Sales Corp. v. United States Fidelity & Guaranty Co. , 215 Ala. 198 ( 1926 )

The chief and, indeed, the decisive question in this case, as shown by the record, is whether the guaranty of the bond is limited to the defalcations of the employee, Sneed, in managerial service, at Oxford, Ala., or whether it covers such service, as actually rendered by him, in the Denegre Company's business, at Anniston.

The trial court received evidence showing that the company never had a place of business at Oxford, but did have one at Anniston, where it operated one of its stores at the time of defendant's guaranty, and continuously from 1918 to 1921; and that Sneed, at first, lived at Oxford, which lies immediately outside of Anniston. But the guaranty bond, upon which the action is founded, was excluded from the evidence upon the objection of defendant — upon the theory, we presume, that, as a matter of law, the bond could not be applicable to Sneed's managerial service other than in a store conducted by him at Oxford.

Looking only at the designations of position and location in the schedule, we would be inclined to hold that the location named as to each of the seven employees included in the guaranty was intended to be definitive and not descriptive merely; and hence that a claim for indemnity under the bond should be limited, as to each employee, to his services in the conduct of a business at the location specified for him.

But a comprehensive view of the entire document leads us to a different conclusion. It contains provisions permitting "interchanges or substitutions among any of the employees," provided the amount of liability should not be increased as to any employee; and, again, no distinction is made between Birmingham, Montgomery, Mobile, Dothan, and Oxford (or Anniston), as to the amount of the guarantor's liability or the amount of the premium paid by the insured.

Very clearly, the contract of guaranty did not contemplate, as a material factor, the location of Sneed's service at Oxford rather than at Anniston. The material factors were the personality of the manager and the character of his service; and it was competent for the employer-guarantee to show that it had no business at Oxford, and that the employee was conducting the business in the adjoining city of Anniston, and therefore that the Anniston business was the one intended to be covered by the undertaking as to Sneed.

Contracts of guaranty, especially when based upon a valuable consideration moving to the guarantor, are not like contracts of ordinary suretyship, but are construed more strongly against the guarantor, when their language is ambiguous and susceptible of more than one meaning. Scott v. Wyatt, 24 Ala. 489, 495, 60 Am. Dec. 485; Russell v. Garrett, 204 Ala. 98, 85 So. 420; 28 Corp. Jur. 933, § 79. This is a contract of indemnity insurance, and this court has held that it must be construed as are other contracts of insurance, i. e.:

"All fair doubts are to be resolved in favor of the party to be indemnified." Ala. Fid. Cas. Co. v. Ala. Penny Sav. Bank,200 Ala. 337, 76 So. 103 [10th headnote]; 31 Corp. Jur. 426, § 18.

The plaintiff offered as evidence the identical bond set out in his complaint, and its rejection was prejudicial error. It is true, as found by the trial court, that there was no evidence showing any defalcation by Sneed; but the exclusion of the bond, upon which plaintiff's claim exclusively depended, rendered such evidence nugatory and, indeed, legally inadmissible, and ended the case so far as plaintiff's ability to proceed with it was concerned. Plaintiff might better have taken a nonsuit at that stage, but was not bound to do so, as such a ruling may be reviewed on appeal after final adverse judgment.

The issues seem to have been adequately presented by the pleadings before the court, and we deem it unnecessary to pass upon technical questions of pleading.

We think the cause should be tried again with the bond in evidence, and, to that end, the judgment will be reversed and the cause remanded.

Reversed and remanded.

ANDERSON, C. J., and THOMAS and BOULDIN, JJ., concur.