Engler v. People's Fire Insurance , 1877 Md. LEXIS 50 ( 1877 )

Stewart, J.,

delivered the opinion of the Court.

Exception has been taken by the appellant, to the refusal of his four prayers by the Superior Court of Baltimore City.

The bond of the appellant, upon which the suit was instituted, was admitted to have been executed by him in New York, and sent to the appellee, and to have been in its possession from its execution, until its production in Court.

It was ruled by this Court in the case of the Union Bank of Md. vs. Ridgely, 1 H. & G., 324, that in the absence of any evidence to the contrary, the possession and production of such instrument, is sufficient prima facie evidence of the delivery and acceptance thereof.

There was consequently no error in the rejection of the appellant’s fourth prayer.

By the 4th Article of the by-laws of the appellee, after specifying certain duties to be performed by the secretary, he was required to discharge such other duties as might be referred to him, by the board of directors or the standing committees.

Under this provision, the secretary might have been entrusted with the custody of the funds of the company, and the first prayer of the appeliant could not have been granted without ignoring this obligation, and it was properly refused.

The appellants’ second prayer was unsound, and calculated to. mislead the jury.

Whilst recognizing the duty of the secretary to take care of the funds of the company referred to him by the directors or standing committee, the appellant sought an instruction, that if the jury found that he was entrusted with the keeping of the money of the company, without such reference, the appellee could not recover. If the proposition was correct to such extent, that would not debar the appellee from recovering for any other breach.

The condition of his bond provides, not only, that he shall account for all money coming into his hands as secretary ; but further for the faithful performance of his duty as secretary, embracing not only the care of funds confided to him, but the general discharge of his official duty. In effect and upon a fair construction of its terms, stipulating for his honesty and fidelity as an officer of the company. The prayer was not commensurate with the duty, and there was no error in its refusal.

The third prayer of the appellant was properly rejected.

If the secretary was entrusted with the funds of the company, notwithstanding it was also the duty of the president, under Article 3 of the by-laws, to receive the money' paid to the company, and to deposit the same, and who was-responsible for any failure of duty on his part; that did not relieve the secretary from responsibility for the faithful disposition of any funds confided to his care.

(Decided 7th March, 1877.)

The unauthorized act of the president, in entrusting funds to the secretary, could not discharge the secretary from the faithful preservation thereof.

The bond stipulated for the faithful performance of the duty of the secretary. This was an undertaking for fidelity and honesty, commensurate with the scope of his duties ; and the enumeration of certain things by him to be performed by the by-law Eo. 4, did not supersede this obligation, which pervaded every department of his official functions. It was an engagement that he would not avail himself of his position, to misapply or embezzle any of the funds of the company, or resort to any unlawful or dishonest device, inconsistent with the due and proper performance of his trust.

The company had the right under such stipulation, to insist upon indemnity for any deviation from the line of his duty to their prejudice — unless there was some provision in the bond to the contrary, such is the necessary import of the terms of the contract, and the appellant, his security, in executing the bond, must be held as stipulating to that effect.

Whilst it is an undoubted proposition, that the liability of the surety is not to be extended by implication, beyond the terms of his written contract, by which his responsibility is to be measured; the bond constituting the contract must have such construction given to it, as to carry out the intention of the parties thereto, and in this respect there is no difference between such contract and any other. Strawbridge vs. B. & O. R. R., 14 Md., 360; Rochester City Bank vs. Elwood, 21 N. Y., 88; Barrington vs. Bank of Washington, 14 Ser. & R., 405; Minor vs. Mechanics’ Bank, 1 Peters, 41 ; Mayne vs. Manhattan Ins. Co., 2 Otto, 93.

Judgment affirmed.