_300 AMERICAN BONDING CO. V. BOARD ST. IMP. [187 DIST. No. 82. AMERICAN BONDING COMPANY V. BOARD OF STREET IMPROVEMENT DISTRICT No. 82. 4-2977 Opinion delivered April 17, 1933. DEPOSITARIES—STATUTORY BOND.—Depository bonds given by a bank to street improvement districts held statutory bonds, so that the statute should be read into them (Acts 1927, No. 182). 2. DEPOSITARIES—CONSTRUCTION OF BONDS.—Depository bonds must be construed like other contracts, and the court, if it can do so, must ascertain the intention of the parties. 3. DEPOSITMUES—CONSTRUCTION OF BONDS.—In arriving at the intention of the parties to a depository bond, the court may examine not only the bond itself, but also the statute and all facts connected with the making of the bond. 4. DEPOSITARIES—CONSTRUGTION OF BONDS.—The statutory bond required of a depository of the funds of an improvement district covers all the moneys and funds of the district which the depository has in its charge, including all funds deposited in the name of the district's collector.
ARK.] .AMERICAN BONMNG CO. v. BOARD ST. IMF. 301 DisT. No. 82. 5. DEPOSITARIES—FUN D S COVERED BY BOND.—The manner in which the funds of an improvement district were deposited in a depository bank did not affect,the rights or obligations of the surety on 'its bond if they were so deposited as to clearly . show that they were funds 'belonging to the district. • 6. tha p osITARIEs—coNSTRUCT I oN OF BOND.—All the provisions of a , depository bond must be construed most strongly against the • obligor who 'Prepared the bond. 7. PRINCIPAL AND SURETY—LIABILITY OF SURETY. — The liability of a surety is measured by the contract, and cannot be extended by 8. PRINCIPAL AND SURETY—LIABILITY OF SURETY.—A bond m'ade by a paid surety is construed most strongly against the sureiy, but it cannot impose burdens not- within its terms. Appeal from' Garland Circuit Court; Earl- Witt, Judge; affirmed. Horace Chamberlin, for appell-ant. Murp4 ict Wood, for appellee. MEHAFFY, J. •Street Improvement Districts Nos. 82 and 89 of Hot Springs, -Arkansas, were duly organized in 1926. , . In 1927 act 182 was passed, which was an act re-, quiring all imprdiTement districts in thiS State to require depositories of the funds of such improvement districts to give sUrety bonds for the full amount deposited. After the passage of this act, the Community Bank & Trust Company of Hot Springs, Arkansas, was designated as the depository of the funds of the districts. J. O. Lang-ley was president of . the CoMmunity Bank & Trust Company, and was collector of both districts. In 1927 the directors of each-district applied to the Community Bank & Trust . Company for a depository bond, and bonds were executed by . the 'bank with the I-nine Accident IDS -tirall e ' e CO±npany as surety. These bonds continnediriforce until:the insolvency Of the Home Accident Insurance Company -in 1930. In December, 1930; application was made to the American Bonding Company of BaltimOre, and on Deceniber 15, 1930, the Community Bank & Trust Company entered into-a bond, as required by statute, with the American Bonding Company of Baltimore as surety. Bond was made to each district. Each of the bonds provided, among other things, that "the condition of the obligation is such that, if the
302 AM.ERICAN-BOSTDING CO: -v.. BOARD ST. IMP. [187 DIST. No..82. above bounden principal-shall in due course pay, -on legal demand made during the term of this bond all suins of money which the principal shall be legally bound to pay, then this' obligation shall be void ;. otherwise of full force and effect." _ .,; • This is a statutory bond, and the statute is read into the bond. The statute provides that the bond shall be Conditioned fOr the' apt and' full and • coMplete Payment of all funds so dePosited; 'together with' the , interest thereon.. • .J. 0..Langley, who was president of the Community Bank & Trust Company and ,collector for -each district, also , made a bond with the American Bonding Company o'f'BaltiMore as suret V . . " The Community Bank & .Trust . Company, on Novem-ber 30, 1931, becaine insolvent and closed its doors. At that- time it had on depO'sit tO the credit of . Street Im-provenient DiStrict' NO. 82 the sura . of $294.98, and to the credit of J. -0. Langley aS 'collector of Street ImproVe-. ment District No. 82, $946.88. Street Improvement DiStrict . No. 89 had on dePosit to its credit $402.11, aml..J. 0. Langley, as Collecter of Street Ini.Provernent District No. 89; the smn. of $2,040.25.. Each of the districts . made demand upon the Amer-ican Bonding COmpany . for, the payment of the amounts deposited to their credit, and -also for the amounts de-. 13 9sited by J. 0. Langley as collector for each, of said districts. The American BoRding Company • admitted; liability for the amounts , deposited in the names of the districts, and offered to ' pay these sums in settlement of its liability under its bonds. The, districts refused..to accept thOe amounts, and . demanelea , that the bending coMPanY also pay the amounts inthenaMe of . J. 0. Lang, ley_ as collector of . the plistricts„ After. the ' demand was Made by the districts, the Bank Commissioner . paid a dividend, to all depesitors, and dividends were paid by theBank 'Commissioner on these four accounts. Both.districts brought suit in the Garland Circuit Court . against the appellant and the Bank Commissioner. District 82 did not bring a suit on its collector's bond, and, when the. dividends were paid, both districts
ARK _I AMERIOAN BONDING' CO: V. 'BOARD ST.. IM1 ;. 303 DIST. NO . 82. had Langley to aSsign his accOunts in the bank to them, andthe -dividends:due- Mr, Langley were . paid to • the -dis, triets: 'suit: was - brought; the -, 'biniding- eornpanY placed:the... amounts that Were : on depoSit in the-names of the:districts with the clerk;0f- the Garland Circuit Court: The 'appellant 'filed . answer . in each ca g e 'and -tendered the payments above mentioned; but 'contended that it was not liable for. the am - omits . .to the credit of the collector,. and in District No. 82 pleaded the collector's bond,'Which covers the exemption as to liability!shoWn • in said bond: . It also alleged that it was notliable to either district for the collectoes.deposits because they.were his funds . ; that• he was indebted to the diStrict, and the bank indebted te him. • After, .these. pleas were filed by the appellant, the complaints , were amended i .. .making Langley a party de--fendant, .andalleging.that he had no interest in the funds which he .had on deposit as collector of the districts: Langley entered his appearance,..filed answer,- in • which he alleged,thatie, had deposited the . money as an, officer . ot the.,districts,and, that he, .has no interest in -the .ac, counts, and . . ha,t, the . funds: belonged ,to the, several districts.. -:The , undisputed evidence, showed that the funds deposited- by Langley , as, collector belonged to the , . dis-id thai;Langley : had. no interest . in them. ! The ;cases, ; were consolidated . and tried together, and the court, sitting : as .a jury.by agreement; found. that. the funds to the credit of J. 0. Langley as collector belonged to the districts . ,..and . that he had -no - interest ..M.-said-ae-counts, except that he received and deposited said moneys as . collector of the yespective districts. , . JudgMent waS entered against the bonding . emnpany tdr all tour amountS. With 'interest, less 28, per cent which had 'been paid bY . the Bank ComMissiOner. • TheCase is here . on: 'aPpeal. ' ," " The- evidenee' n the. caSe -Was . an . a cr reed 'statenaent of facts ; the bohas ..arld. ` the- testimony: of . Judge :WOO and k. • E.. Steigler We ;46‘ dot *.deeni ' neCe'ssar detail: . . The only-... , questiOn: . 'for, Our ;Consideration iS Whether the bonds- given by -the .dePository as: principal and .the American- Bonding Company as surety covered the deposits in the nam „ e of . J. Q. Langley as collectOr ,of the -districts.
304 AMERICAN BONDING CO. v. BOARD ST; IMP. [187 DIST. No. 82. Bonds .are to be construed like other contracts; and it is the duty of the court, if it can do so, to ascertain the intention of the parties. In arriving at the.intention of the parties, where a statutory bond is given, it is proper to examine, not only the bond itself, but Me statute under which it is given, and all the facts and cireum-stances connected with the making of- the bond.. 'Etna Casualty & Surety Co. v. State, 174 Ark. 988, 298 S. W. 501. The bonds in this case recite : "Whereas the said Community Bank & Trust Company has been designated as a depository of funds of Street Improvement District No. 82, now therefore the condition of the above obligation is such that, if the above borinden principal shall in due course pay on legal demand made during the term of this bond all sums which the principal shall be legally bound to pay, etc." ; The bond given to District 89, is the Same as that given for District 52. The statute under which 'the bonds were given states : "All 'other . improyémerit distriCts of • this State, both rural arid urban, having in their Charie the moneys and funds of such districts shallbefore depositing same in any bank, trust company, saving g asso-: dation, or with any other person or company, re4iiire'of such depository a good and sufficient bond sigMed by , ome surety company authorized to do 'business' iri the State of Arkansas, conditioned f Or the apt and full:arid complete payment of all funds so deposited, tOgetber with the interest thereon." It will be seen -from an examination of the statute that it includes all moneys and funds of the districtiwhich the depository has in its charge. There can be no question but what the bank had in its charge the moneys deposited by the collector of the district, as the -Money of the district, and, reading the statute into the bond, the surety undertook to pay all funds so deposited, etc. That necessarily means an the funds in charge of tile depoSit tory bank belonging to the districts deposited in the name of the collector of the districts. The money might have been deposited by the treasurer, but it would then have been the funds of the districts, and, if deposited in the
- ARK.] AMERICAN_ BONDING CO: V. BOARD ST. ,IMP. 305 DisT. No. 82.. name of any. officer of the districts in such a-manner as to show that they were the funds of the districts, such funds would be covered by the terms of the bond. . The manner in which the hinds were -deposited in the bank did not in any way affect the rights or obligations of the surety, if they were , so deposited as to clearly show that- they were the funds belonging to the districts. Another familiar rule of construction is thatall the provisions of bonds or other contracts must be construed mOst strongly against the • obligor • who prepared the bonds, and in faVor of the beneficiary.' 2Etita Casualty Co. v. State, supra; Consolidated Indemnity Ins. Co. v. State use Craighead County, .184 , Ark. 581, 43 S. W. (2d) 240. • • The liability of a'Surety is measured by his contract, and: the liability 'cannot be extended by implication, but,a bOnd rrade by , a paid surety, as 'in this . case, ! is construed most strongly against the sureties, but, of coUrse, it must not impose burdens not within the terms .of the bond. Norton v. Md. Cas. Co., 182 Ark. 609, 32 S. W. (2d) 172 ; Consolidated Iudeninity s Ins. ' CO: V. 'State *u -Se Craig-, head County, 184 Ark. 581, 43 S: W. (2d) 240.- We think that, when the statute is read into the bond, the surety became liable for all-moneys deposited in the Conimunity Bank & Trust Company -belonging to the respective districts, and, if such moneys belonging to the districts were deposited in the :bank,- it was -not material whether such moneys were depositedin the name of the districts, or the name of-the: collector, or the naMe of the-treasurer, if they were so depoSited as to show that they. were the moneys-of the districts.. What the surety undertook to become liable for was -the moneys belonging to. these districts, which the principal had in charge. - There is no -reason why -the surety • should ribt be liable for all the funds that were deposited' in the bank belonging to -these-two districtS:-• - --The. judgment :of the- circuit court is -affirmed. .
You are being directed to the most recent version of the statute which may not be the version considered at the time of the judgment.