Alexander & Alexander, Inc. v. Central Penn National Bank

HESTER, Judge:

Appellant John A. Berg brings this appeal from an Order of the court below refusing to release collateral posted for a bond. We affirm.

Pertinent facts are as follows. In 1975, appellee Alexander & Alexander, Inc., secured a judgment by default for $18,254.19 against various defendants, including Berg, in Philadelphia County, which judgment was then transferred to Montgomery County. Alexander obtained a writ of execution, but the defendants petitioned for and were granted a stay of execution, Pa.R.Civ.P. 3121. For the required bond, Berg posted $37,500.00 of his own preferred stock. The bond filed with the court on April 7, 1976 contained the following clause, the construction of which is much disputed by the parties:

Now if the said Obligor, [Berg] his heirs or his personal representatives, shall and will satisfy the judgment, interest and costs, within ninety (90) days hereinafter, then the above obligation to be void and of no effect, and otherwise to be and to remain in full force and virtue until leave of Court is granted to further pursue the execution.

Following unsuccessful appeals to this Court and the Supreme Court challenging the default judgment,¹ Berg petitioned and was granted a modification of the judgment against him personally, fixing the amount at $502.00 plus interest. This sum he paid to Alexander, who then requested the court to vacate the stay of execution, which request was granted. Berg then petitioned for the return of his $37,500.00 worth of collateral stock, arguing that a necessary condition of the bond was satisfied, viz: “until leave of court is granted to further pursue the execution.” Following argument, Berg’s request was denied, and this appeal followed.

The lower court and appellee Alexander argue that the quoted portion of the bond contains two conditions, both of which must be fulfilled before the collateral may be released: 1) the obligor must satisfy the full judgment, and (2) the court must grant leave to further pursue execution. Berg counters that these two conditions are in the disjunctive. He concedes that the first condition has not yet been met since his payment of $502.00 plus interest does not satisfy the full amount due from him as obligor. But he avers that the fulfillment of the second condition, leave to pursue execution, is sufficient to now authorize release of the collateral.

The covenants in a bond should be construed to mean what the parties intended, so far as that intention can be ascertained from the language. If the language is not free from doubt, however, the circumstances surrounding the making of the bond and the particular purposes for which it was given should be taken into account. In any event, the provisions of a bond capable of two or more meanings are construed most strongly against the obligor. E. P. Wilbur Trust Co. v. Eberts, 337 Pa. 161, 10 A.2d 397 (1940); Manufacturers & Merchants B. & L. Assn. v. Willey, 321 Pa. 340, 183 A. 789; Emery v. Metzner, 191 Pa.Super. 440, 156 A.2d 627 (1959); Krewson v. Erny, 158 Pa.Super. 380, 45 A.2d 240 (1946); 5 P.L.E. Bonds, § 21.

We agree with the court below that the use of the word “and” links the two conditions of the bond: satisfaction of the judgment and leave of court to pursue execution. Employment of a different conjunction joining the two clauses may well have suggested that the parties intended only that one or the other of the conditions need to be fulfilled before the bond is discharged. See, e. g., 9 Std. Pa. Prac. pp. 585-6 (use of phrase “but otherwise” joining two conditions of bond). Although the term “and” has sometimes been construed to mean “or” in certain statutory phrases, see, e. g., In Re Petrash, 425 Pa. 433, 229 A.2d 878 (1967); Burgis v. County of Philadelphia, 169 Pa.Super. 23, 82 A.2d 561 (1951); Appeal of Martin, 33 Pa.Cmwlth. 303, 381 A.2d 1321 (1978), appellant has directed us to no authority suggesting this is such a case. Accordingly, we read “and” to embrace its normal meaning of “connection or addition”. The term “otherwise” means simply “in a different way or different manner”. Webster’s Seventh New Collegiate Dictionary (1970). Instantly, “otherwise” is merely an adverb introducing a different condition which must be met in addition to (“and”) the previous condition before the collateral may be released. In view of these normal definitions of the disputed words, it is clear that the bond recites two conditions, both of which must be fulfilled. Even were we to accept the appellant-obligor’s interpretation as another reasonable construction, we would still be required to construe the provisions of the bond most strongly against the obligor. Commonwealth v. Friedman, 121 Pa.Super. 591, 184 A. 672 (1936).

Accordingly, the order of the lower court, refusing to release the collateral, is hereby affirmed.

Order affirmed.

SPAETH, J., files a dissenting opinion.

1 . See, Alexander & Alexander, Inc. v. Central Penn Banking, 244 Pa.Super. 517, 371 A.2d 502 (1976), alloc, den. Jan. 31, 1977.