People v. Stuyvesant Ins. Co.

• Decision Date: 09 February 1979
• Citation: 413 N.Y.S.2d 843,98 Misc.2d 210
• Parties: The PEOPLE of the State of New York v. The STUYVESANT INSURANCE COMPANY, Surety, for Angelo Adorno, Principal.
• Court: New York Supreme Court

Page 843

413 N.Y.S.2d 843

98 Misc.2d 210

The PEOPLE of the State of New York v. The STUYVESANT INSURANCE COMPANY, Surety, for Angelo Adorno,

Principal.

Supreme Court, Trial Term, Bronx County, Part 19.

Feb. 9, 1979.

Mario Merola, Dist. Atty., Bronx County by Robert J. Carlucci, Asst. Dist. Atty., for the People.

Roy J. Schwartz, New York City, for Surety.

Allen G. Schwartz, Corp. Counsel, New York City by Milton Weinberg and Stephen M. Clayton, New York City, of counsel, for City of New York amicus curiae.

WILLIAM KAPELMAN, Justice:

The issue raised by this motion to vacate a judgment of forfeiture of bail is one of first impression in this state: Can a surety-obligor on a consolidated bail bond terminate its liability prior to the conclusion of the criminal proceeding by including a clause in the bond which expressly limits the effectiveness of the bond to a specific period of time?

On October 14, 1976, the principal was arrested and charged with the crimes of Grand Larceny in the First Degree, Criminal Possession of Stolen Property in the Third Degree, and Criminal Impersonation for allegedly extorting $3600 from a 78-year-old man. Bail was fixed on October 15, 1976 at arraignment in Criminal Court, Bronx County, in the amount of $1000.

On October 20, 1976, Stuyvesant Insurance Company posted bail in Criminal Court in the form of a consolidated bail bond in the sum of $1000. The bond, executed by the surety and approved by the Court, stated in part The Stuyvesant Insurance Company, 877 Brook Avenue, Bronx, New York, Surety, hereby undertake (sic) jointly and severally that the above-mentioned defendant (1) Shall appear before the Criminal Court Judge presiding at the Criminal Court of the City of New York, County of Bronx, Part 1E each and every day to which said examination may be adjourned,; That this bond shall become void one year from date, and (2) further, that if an order be made that said defendant be held to answer a charge of 155.40, 165.40, 190.25-3 or any other crime, the above named defendant shall appear and answer the charge, in whatever Court it may be prosecuted; and shall at all times render self amenable to the orders of and process of the Court; and if convicted shall appear for judgment, and render self in execution thereof; however, this bond does not include time to pay fines; and does not include Appeals and does not include superseding Indictments. If the above named defendant fail to perform either or any of these conditions, that we will pay People of the State of New York the sum of ten hundred dollars ($1000). (Emphasis added)

On October 27, 1976, the Grand Jury of Bronx County returned a twenty-six count indictment against the principal charging him with related crimes for which he had been arrested. The case was therefore transferred from Criminal Court to Supreme Court, Bronx County. The principal appeared in Supreme Court when required throughout 1977, and was at liberty at all times during the proceedings on the bond posted by the surety. On April 6, 1978, the principal pleaded guilty to the crime of Grand Larceny in the Third Degree in full satisfaction of the entire indictment and another pending indictment.

On August 11, 1978, the date set for sentencing, the principal failed to appear in Supreme Court and the Court entered such facts in the minutes. A bench warrant was issued, and the bail bond was forfeited. On August 29, 1978, a judgment against the surety was entered by the Office of the Clerk, Bronx County. The principal returned to Supreme Court on October 25, 1978, and was sentenced to one year imprisonment.

The movant, Stuyvesant Insurance Company, argues that at the time the principal failed to appear in court the bail bond had already expired by its terms. Thus, the movant argues, it was no longer the surety and is not liable on the bond as a matter of law. The motion before this Court is therefore one to vacate the judgment of forfeiture rather than one for remission of forfeiture pursuant to Criminal Procedure Law § 540.30, since the motion is a direct challenge to the right of the Court to enforce the forfeiture of a void bond (see People v. Wirtschafter, 305 N.Y. 515, 519, 114 N.E.2d 18, 20 (1953); People v. Maldonado, 49 Misc.2d 641, 642, 268 N.Y.S.2d 271, 272 (Sup.Ct.N.Y.Co.1966)).

The People contend that notwithstanding the express limitation contained in the bond, (1) the surety must surrender the principal to the court in order to terminate its liability prior to the conclusion of the criminal proceeding; (2) the surety is estopped from raising the contractual limitation in the bond because it wrongfully caused the People to rely on the bail bond by tacitly allowing the principal to remain at liberty after the period of limitation expired; and (3) the clause in the bond limiting its effectiveness violates provisions of the Insurance Law which set permissible fees for bail bonds. The City of New York, appearing as Amicus curiae, asserts that the bail bond was effective and binding on the surety when the principal failed to appear in court because the Criminal Procedure Law does not permit a surety to limit its liability to a specific period of time.

In determining the scope of the surety's liability, this Court is mindful of the well-established principle of suretyship that a surety's obligation is construed Strictissimi juris (Matter of National Recreation Prod., Inc. v. Gans, 46 A.D.2d 618, 619, 359 N.Y.S.2d 803, 804 (1st Dept.1974); People v. Henry, 33 A.D.2d 1031, 1032, 308 N.Y.S.2d 245, 246 (2d Dept.1970)). This rule, simply stated, is that the liability of a surety may not be altered or extended beyond the express contractual obligation without the surety's consent (Becker v. Faber, 280 N.Y. 146, 148, 19 N.E.2d 997, 998 (1939); People v. Henry, supra, 33 A.D.2d at 1032, 308 N.Y.S.2d at 246). Of course, this principle does not create a unique rule of construction applicable to contracts of suretyship. A contract of suretyship must be construed in the same way other written instruments are interpreted to determine the intention of the parties. The limitation of liability imposed by the principle of Strictissimi juris is not upon the interpretation but in application of the contract after interpretation. Thus, after the intention of the parties is ascertained by the ordinary rules of construction, the principle of Strictissimi juris applies, and the court must protect the surety against a liability which is not strictly within the terms of the contract (General Phoenix Corp. v. Cabot, 300 N.Y. 87, 92, 89 N.E.2d 238, 241 (1949); Village of Argyle v. Plunkett, 226 N.Y. 306, 310, 124 N.E. 1, 2 (1919); Richardson v. County of Steuben, 226 N.Y. 13, 19, 122 N.E. 449, 450 (1919); Ulster County Savings Inst. v. Young, 161 N.Y. 23, 30, 55 N.E. 483, 484 (1899); Smith v. Molleson, 148 N.Y. 241, 246, 42 N.E. 669, 670 (1896); Sachs v. American Surety Co., 72 App.Div. 60, 63, 76 N.Y.S. 335, 337 (1st Dept.1902), Aff'd, 177 N.Y. 551, 69 N.E. 1130 (1904); Gamble v. Cuneo, 21 App.Div. 413, 414-415, 47 N.Y.S. 548, 549-550 (1st Dept.1897), Aff'd, 162 N.Y. 634, 57 N.E. 1110 (1900)).

It is therefore clear that the ordinary rules of construction of contracts must guide this Court in construing the provision of the bond at issue. If no ambiguity exists in the contract, or if the terms and language of the contract are not disputed, the meaning and legal effect of those terms are questions of law for the court (Sinkwich v. Drew & Co., 9 A.D.2d 42, 45, 189 N.Y.S.2d 630, 633 (3d Dept.1959)). But if the contract contains any ambiguous language, it should be construed in favor of the party who has accepted the contract and relied on a particular interpretation (United States Rubber Co. v. Silverstein, 229 N.Y. 168, 171, 128 N.E. 123, 124 (1920); Jackson v. Swart, 182 N.Y. 373, 377, 75 N.E. 226, 227 (1905); Smith v. Molleson, supra, 148 N.Y. at 246, 42 N.E. at 670; Sachs v. American Surety Co., supra, 72 App.Div. at 63, 76 N.Y.S. at 337; Gamble v. Cuneo, supra, 21 App.Div. at 415, 47 N.Y.S. at 549). Thus, where a surety company has framed the terms of a bond by issuing a standard form, the bond should be interpreted liberally, and all ambiguities should be resolved in favor of the beneficiary of the bond (McClare v. Massachusetts Bonding & Ins. Co., 266 N.Y. 371, 377, 195 N.E. 15, 16 (1935); People's Bank of Hamburg, N.Y. v. Gates, Inc., 232 App.Div. 328, 329, 250 N.Y.S. 452, 453 (4th Dept.1931)).

The clause at issue in this bail bond, I. e., "That this bond shall become void one year from date," appears on its face to be direct and unambiguous. One troubling aspect arises, however, from its position in the instrument within paragraph "(1)". At first blush, it would seem that this clause limiting liability to one year applies exclusively to the requirements of paragraph "(1)", I. e., that the principal will appear in Criminal Court for the duration of the preliminary hearing. Under such an interpretation, the liability of the surety would be limited only if the preliminary hearing in Criminal Court were adjourned for longer than one year. Consequently, the requirements of Paragraph "(2)", I. e., that the principal will appear in any court at all stages of the prosecution and will render himself in execution of judgment, would not be conditioned by the clause at issue.

However, such an interpretation would be both unreasonable and contrary to practical experience. The clause states that the Bond shall become void in one year, not that the requirements of paragraph "(1)" need not be followed after one year. To interpret the clause in such a manner would ignore the plain meaning of the words. In addition, such an interpretation could not have been within the contemplation of the parties, for a criminal defendant has a right to a prompt preliminary hearing (CPL § 180.10(2)), which should be completed at one session, and may be adjourned for only one day...