Caldwell v. United States Fidelity Guaranty

A supersedeas bond was executed by the trustees of the Cumberland University, in the case appealed to this court styled Trustees of Cumberland University v. Caldwell et al.,203 Ala. 590, 84 So. 846. That suit was for the sale of real estate for division among tenants in common, and the supersedeas on the appeal was for the purpose of staying the distribution of the funds pending the determination of the rights of the parties thereto by this court.

The proper bond to have been executed in a case of this character would have been that prescribed by section 2875 of the Code of 1907. Such a bond would be payable to the register, but the bond here was nevertheless good as a common-law bond, and the action is properly prosecuted in the name of the payee for the use of the parties aggrieved (Babcock v. Carter,117 Ala. 575, 23 So. 487, 67 Am. St. Rep. 193), and interest on the fund withheld and attorney's fee for defending the appeal are properly claimed as recoverable damages in a suit of this character (Miller v. Vaughan, 78 Ala. 323).

Counsel for appellee rely upon the well-recognized principle that a surety is bound only by the letter of his contract, which cannot be enlarged or changed without his consent, citing Boulden v. Estey Organ Co., 92 Ala. 182, 9 So. 283; City Council v. Hughes, 65 Ala. 201; Steele v. Tutwiler, 63 Ala. 368. We do not controvert this proposition, but we are of the opinion that it is given improper application to the instant case. In the Hughes Case, supra, recognizing this principle, the court said:

"The surety, though bound equally with the principal, stands in a purely voluntary and gratuitous relation. The extent of liability incurred by him is that expressed, or necessarily included, in the words in the contract or obligation."

In the case of Steele v. Tutwiler, supra, the condition of the bond was "to prosecute the appeal to effect, and to satisfy such judgment as the Supreme Court may render in the premises." The opinion in that case discloses that the only judgment proper to be rendered in cases of that character had been paid, and, as this was the only condition of the bond, no breach was shown. As will hereinafter appear, that authority is without application to the case at hand. In Boulden v. Estey Organ Co., supra, the defeasance clause, instead of providing for the payment of the costs and damages as prescribed by the statutes, merely provided for the payment of all costs, and falls within the influence of the Steele Case, supra.

Here, a different situation is presented. The language used in the defeasance clause of the bond in question is ambiguous to such an extent as calls for a construction of its meaning by this court. We know of no cases which hold, when such is the situation, the court may not, under a proper rule of construction, in the light of surrounding circumstances, and the objects and purposes to be subserved, construe the instrument or obligation entered into so as to arrive at the intention of the parties and its true meaning. Indeed, we think this was demonstrated in the opinion in the Hughes Case, cited above, wherein the court said:

"We concur with counsel for the appellant that the condition of the bond ought to be read and construed in connection with the charter, and its provision that the clerk should continue in office until his successor was elected and qualified."

We have given careful consideration to a proper construction of the language used in the supersedeas bond, upon which this suit is founded. In the defeasance clause the obligors have promised to pay —

"such damages and costs as the Supreme Court may render in the premises as any party aggrieved may sustain by reason of the wrongful appeal and suspension of the execution of said decree."

Counsel for appellee would restrict this language to the payment of such costs and damages as the Supreme Court may by its judgment render in the premises. The effect of such construction would be to restrict the bond to the language found in the Steele Case; that is, merely to satisfy such judgment as the Supreme Court may render in the premises. This would leave no room for operation of the words "any party aggrieved may sustain," and we are of the opinion that such construction is manifestly unwarranted.

On the contrary, after a careful examination, in comparison of this bond with section 2875 of the Code, we are persuaded that it appears upon the face of the instrument as an ineffectual effort to conform to the provisions of that section. We agree with counsel for appellant that, as it is written, the bond calls for two kinds of costs and damages, such as, in the first place, the Supreme Court may render in the premises, and, in the second place, such as any party aggrieved may sustain by reason of the wrongful appeal and suspension of the execution of said decree.

Damages and costs are the object of the verb "pay," followed by two clauses, each connected by "as." If the word "and" were interposed between the words "premises" and "as," or, indeed, if a semicolon were to follow the word "premises," we think the meaning would be plain to the effect that the obligors agreed not only to pay such damages and costs as the Supreme Court might render in the premises, but also such damages and costs as any party aggrieved may sustain by reason of the wrongful appeal.

In the construction of contracts, as well as statutes, there are numerous instances where the word "and" has been construed as "or," and vice versa, to effectuate the plain and evident intent of the parties, or Legislature, as the case may be. These authorities were considered in the recent case of Rutland v. Emanuel, 202 Ala. 269, 80 So. 107, and attention was directed to the cases cited in the note in Ann. Cas. 1917C, 306, and Ann. Cas. 1913A, 1058. It has also been held permissible to interpose words in a contract to make the meaning clear, and carry out the intention of the parties, and for the same purpose it has been held that the court may employ proper punctuation marks in reading the contract. 13 Corp. Jur. 535. Ambiguity in a negotiable note was recently considered in Dozier v. Vizard Inv. Co., 203 Ala. 421, 83 So. 575; and in Boykin v. Mobile Bank, 72 Ala. 262, 47 Am. Rep. 408, it was recognized that words may be supplied when necessary to carry into effect the reasonable intent of the parties, and numerous illustrations are cited in the opinion.

The purpose of the supersedeas bond in the instant case was to require the withholding of the distribution of the funds pending the appeal, but in the very nature of the case the Supreme Court was not called upon to render any judgment for damages. It will appear, therefore, that, if the construction insisted upon by counsel for appellee is correct, the bond merely secures the costs of appeal, for which no supersedeas was required. Ex parte Cudd, 195 Ala. 80,70 So. 721. As said by this court in Minge v. Green,176 Ala. 343, 58 So. 381, and frequently repeated:

"Courts are loath to strike down deliberate contracts because of supposed uncertainty in any of its terms; and, if any of these terms are ambiguous, and prima facie capable of more than one meaning, the court will look to the situation of the parties and the objects they had in view to determine their true meaning."

See, also, Hamilton v. Stone, 202 Ala. 468, 80 So. 852; Ashley v. Cathcart, 159 Ala. 474, 49 So. 75.

All the provisions of a contract must be construed together, so as to give harmonious operation to each of them, so far as their language will reasonably permit. Manchester Sawmills Co. v. Arundel, 197 Ala. 505, 73 So. 24. The condition of the bond in the case of Decker v. Decker, 9 Ala. App. 241,63 So. 24, relied upon by counsel for appellee, is unlike that here, and is without application to the instant case.

While we fully recognize the general rule that the surety is entitled to stand upon the terms of his contract, yet this rule can furnish no protection from liability upon the contract he in fact entered into. The rule cannot be made applicable to relieve the surety in the instant case, for the question here remains, What is the meaning of the language used? What was the intent of the parties, as gathered from the terms of the contract itself?

We have reached the conclusion that this language, especially when viewed in the light of the surrounding circumstances and the object to be accomplished, demonstrates an intention on the part of the obligors to bind themselves for the payment of such damages and costs not only as may be ascertained by judgment of the Supreme Court, but also as "any party aggrieved may sustain by reason of the wrongful appeal and suspension of the execution of said decree."

We are therefore of the opinion that the trial court was in error in sustaining the demurrer to this complaint, and the judgment will be reversed and the cause remanded.

Reversed and remanded.

ANDERSON, C. J., and SAYRE and MILLER, JJ., concur.