Illinois Surety Co. v. Hildebrand

GIEGERICH, J.

Plaintiff sues upon an agreement for the payment of premiums upon a bond which the plaintiff signed as surety for the defendant for the performance of a contract made by the latter with the city of New York. A copy of the agreement was annexed to the complaint. It was executed on April 9, 1908, evidently upon a printed blank form, and the provisions for the payment of the premiums are as follows: v

“I do hereby covenant and agree to pay the premium or fees agreed upon, namely, one thousand ($1,000) and five hundred ($500) dollars annually thereafter ($1,000) per annum in advance.”

A further provision of the agreement is as follows:

“If contract runs over one year the premium is to be prorated at the rate of $500 per annum.”

It is apparent from the context of the agreement that the contract referred to in the clause last quoted is the contract between the defendant and the city of New York, and not the contract between the defendant and the surety company.

The language of the agreement upon which the action is-brought is quite ambiguous and uncertain; but, no evidence having been offered_ to explain it, I think the court was bound to interpret xit as meaning that ^1,000 was to be paid on the execution of the bond, but that there should be no further liability for premiums until the contract between the defendant and the city, for the performance of which the plaintiff was surety, had run for one year, and that further premiums were to be paid at the end of each subsequent year at the rate of $500 per annum or at the termination of the contract within the second or any subsequent year at the same rate per annum for such part of the year as the contract should continue. No provision being made for the payment in advance of any but the first premium, and the contract containing the provision for prorating of subsequent premiums, it follows that the defendant could not be required to pay anything in advance at the commencement of the second or any subséquent year because the amount for which he might prove to be liable under the agreement could not then be ascertained, and he certainly could not be required to pay any greater sum, depending upon the plaintiff to return the excess, in the absence of a clear agreement to that effect.

- The plaintiff did not plead that the defendant’s contract with the city had run more than the one year. At the opening of the case the defendant moved to dismiss the complaint upon this ground,.and when the plaintiff rested the motion was renewed upon the ground that there was no allegation nor proof of this fact. Nevertheless, the motion was again denied, and the plaintiff was permitted to reopen and to give such proof over the defendant’s objection and without any amendment of the complaint.

For this error the judgment and order must be reversed, and a new-trial ordered, with costs to the appellant to abide the event.

Judgment and order reversed, and new trial ordered, with costs to the appellant to abide the event. All concur.