_ 488- IlinuE INSURANCE_ COMPANY 'V. BOYCE. [188 HOME INSURANCE COMPANY 'V. BOYCE. 4-3258 Opinion delivered December 18, 1933. 1. PRINCIPAL AND SURETY—FIDELITY BOND.—A fidelity, bond must be construed like any other contract, and the' surety's liability is to be determined from the language of the bond where it is not ambiguous. 2., INSURANCE—AGENT'S FIDELITY BOND.—Sureties on an agent's fidelity bond held liable for sums due from the agent to the insurance company during the life of . the bond, regardless of whether the amount became due because of policies iSsued before or after execution of the bond. Appeal from Sharp Chancery Court ; A. S. Irby, Chancellor ; reversed. - • W. K. Ruddell, for appellant. D. L. King and Gus Causbie, for appellee. -IUTLER, J. E. A. Boyce, the appellee, began to work for the appellant company as- its agent about the year 1921. The business of the appellant was writing fire -insurance; and-the appellee- represented it ' in- several counties. On the 25th day of October, 1929, the appellant required the appellee to give bond, upon which the other appellees in this case became sureties. Boyce continued as the agent of the appellant mitil November 8, 1930, when he entered into a contract with Cuthbert Pickren, by . which Pickren took over his business as insurance agent, and became obligated to -perform serv-
ARK.] HOME INSURANCE COMPANY V. BOYCE. , 489 ices as such for. the appellant on the same terms and conditions as Boyce had previously worked, and by which contract Boyce was relieved from all liability under policies which had •een written after the date of his contract with Pickren. •It is conceded that this contract was made with the assent of the appellant, and that from then on the liability of the sureties on the bond of Boyce was terminated. , The appellant brought this suit ,on November 20, 1931, alleging that Boyce was due it, under . the terms ; of his contract, the sum of $2,100, and that the .sureties on his bond were ;liable therefor. in the sum of $1,000, that being the amount named in the bond for which they might be liable ,because of the default of Boyce. It al7. leged that the account was complicated, running over -a period of years, and prayed that a master . be appointed to state the .account, and that it have judgment aga:inst Boyce in the . sum alleged to be due, and judgment against the bondsmen in the sum of $1,000. A master was appointed, testimony .was taken, and an account was stated by the master in which he found that there was due the appellant from Boyce the sum of $1,663.80, of which amount the bondsmen were liable in the sum of $70.36, on ; the theory that the bond was. only liable for sums collected by the, agent on policies issued after , its date. , The.court approved 'the finding of fact of the master, , and his Conclusions of law, and, among other things, decreed that "the bond is not liable:-for any policies written : before the bond was given, although the notes matured and were not ; paid until after bond was given, and the agent became liable by reason of the notes maturing and not being paid after the bond was written." It Is- our opinion that the. question presented is whether or not the declaration of. law ahove quoted is correct. It is well settled that bondS must be construed like any other contract, and the liability of the sureties is to be determined from the language of the bond alone„ where the same is not ambiguous. The obligation of the bond pertinent to the questift. involved is, that the principal "shall duly and properly account. for, and pay over to . the said company, all premiums, premium ; notes
-490 HOME INSURANCE -COMPANY V. ROYCE. [188 And proceeds of such notes coming into his or their hands On o . r for policies of insurance, and shall Pay back to the said company the commission And fees advanced to him, or them, by the said company on all notes which are not paid at maturity ; and shall also refund- to the said company the unearried commissions on . the 'premiums returned under cancelled policies ; and all'moneys _of the company which may at any time come into his or their hands, or pass under his or their control, from any source whatsoever." It will be observed that the liability is predicated, not upon the date when any given policy might have been written, but upon the fact that the principal should account to the company for moneys coming into his hands due the company at the time they were received, or for commissions and fees advanced on notes where the same were not paid at maturity, and for unearned Commissions on premiums returned where • policies had ,been cancelled. We are -of the -opinion, therefore, that •the -court erroneously construed the bond; and that the‘ of the' sureties depends On whether or not the money dile the company came into , the hands of 'the a-gent, or fees advanced . on notes were due to be'-returned because the notes were not paid at maturity, and unearned commissions were due to be refunded ori cancelled pOlicies within the time between the execution of the bond and the date the Sureties were relieved from any further liability by reason of, the contract:made with Pickren, without respect to the date of the' policies; as it would be immaterial whether they were issued before or after . the date of the execution of the bond.. The judgment, of the trial court will therefore be reversed, and _the Cause remanded with direCtions to ascertain what notes, if any,. came into the hands of the -agent within the dates last- above mentioned, and it is decreed that such as' are still within his hands, if any, - be delivered to the appellant company; also, to ascertain what commissions and fees the company advanced •o appellee within said daes on notes which were not paid; also, the amount of _the _ unearned commissions on pre- miums, if any, returned tcr policyholders by reason of
cancellation of policies, and such other moneys as may be found . to have come, into the hands of the principal belonging to the appellant company during the life of the bond; and to render judgment against the. principal and the sureties for such of said items as have not been paid by the principal, the liability of the sureties in no event to . be more than the amount stipulated in the bond.
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.