United States Fidelity & Guaranty Co. v. Riefler, 239 U.S. 17 (1915)
United States Fidelity & Guaranty Co. v. Riefler, 239 U.S. 17 (1915)
United States Fidelity & Guaranty Co. v. Riefler, 239 U.S. 17 (1915)
17
36 S.Ct. 12
60 L.Ed. 121
The facts certified are simple. One Dooling, being required to give an official
bond, applied in Springfield, Illinois, to an agent of the plaintiff in error, a
bonding company having its home office in Baltimore, Maryland, was
informed that the company would become his surety only on condition that he
furnish indemnity, and was handed a printed form of indemnity bond. The
defendants in error, at Dooling's request, signed and sealed this bond for the
purposes therein expressed, and authorized Dooling to deliver it to the company
through its Springfield agent, which Dooling did. The agent, who is not shown
to have had authority to execute bonds, forwarded it for acceptance. The
company, relying upon it, became surety for Dooling. One of the recitals of the
bond was that the company 'has become or is about to become surety, at the
request of the said Frank E. Dooling, on a certain bond in the sum of Five
Thousand Two Hundred Dollars, wherein Frank E. Dooling is principal, as
If the bond in suit had been delivered directly to the company and had been
pronounced satisfactory there would have been no need to notify Riefler and
Hall of the company's subsequently executing the Dooling bond. Riefler and
Hall assumed an obligation in present words to indemnify the company against
an exactly identified suretyship that the company had gone or was about to go
into, as they stated. The company was about to go into it and went into it. If
Riefler and Hall had made only a parol offer in the same terms, the company,
by becoming surety, would have furnished the consideration that would have
converted the offer into a contract; but notice is held necessary in Davis Sewing
Mach. Co. v. Richards. If it had been a covenant, the company's act would have
satisfied the condition upon which the covenant applied. O'Brien v. Boland,
166 Mass. 481, 483, 44 N. E. 602. As it was a bond, the company's entering
into its undertaking in like manner furnished the subject-matter to which the
obligation by its terms applied. In the case of either covenant or bond there was
no need for notice that an event had happened that the defendants' contract
contemplated as sure to happen, if it had not already come to pass.
The only ground for hesitation is that seemingly the bond in suit might have
been rejected by the company as unsatisfactory, and that therefore it may be
argued that Riefler and Hall were entitled to notice that it had been accepted.
But we are of opinion that, in the circumstances of this case, it is reasonable to
understand that they took the risk. They were chargeable with notice that by
their act their bond had come to the hands of the company. The bond on its face
contemplated that the company would accept it and act upon it at once, and
disclosed the precise extent of the obligation assumed. It seems to us that when
such a bond, carrying, as a specialty does, its complete obligation with the
paper, is put by the obligors into the hands of the obligee, and in fact is
accepted by it, notice is not necessary that a condition subsequent to the
delivery, by which the obligee might have made it ineffectual, has not been
fulfilled. The contract is complete without the notice (Butler's Case, 3 Coke,
25, 26b; Xenos v. Wickham, L. R. 2 H. L. 296, 36 L. J. C. P. N. S. 313, 16 L.
T. N. S. 800, 16 Week. Rep. 38, 13 Eng. Rul. Cas. 422; Pollock, Contr. 8th ed.
7, 8), and we see no commercial reason why the principles ordinarily governing
contracts under seal should not be applied (Bird v. Washburn, burn, 10 Pick.
223). In Davis v. Wells, F. & Co. the guaranty was an open, continuing one up
to $10,000, but it was under seal, and was held binding, although additional
reasons were advanced.
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