66 N.Y. 326 | NY | 1876
[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *328 The condition of the bond in suit recited that the principal had been appointed an agent of the plaintiffs "for the purpose of procuring applications for life insurance *330 and collecting premiums thereon," and provided for the payment to the plaintiff of all moneys belonging to the company and the faithful discharge of the duties of such agent. At and prior to the time of the delivery of said bond two instruments had been executed and exchanged between the parties. By one of them the plaintiff appointed De Witt W. Clinton an agent for a territory, which was designated, to procure "applications for insurances," and "to effect all kind of insurances," and provided for the payment of commissions upon "premiums and renewal premiums," and for the forwarding of applications and the payment of moneys received. By the other instrument the plaintiff agreed to allow said Clinton, as agent, a commission upon moneys collected on renewals of policies issued or negotiated through the agency of J.L. McKeever, which was to be applied towards the purchase of the said renewals. And upon payment of the sum of $1,000 the plaintiff agreed to transfer all of said renewals to Clinton, and afterwards to pay him the same commissions as were paid to McKeever.
It is objected that the bond does not include, by its terms, the moneys collected on the renewal premiums, but only such premiums as are embraced within the provisions of the first-mentioned agreement. This position is not well taken. The moneys received are not upon the applications for insurance, but for premiums upon policies and the renewals of the same. Those received upon the McKeever renewals were clearly included within the bond, for they were renewal premiums on policies, and the language of the bond covers this class of premiums as well as all others. It was not a contract of sale, but a mere agreement for a transfer of a right to collect these premiums upon certain conditions which were agreed upon. Even if the effect was, when the amount agreed upon was paid, to transfer these renewal premiums, it is difficult to see how the defendants could be injured thereby. If no transfer was to be made, and the agent had agreed to collect the premiums and pay them over, after deducting his commissions, the defendants would have been clearly liable, and it does not *331
affect such liability, because the agent was to pay a certain sum for the privilege of collecting these renewal premiums. Conceding the application of the rule that a claim against sureties isstrictissimi juris, and that no implications are to be made in giving construction to the terms of a contract not clearly embraced within the language used, the renewal premiums mentioned in the second instrument were fairly within the import and true meaning of the bond. And even if it may be considered that there is an ambiguity in regard to the construction to be placed upon the bond, we have a right to consider, in interpreting its meaning, all the surrounding circumstances and the relations of the parties as they existed at the time of its execution and delivery. (Griffiths v. Hardenbergh,
Nor does it relieve the defendants from liability upon the bond, because the sureties had no knowledge of the second agreement until after the execution of the bond. Even if they were misled by the principal, at whose request the bond was executed, as to the character and extent of the obligation assumed, it is no valid defence to this action, unless it appears that the plaintiff was a party to the fraud practiced upon the defendants. (Casoni v. Jerome,
We have been referred to a class of cases to sustain the position that the bond in question does not cover the liability incurred under the second agreement, but, after a careful examination, we are unable to discover that they sustain the doctrine contended for, as will be seen by a brief reference to the leading adjudications relied upon. In Bigelow v. Benton, (14 Barb., 123) the defendant guaranteed the shipment and delivery to the plaintiffs, by one Durkee, of a barrel of superfine flour for every four and a-half bushels (two hundred and seventy pounds) of good wheat he received from them, and a barrel of corn meal for every two hundred and forty pounds of Indian corn received from them. The contract between plaintiffs and Durkee bound Durkee to deliver a barrel of flour for a less quantity of wheat than was required by the contract of guaranty, and that the corn meal delivered should be "kiln dried." It was held that the surety was not liable. It is apparent that there was an essential difference between the two contracts, and that the latter was not contemplated by, or embraced within, the terms of the guaranty. In Henderson v. Marvin (31 Barb., 297) the guaranty was on a credit of six months, and the credit was extended as to part of the amount, and shortened as to a part, by taking a third party's promissory notes, having different times to run, and it was held that the guarantor was discharged. This was a plain variation from the terms of the guaranty, which, necessarily, rendered it inoperative. In Wilson v. Edwards (6 Lans., 134) sureties for the performance of a contract for the sale of goods on commission were held not to be liable for the payment of moneys received by the principal for goods consigned to him at an agreed price. Here, also, was a material variation of the terms of the contract which the sureties had not agreed to be liable for. In Bagley v. Clarke (7 Bosw., 94) the sureties *333 covenanted to be responsible for the performance of a contract which bound the principal to serve the plaintiff for a term named and no one else, at a fixed salary. This was changed into a contract making the rate of compensation depend upon the quantity of work, making the term of service uncertain, and binding the principal to obey the commands of two other persons in connection with the plaintiff.
Here was a plain and palpable departure from the original undertaking, which discharged the sureties, and the court could not hold otherwise, than that no liability existed. In Grant v.Smith (
There was no error upon the trial before the referee and the order of the General Term must be reversed and that entered upon the referee's report affirmed, with costs.
All concur.
Order reversed and judgment accordingly. *334