OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

U.S. Department of the Interior

Search conducted by: Joyce Zweben Scall Page 1 of 2

COALEX STATE INQUIRY REPORT - 162

August 1990

Olga Brunning, Esquire

Department of Natural Resources

Tawes Building

580 Taylor Avenue, Room C-4

Annapolis, Maryland 21401

TOPIC: BOND FORFEITURE: RENUMBERED BOND

INQUIRY: A bond issued during the interim program period was renumbered when the 

permanent state program went into effect. The operator forfeited the bond. The surety will not 

pay, claiming it was released from responsibility when the bond number was changed. Is there 

any case law on this issue? 

SEARCH RESULTS: Research, conducted using LEXIS, failed to identify any cases ruling on 

renumbered bonds. A number of cases were identified that discuss varying reasons for reforming 

bonds. In the cases listed below (and attached) there were mistakes made on bonds, but the 

courts ruled, in cases where the bonds were or were not reformed, that the parties were in 

agreement as to the terms of the bond at the time the bonds were originally executed. 

AETNA CASUALTY & SURETY CO. v L D BRECKENRIDGE et al., 97 Fla. 375, 121 So. 

102 (Fla 1929).

By mutual mistake, a surety bond, written to cover a building contract, was dated incorrectly. 

The court determined that reformation of the bond to correct the date was not necessary, that the 

bond, if reformed, "would have the same effect that it has in its present form.... The bond 

expresses the agreement as it was understood and designed to be made." 

With a similar ruling, see NATIONAL UNION FIRE INSURANCE CO. OF PITTSBURGH v 

DENVER BRICK AND PIPE CO. et al., 162 Colo 519, 427 P 2d 861 (Colo 1967), attached.

COMMERCIAL CASUALTY INSURANCE CO. v LAWHEAD, 62 F 2d 928 (4th Cir 

1933), cert. den. 289 US 731 (1933).

In choosing the form of a bond to guarantee the payment of a time deposit, the surety issued the 

wrong form "because of mistake in the selection of the form or as to the meaning of the language 

used in the form selected." The court found that all of the parties were in agreement at the time 

the bond guaranteeing the payment of the deposit was executed, that through "mutual mistake the 

bond as executed did not cover the agreement", therefore, the bond should be "reformed to 

embody the agreement". 
OFFICE OF SURFACE MINING RECLAMATION AND ENFORCEMENT

U.S. Department of the Interior

Search conducted by: Joyce Zweben Scall Page 2 of 2

SKELTON v FEDERAL SURETY CO., 15 F 2d 756 (8th Cir 1926).

In this construction contract case, the court found satisfactory proof that the parties understood 

that the indemnity contract would cover both the performance bond and the statutory bond even 

though, by mutual mistake, the "specific mention of the statutory bond" was inadvertently 

omitted "from the written instrument." 

"[A]ppellant understood that he was indemnitor as to both bonds; that he recognized his liability 

while the contract was being performed, and after it had been completed."

MULBY v DUNHAM, 29 Ohio App 51, 162 NE 718 (Ohio Ct App 1927).

In holding that the evidence was insufficient to "warrant reformation of a supersedeas bond" the 

court found that:

"In an action to reform an instrument for mistake, the presumption is that the contract or written 

instrument, as executed, contains the agreement of the parties, and to overcome this presumption 

the mistake must be proved by satisfactory evidence."

RIVER VALLEY, INC. v AMERICAN STATES INSURANCE CO., 287 Ark 386, 699 SW 

2d 745 (Ark 1985).

The court ruled in favor of reforming a substitute bond to conform to an earlier bond. 

"[E]veryone in the transaction... mistakenly believed that the second bond was making no change 

except the addition of the bank as an obligee. This proof only satisfies the requirement that the 

proof be clear and convincing."

ATTACHMENTS

A. AETNA CASUALTY & SURETY CO. v L D BRECKENRIDGE et al., 97 Fla. 375, 121 

So. 102 (Fla 1929). 

B. NATIONAL UNION FIRE INSURANCE CO. OF PITTSBURGH v DENVER BRICK 

AND PIPE CO. et al., 162 Colo 519, 427 P 2d 861 (Colo 1967). 

C. COMMERCIAL CASUALTY INSURANCE CO. v LAWHEAD, 62 F 2d 928 (4th Cir 

1933), cert. den. 289 US 731 (1933). 

D. SKELTON v FEDERAL SURETY CO., 15 F 2d 756 (8th Cir 1926). 

E. MULBY v DUNHAM, 29 Ohio App 51, 162 NE 718 (Ohio Ct App 1927). 

F. RIVER VALLEY, INC. v AMERICAN STATES INSURANCE CO., 287 Ark 386, 699 

SW 2d 745 (Ark 1985).