Strawbridge v. Baltimore & Ohio Rail Road

Bartol, J., delivered the opinion of this court. Just prior to the 9th of April 1853, Isaac S. Strawbridge, one of the appellants, was appointed “ticket and freight agent of the Baltimore and Ohio Rail Road Company, at Ellicotls Mills.” On the 9th of April 1853, he and the other appellants executed and delivered to the rail road company the bond upon which this action was instituted. The penalty of the bond is $3,000; and after a short recital of the fact that Strawbridge had been “appointed by the said company, as ticket and freight agent at Ellicotts Mills,” the condition is stated in these words: “that if the said Isaac S. Strawbridge do not at all times hereafter, so long as he shall hold said office, well and faithfully perform the duties of the said office, so that the said company shall suffer no loss, damage or injury on account of any act or acts, either of omission or commission of the said IsaacS. Strawbridge, and without wasting, embezzling, spending, or unlawfully making way with [366] the money, property, or effects of the said company, or such as may come into his hands, or under his control, while holding the office aforesaid, then, if the said Isaac S. Strawbridge, Thomas McCrea, John Collier, or Thomas Jenkins, or either of them, or their, or either of their heirs, executors or administrators, shall make due and sufficient recompense unto the said company for such loss, damage or injury, wasting, embezzling, spending, misapplying or unlawfully making way, then this obligation to be void—else in full force.” Strawbridge held the situation of “ticket and freight agent at Ellicotts Mills,” from the date of his appointment, up to the 21st July 1856. At the last named date, there was due to the rail road company by Strawbridge, for passenger tickets sold by him at Ellicotts Mills, and for freights received by him at the same place, the sums, for which with interest thereon, the appellees recovered judgment in the court below. After the execution and delivery of the bond, (in the month of December 1854,) the rail road company made Ellicotts Mills a first class station, it having previously been a second class station. At the first class • stations a greater amount of freight is paid, than at the second class stations; the duties of the ticket and freight agent are the same at both, viz: to receive all sums payable at his station for both freight and passengers. The appellants contend that the change in the regulations of the company, by which Ellicotts Mills was made a first class station, worked a discharge of the sureties from the obligation of their bond; because in consequence of that change Straw-bridge, the ticket ’and freight agent, received a much larger amount of money than he would otherwise have done. It is well settled that “the liability of a surety is not to be extended by implication beyond the terms of his contract.” 9 Wheaton, 703, 2 N. R. (5 Bos. & Pull.,) 180. 12 East., 405. It is equally well settled that “any dealings with the principal debtor, by the creditor, which amount to a departure from the contract by which a surety is to be bound, and which by possibility might materially vary or enlarge the latter’s lia [367] bility, without his assent, discharges the surety.” 5 Md. Rep., 110. 6 G. & J., 247. The application of these principles to the present case must depend upon the true construction of the bond. In the recital it is declared that the principal obligor “was appointed ticket and freight agent of the Baltimore and Ohio Rail Road Company at Ellicotts Mills,” and by the condition, the sureties bound themselves for the faithful performance by him of the duties of the said office, so long as he should hold the same. The liability under the bond to the extent of the penalty is for the officer generally as ticket, and freight agent at Ellicotts Mills, without reference to the fact, whether that was a second class or a first class station. In Burge on Suretyship, 54, the author speaking of the liability of a surety says: “He will be liable to the full extent which the terms of the obligation, or the nature of the act for which he has obliged himself, will warrant. Thus, if the terms are general and indefinite, he is bound for all the obligations of the principal debtor necessarily incident to, or resulting from, the contract or act for which he has become surety. In this case he is said to be a surety in omnem causarn. ’ ’ In construing this bond regard must be had to the intention of the parties when it was executed. In Metcalf vs. Bruin, 12 East., 408, Mr. Justice Bailey said: “This bond must have such a construction as the parties meant it to have at the time they entered into it. ” The same thing was said by the Court of Appeals in the case of the Union Bank vs. Ridgely, 1 H. & G., 433, and in Hurlstone on Bonds, 32, (9 Law Lab.,) it is said: “The nature of the duty of the obligor, and character of the obligee, will be regarded as explanatory of the intent of the parties.” Mayor of Berwick vs. Oswald, 72 Eng. C. L. Rep., 295, in the Queens Bench and the same case in the Exchequer Chamber, 77, Eng. C. L. Rep., 653. Looking at the nature of the office held by Strawbridge, and the extent, objects and powers of the corporation, we have no doubt that the bond was intended to cover the whole defalcation charged against the agent in this case. The nature of his duties was not changed, no new or dif [368] ferent duty was imposed upon him by (he alteration in the regulations of the company, making Ellicotts Mills a first class station. He was still to receive money for passengers and freights at the same place. The whole effect of the alteration was to make more freights payable at that point than formerly. In Minor and others, vs. The Mechanics Bank of Alexandria, 1 Peters, 46, which was a suit on the official bond of a cashier, the court said, (page 73:) “The bond of the cashier must be construed to cover all defaults in duty, which are annexed to the office, from time to time, by those who are authorized to control the. affairs of the bank, and sureties are presumed to enter into the contract, with reference to the rights and authority of the president and directors under the charter and by-laws.” The condition of the bond was for the' faithful execution of the duties of cashier, and it was held responsible for the default of the cashier in net discharging certain duties which had been before performed by the teller,, and usually belonged to that office. It is true, in that case, the by-laws pointing out the duties of the cashier provided, “that he shall do and perform all other duties that may from time to time be required of him by the president or board of directors relative to the affairs of the institution,” and there was a resolution of the board, passed before the cashier’s appointment, which devolved upon him the duties of teller. The authority is therefore not in all respects applicable tO' the case before us. But the language cited from the court’s-opinion expresses the true rule by which this contract must be governed. It is indispensably necessary for such a corporation as the appellees, “in order to carry on successfully their vast, and complicated business operations,” to make changes from time to time in their regulations, to alter their time tables, the rates of charges for passengers and freight, the points for receiving or delivering merchandize, and the manner, terms and places of receiving freights, &c. Such powers are conferred by the charter, and the appellants in executing their bond, must be construed as contracting with the company, “with reference to [369] their rights and authority,” in the management and regulation of such matters. It follows, from what we have said, that in our opinion the prayer of the plaintiff was properly-granted, and those offered by the defendant were properly refused by the Circuit court. (Decided July 15th, 1859.) Judgment affirmed.