from date. Now, therefore, the conditions of the foregoing obligation is such, that if the said principal shall well, truly and faithfully comply with all the terms, covenants and conditions of said contract on its part, to be kept and performed according to the tenor and effect thereof; then this obligation is to be null and void," etc.

The condition of the bond that has brought about this controversy is as follows: "Provided, that said surety shall be notified in writing of any act on the part of said principal or its agents or employees, which may involve a loss for which the said surety is responsible hereunder, immediately after the occurrence of such act shall have come to the knowledge of the duly authorized representative or representatives of Edward Hurley, who shall have the supervision of...