Pacific Mill & Timber Co. v. Massachusetts Bonding & Insurance Co.

A hearing was granted by this court after decision by the district court of appeal, first appellate district, division two, for the purpose of construing the contract out of which the obligation of suretyship springs in its entirety and also for the purpose of making a more extended statement of the law and its application to the facts of the instant case. We adopt, however, as the law of the case the following portion of Mr. Justice Nourse’s opinion:

It should be borne in mind that the bond in the instant case is a contract of suretyship and is not a statutory or official bond. Further, it is a joint and several bond as distinguished from a joint obligation only. Being a contract of suretyship it must be construed in accordance with the following provisions of section 2837 of the Civil Code: “In interpreting a contract of suretyship the same rules are to be observed as in the case of other contracts.” The evidence conclusively shows that respondent’s attorney in fact, and its manager, Mr. Hall,'were wholly familiar with the terms and conditions of the contract for the performance of which respondent agreed to indemnify appellant in the event the principal should fail to comply…

I concur in the judgment upon the ground that the evidence does not, in my opinion, sustain the finding of the trial court to the effect that the bond was executed by the surety upon the condition it was not to be delivered unless or until it should have been executed by the principal. I think it fairly appears from the evidence that the bond was executed by the surety company unconditionally and that the direction of its manager to have the bond signed by the president and secretary of the principal was a mere suggestion as to the method of procedure and was not intended to and did not have the effect of imposing a condition precedent upon its delivery.

I concur in the conclusion of Mr. Justice Seawell that the splitting up of the $6,500 draft into four smaller drafts aggregating the same amount, payable at the same time and upon the same terms, did not amount to a material alteration of the original contract. I agree, also, with the conclusion that the contract was not performed by the mere placing of the amount of the draft to the credit of appellant upon the books of the McKenzie Company.

Wilbur, C. J., concurred.