Court Opinion

ID: 9650974
Source: CourtListenerOpinion
Date Created: 2023-08-23 15:58:51.193348+00
Date Added: 2024-06-11T18:12:28.139619
License: Public Domain

SWAN, Circuit Judge
(dissenting).
This bond is on a printed form prepared by the Government. Under a familiar canon of construction,1 ambiguities, if any, in the instrument should be construed against the draftsman, but in my opinion the bond is not ambiguous. Its express terms, as well as the relevant statutory provisions applicable to bonds given by postal employees, indicate a continuing, not an annually cumulative liability.
It runs for the principal’s term of service 2 and the stated penalty is $2,000, whether the term turns out to be one year or ten years. It states “Total premium charged $1.30,” and contains no provision that the principal shall pay an annual premium.3 Hence payment of the stated premium gave the obligee of the bond protection in the amount of $2,000 throughout the principal’s term oí service, whether or not additional sums were collected by way of annual premiums under some collateral agreement with the principal. If the obligee at any time considered the bond insufficient security, the relevant statutes provided a remedy. Thus, the Postmaster General may require the execution of a new bond whenever he deems it expedient. 39 U.S.C.A. § 815. By the provisions, of 6 U.S.C.A. § 2, every two years an examination is to be made by the officer required to take and approve a bond to ascertain not only the sufficiency of the sureties but also the sufficiency of the amount of the bond. Under 39 U.S.C.A. § 814 the Postmaster General may, in accordance with regulations which he shall subscribe, accept from a postal employee United States Liberty Loan bonds in lieu of a surety bond. The Government securities so substituted must have a par value equal to the amount of the surety bond required to be furnished. 6 U.S.C.A. § 15. It is obvious that these provisions permitting the deposit of $2,000 of Government securities in place of a surety bond for that amount, did not contemplate that an employee who took advantage of them must annually thereafter throughout his term of service post additional securities of like amount. Since there is no “cumulative” liability imposed on the employee who elects to post securities in lieu of a surety bond, it seems to me wholly inconsistent to impose such liability on one who elects to-give a bond instead of posting securities.
The fact that the surety collected annual premiums from the principal may justify an inference of a collateral agreement between them as to such payments, but I am unable to see how the existence of such an agreement justifies converting a contract of continuing liability in the stated amount of $2,000 into a series of contracts each of which imposes liability in the amount of $2,000. It seems highly improbable that the surety would voluntarily incur a maximum liability of $20,000 for $13 (assuming the employee’s term of service should continue for ten years) and certainly the bond does not express such an intention. Consistent with this view but inconsistent with the idea that cumulative liability was intended is Instruction 9, printed oil the back of the bond.4
*140Concededly there is no decision involving a bond of identical terms. But I see no material difference between the bond at bar and the . one construed in Montgomery Ward & Co. v. Fidelity & Deposit Co. of Md., 7 Cir., 162 F.2d 264. I think we should follow that case and our own dictum in Brulatour v. Aetna Casualty & Surety Co., 80 F.2d 834, 836, where we said: “The authorities * * * illustrate the rule that, where the bond is for an indefinite term, the date it begins to run being the only date given, the fact that the premiums were paid annually does not make the relation a series of separate yearly contracts.”
In my opinion the judgment should be reduced to $2,000.

 Williston on Contracts, Rev. Ed., § 621.

 6 U.S.C.A. § 3: “* * * The liability of the principal and sureties on all official bonds shall continue and cover the period of service ensuing until the appointment and qualification of the successor of the principal. * * * ”

 6 U.S.C.A. § 14 forbids payment by the United States of any part of the' premium of a bond.

 “Instructions.”
“1. It is not required that both, corporate and individual surety be furnished, and either kind will be accepted.
“9. The individual sureties must justify, in sums, in unincumbered real estate, equal in the aggregate to do'uble the penalty of the bond, before a notary public, justice of the peace, or other officer authorized to administer oaths, except a postmaster.”