Crawford v. Ozark Insurance

Wood, J., (after stating the facts). The only question is: were appellees liable under the following clause of their bond, towít: they “shall promptly pay all claims arising and accruing to any person or persons, by virtue of any policy issued by said company, during the term of this bond upon any property situated in the State of Arkansas when the same shall become due?” In the recent case of American Insurance Company v. Haynie, 91 Ark. 43, w.e held (quoting syllabus) : “The liability of sureties of insurance companies under the act of April 24, 1905, is that the company shall promptly pay all claims arising and accruing to any person or persons during the term of their bond, regardless of whether the policies under which such claims arise were issued during the life of the bond or not.” Section 4348 of Kirby’s Digest provides that the bonds of mutual fire insurance companies shall be renewed every two. years. There is nothing in the Acts of 1905, p. 489, inconsistent with the above provision; nothing repealing it. Section 4339, Kirby’s Digest, providing for the renewal of bonds annually, especially provides that “this is not to apply to'assessment companies as provided in sections 4347 and 4348.” Therefore the bond of appellees executed February 28, 1906, was in force till February 28, 1908. Hence the loss of appellant, which occurred April 15, 1907, was during the term of the bond. Appellees contend that the policy itself must have been issued during the term of the bond; that "the express language of the bond excluded losses that occurred during the life of the bond, on policies that were issued before the bond was exectued. In other words, appellees contend that, by the express language of the bond, unless the policy was issued during the term of the bond, ithe sureties were not liable for a loss that occurred during such term. We must presume that it was the intention of the bondsmen to execute the bond in compliance with the requirements of the statute; and, unless it would be doing violence to the language of the bond itself, it is our duty to so hold. United States Fidelity & Guaranty Co. v. Fultz, 76 Ark. 415; 5 Cyc. p. 755, note 56; lb. 751, 2 and 756, and note. Statutory bonds executed in the form prescribed by the statute must be construed as though the statute were written in them, as respects the rights of principal and surety. Zellars v. National Surety Co., 108 S. W. 548. The clause of the bond under consideration should be construed and read as follows: shall promptly pay all claims arising and accruing to any person or persons during the term of this bond, by virtue of any policy issued by said company, upon any property situated in the State of Arkansas, when same shall become due. This arrangement is according to the punctuation and grammatical construction; and, while punctuation should not control, neither should it be ignored, in considering what the makers of the instrument meant by the language employed. The comma after “persons” and “company” shows that the phrase, “by virtue of any policy issued by said company,” is parenthetical. Their effect is to make the prepositional phrase, “during the terms of this bond,” relate to and qualify the participle “accruing,” and not the verb “issued.” When thus ‘construed, the bond conforms to the law as interpreted in American Insurance Company v. Haney, supra, by which this case is ruled. The judgment is therefore reversed, and judgment, is entered here in favor of appellant against appellees in the sum of $960 with interest.