Brown v. Title Guaranty & Surety Co.

Citations

• 232 Pa. 337
• 81 A. 410
• 1911 Pa. LEXIS 722

Syllabus

<p>Principal and surety — Contracts—Surety company — Construction— Eminent domain — Land damages — Railroads—Conveyance of fee.</p> <p>1. The trend of all our modern decisions, federal and state, is to distinguish between individual and corporate suretyship where the latter is an undertaking for money consideration by a compány chartered for the conduct of such business. In the one ease the rule of strictissimi juris continues to prevail; with respect to the other, because it is essentially an insurance against risk, underwritten for a money consideration by a corporation adopting such business for its own profit, the courts generally hold that such a company can be relieved from its obligation of suretyship only where a departure from the contract is shown to be a material variance. The doctrine that a surety is a favorite of the law, and that a claim against him is strietissimi juris does not apply where the bond or undertaking is executed upon a consideration by a corporation organized to make such bonds or undertakings for profit. While such corporations may call themselves “surety companies” their business is in all essential particulars that of insurance. Their contracts are usually in the terms prescribed by themselves, and should be construed most strictly in favor of the obligee.</p> <p>2. Land taken from an owner under the right of eminent domain for railroad purposes has no further practical value to the owner, in view of the rights of the railroad company in it and over it, and therefore, though only an easement is taken for the public use, no deduction is made, in practice, in the assessment of damages, for the reversionary right.</p> <p>3. Where a surety company enters into a contract of suretyship with a landowner to secure tbe payment to him of damages resulting from the. taking of his land by a railroad under right of eminent domain,the contract stipulating that the surety company would pay him, if the railroad did not, the amount of damages to whic