83 Md. 272 | Md. | 1896
delivered the opinion of the Court.
The American Credit-Indemnity Company is a corporation created under the laws of the State of Loúisiana. Its business consists in guaranteeing or indemnifying vendors of goods, wares and merchandise against losses resulting to* them from the insolvency of their commercial or mercantile debtors. It issues for a money consideration a bond of indemnity which, together with the conditions and terms written or printed upon it, constitutes the contract between the company and the indemnified creditor. Among these conditions it is provided by the eighth clause that “ in the event of failure of, or discontinuance of business by the indemnified, this bond shall become null and void.”
The firm of J. F. Naylor & Company, composed of John F. Naylor and James D. Cassard, located and carrying on business in Baltimore City, purchased from the Credit-Indemnity Company one of these bonds of indemnity. It bears date on the first day of October, eighteen hundred and ninety-two, and covers losses between that date and the thirty-first day of December, eighteen hundred and ninety-three, not exceeding in the aggregate the sum of five thousand dollars over and above a designated initial loss first to be borne by the creditors. Amongst the branches of business conducted by the firm was a knit-goods and hosiery department, and the bond of indemnity held by Naylor & Company related only to sales of this class of merchandise. Mr. Naylor had exclusive charge of this branch of the firm’s affairs, and as between himself and his partner, he .derived all the profit therefrom and bore all the losses therein, though as to third parties there was no difference between this and other departments of the business. The Indemnity Company has been duly credited with the initial loss of fifteen hundred dollars with which the firm was chargeable under the bond, and the question before us on this appeal is whether the company is liable, in view of the circumstances to be stated presently, for the loss sustained by Naylor & Company over and above the sum of fifteen
Hess, Herle & Company, one of the customers of Naylor & Company, purchased from the latter hosiery and knit goods to the value of two thousand, seven hundred and ninety-two dollars and thirteen cents. These purchases were made at various dates between February the sixth and August the eighteenth, in the year eighteen hundred and •ninety-three. On November the ninth, of the same year, Hess, Herle & Company failed within the meaning of the term failure as used in the bond of indemnity. H. E. Patrick & Company, another customer of Naylor & Company, purchased from the latter other goods to the value of one hundred and fifty-nine dollars and fifteen cents, and these were shipped to the vendee in March and July, eighteen hundred and ninety-three. On December the twenty-seventh, of the same year, Patrick & Company failed.. In August, eighteen hundred and ninety-three, Mr. Naylor fell sick, and of that illness he died on October the third following. All of the goods purchased by the two debtor firms just named were shipped to them before the death of Mr. Naylor, and each of the firms failed and became insolvent after his decease. It was admitted that the surviving partner, who instituted the pending suit, furnished the proof of these losses to the Indemnity Company; and that without fault on his part he has received nothing from either of the insolvent firms.
Now, it is insisted that the death of Mr. Naylor dissolved the firm pf Naylor & Company on October the third, eighteen hundred and ninety-three—the date of his decease— and that this dissolution thus brought about was a “ discontinuance of business by the indemnified,” which under the eighth condition of the bond caused the bond to “ become null and void.” Whether this contention is correct and well founded is the single question in the case.
Contracts of this character, like policies of fire insurance,
In resisting the enforcement of an obligation of this character, upon the ground here relied on, the defendant must show that its refusal to fulfill its contract is justified by some term of defeasance contained in the undertaking itself; and unless this appears with reasonable clearness the obligor cannot escape liability. If we entertained any reasonable doubt as to the correct interpretation to be placed on the words we have been considering in the eighth condition endorsed on the bond, that doubt would be sufficient to solve the question against the defendant; because its contract to indemnify must stand in full force unless more than a doubt exists as to whether the defeasible conditions embrace the particular ground of avoidance relied on. The instruction given by the Court agrees with the views we entertain, and we accordingly affirm its judgment.
Judgment affirmed, with costs above and below.