Case Name: The Ulster County Savings Institution, Appellant, v. James E. Ostrander and Augustus H. Bruyn, Respondents
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1897-03
Citations: 15 A.D. 173
Docket Number: 
Parties: The Ulster County Savings Institution, Appellant, v. James E. Ostrander and Augustus H. Bruyn, Respondents.
Judges: 
Reporter: Appellate Division Reports
Volume: 15
Pages: 173–181

Head Matter:
The Ulster County Savings Institution, Appellant, v. James E. Ostrander and Augustus H. Bruyn, Respondents.
The liability of a surety is strictly construed—a bond given by a bank official, elected for one year, and who continued to serve for several years — it expires with the year in which it is given.
The liability of a surety is limited to the express terms of the contract, and hia obligation, as shown by the terms employed in the contract', should be construed strictly and in his favor.
In an action brought to recover against the principal and against the surety upon a bond, it appeared that on the 16th day of July, 1867, the defendant James E. Ostrander was elected treasurer of the plaintiff “ for the ensuing year,” and then executed a bond with the defendant Augustus II. Bruyn as one of his sureties, which was conditioned that James E. Ostrander should, “at the expiration ” of his office as treasurer, pay and deliver over to his successor all moneys or property due from him, and that he should faithfully, in all things, serve the plaintiff “in the capacity of treasurer as aforesaid during his continuance in office.” The bond did not mention the term of office nor the time of service.
James E. Ostrander was re-elected as treasurer in 1868 and in 1869, but was not again elected to that office, although he remained treasurer until the year 1891. He never gave another bond. It was alleged that he was guilty of defalcations, no part of which occurred prior to 1871. A by-law of the plaintiff enacted that the treasurer should hold office during the pleasure of the board of trustees.
Held, that the surety was only liable upon the bond during the first year for which Ostrander was elected, in which year the bond was executed;
That the liability of the surety was not affected by the by-law, as the trustees, of the plaintiff, by electing Ostrander treasurer for one year, had signified that it was their pleasure that he should hold his office, under his first election, for the term of one year only.
Appeal by the plaintiff, The Ulster County Savings Institution, from a judgment of the Supreme Court in favor of the defendants, entered in the office of the clerk of the county of Ulster on the 15th day of April, 1895, upon the dismissal of its complaint upon the merits, directed by the court after a trial at the Ulster Circuit, and also from an order entered in said clerk’s office on the 15th day of April, 1895, dismissing the complaint upon the merits.
The facts are more particularly stated in the dissenting opinion of Merwin, J.
Severyn B. Sharpe and J. Newton Fiero, for the appellant.
P. & C. F. Cantine, William Lounsbery, Charles F. Cantine and Howard Chipp, for the respondents.

Opinion:
Putnam, J.:
The defendant Ostrander, on July 16,1867, was elected treasurer of the Ulster County Savings Institution for the ensuing year, and with the defendant Bruyn, on that day, executed the bond on which this action was brought, which contains the recitals set out in the opinion of Merwin, J. At the annual meeting of the trustees of the Ulster County Savings Institution, held July 21,1868, the defendant Ostrander was re-elected for the year, and on July 20, 1869, he was again re-elected for the ensuing year.
It is a well-settled principle that "the liability of-a surety is limited to the express terms of the contract; his obligation, so far as warranted by the terms employed, should he construed strictly and favorably to him." (Ward v. Stahl et al., 81 N. Y. 406.)
I think, therefore, that the defendant Bruyn was only liablé on the bond in question during the year for which Ostrander was elected when the instrument was executed. I am unable to see why the principle established in Kingston Mutual Ins. Co. v. Clark (33 Barb. 196); Overacre v. Garrett (5 Lans. 156); Hassell v. Long and Another (2 Maule & S. 363); United States v. Kirkpatrick (9 Wheat. 720); Liverpool Water Works v. Atkinson (6 East, 507); Leadley et al. v. Evans (2 Bing. 32); Lord Arlington v. Merricke (2 Saund. 411), and many other cases that might be referred to, does not apply.
The liability of the defendant as a surety is not in any manner affected by the existence of a by-law of the Ulster County Savings Institution that the treasurer shall hold office during the pleasure of the board of trustees. In this case the pleasure of the board as to the term of office of the treasurer was signified when he was elected. He was elected for the ensuing year, and at the end of that period he was re-elected. The effect of the action of the trustees who made the by-law in question in electing the treasurer for one year prevented such by-law from affecting his term of office.
I think the case was properly disposed of below, and that the judgment should be affirmed.
Parker, P. J., and Landon, J., concurred; Merwin and Herrick, JJ., dissented.