Court Opinion

ID: 9652626
Source: CourtListenerOpinion
Date Created: 2023-08-23 17:28:53.71353+00
Date Added: 2024-06-11T18:12:53.090439
License: Public Domain

SANBORN, Circuit Judge
(concurring). This ease was decided in the court below in favor of the plaintiff: and its counsel seek to sustain it here on the grounds (1) that the bond on which the suit is" based is that of a paid surety, that the construction of this bond is governed by the established rule for the interpretation of contracts of insurance companies, and that that rule is. that if there is doubt about the meaning of such contracts they must be construed most favorably to the insured, and (2) that the meaning of the contract in suit is doubtful and the judgment should be for the plaintiff. I concur in the reversal of this judgment for these reasons:
First. Conceding that the contract of this surety should be construed in accordance with the rule for the interpretation of contracts of insurance companies, nevertheless that rule is not and has not been in the federal courts since the decision of the Supreme Court in 1893 in Imperial Fire Insurance Co. v. Coos County, 151 U. S. 452, 462, 463, 14 S. Ct. 379, 38 L. Ed. 231, that contracts of insurance and contracts of sureties should be treated as. special classes of contracts to be interpreted by the rule that if the meaning. of the agreements is in doubt the construction should be adopted that is most favorable to the assuréd. But the true rule for the construction of such contracts is that they ought to be 'interpreted like other classes of contracts according to the sense and meaning of the terms which the parties have used and those terms ought to be taken, understood and given effect in their plain, ordinary and popular sense fairly and justly to all the parties to the contracts. Atlas Reduction Co. v. New Zealand Ins. Co., 138 F. 497, 499, 71 C. C. A. 21, 9 L. R. A. (N. S.) 433; National Surety. Co. v. Western Pacific Ry. Co., *209200 F. 675, 699, 700, 119 C. C. A. 91; Dorrance v. Barber (C. C. A.) 262 F. 489, 491; Suzuki v. National Surety Co. (C. C. A.) 290 F. 942, 943; Hawkeye Commercial Men’s Assn. v. Christy, 294 F. (8 C. C. A.) 208, 210, 211, 213.
Second. By the terms of the bond on which the defendant is surety it guaranteed to the plaintiff the faithful performance by the Ballard-Greene-Smith Corporation of the latter’s written agency contract with the plaintiff. One of the terms of the bond reads in this way: “That the obligee, upon learning of any act which may be made the basis of any claim hereunder, written notice thereof shall bo mailed to the surety at its office at No. 60 John street, New York City, N. Y., within 30 days after so learning of any such aet.” The agency contract provided that not later than the 15th day of each month the Ballard Company should forward to the plaintiff an account current of its agency business during the preceding month, and that not later than 75 days after the month for which such statement was sent it should forward to the plaintiff a remittance for the balance shown to be due from that statement. Such accounts current were forwarded accordingly to the plaintiff, but the remittances were not made as required by the contract. Seventy-five days after the end of May, 1920, there was $2,538.61 unpaid on the current account for that month; 75 days after the end of June, 1920, there was still due and unpaid $1,660.37 on the current account for that month; 75 days after the end of July, 1920, there was still due on the current account for that month $1,035.02. Each of these defaults of the Ballard Company, each of these failures on their part to make the respective remittances within the 75 days after the expiration of the month for which they were respectively due, was unquestionably an “act which may be made the basis of any claim” under the bond. It is these acts, these failures to remit, that constitutes the gravamen or basis of this suit. The plaintiff learned of these defaults when they occurred, and has known of them ever since. It was required by the express provision of the bond to give to the defendant written notice of each of them within 30 days after they occurred. It failed so to do, and thereby both failed to fulfill the conditions of the defendant’s liability on the bond and committed the first breach thereof.