Pacific Automatic Device Co. v. United States Fidelity & Guaranty Co.
Opinion of the Court
On August 2, 1922, the Olympic Products Company, a Washington corporation, as manufacturer, entered into a contract with the Pacific Automatic Device Company, of Portland, an Oregon corporation, as purchaser, for the manufacture and sale of 25,000 automatic
The present action was brought by the purchaser against the surety alone on a contract which is thus described in the complaint :
“That between the 1st and 15th days of August in the year 1922 aforesaid Olympic Products Company and The United States Fidelity & Guaranty Company, the defendant herein, jointly and severally promised, covenanted and agreed in writing with the plaintiff that they, or one of them, would, and both should, but neither of them did, assemble all raw material and therefrom manufacture and deliver twenty-five thousand (25,000) automatic windshield swipes, to conform to the sample furnished by Pacific Automatic Device Company, of Portland, Or., in accordance with the specifications thereabout fully set forth therein and attached thereto and made a part thereof; that said swipes were known as the Brownie windshield swipe and when so delivered were to be packed separately in paper ear-ton boxes at the rate of one thousand (1,-000) swipes per week from and after the 2d day of October, 1922, for the sum of one dollar and 25/ioo ($1.25) each, with the privilege and option to increase the number of swipes to be furnished to one hundred thousand (100,000), upon and pursuant to which plaintiff was to advance, and did advance, certain and various sums of money which were received and accepted at the dates and times as hereinafter mentioned, but the said defendant did not, and Olympic Products Company did not make and deliver said swipes or any of them.”
The contract thus pleaded was denied by answer, and at the close of the testimony the court below directed a verdict for the defendant. The judgment on the verdict is now before us for review. It was conceded on the trial, and is conceded now,, that the present action was not on the bond. Indeed, this is manifest because the bond is in no wise referred to in the complaint. The theory of the case, as advanced by counsel for the plaintiff in error in his brief, is this:
“The theory of the action and foundation of legal liability was that a contract and bond had been executed and given together as one entire transaction constituting a joint and several primary obligation shown by the documents themselves and accompanied with the surrounding facts, circumstances, acts, and transactions of the parties between themselves with subsequent correspondence evidenced and established the liability of defendant in error jointly with its principal to the plaintiff in error to answer for and pay the pecuniary loss sustained by the plaintiff in error; and that this was the whole governing intention of the transaction and the gist of the action.”
But the record utterly fails to show that the defendant in error executed any contract, in writing or otherwise, such as is set forth in the complaint, or any contract of any kind, other than the indemnity bond to which we have referred, and the contention that a surety on such a bond becomes a party to the original contract between the principal and the obligee in the bond and assumes all obligations of that contract, regardless of the conditions, provisions, and limitations contained in the bond or indemnity contract, finds no support in reason or authority. The contract of the defendant in error was one of indemnity only, and the obligation it assumed must be measured by the terms of the indemnity contract to which it was a party, not by the terms of some other contract to which it was not a party. Of course, the question of liability on the bond is not before us; but it would seem entirely plain that the surety incurred no obligatiqn in any event beyond the penalty of the bond, and that a. breach of the conditions and provisions of the bond would release it unless waived.
For these reasons, the court below correctly ruled that there was a failure of proof, and its judgment is affirmed.
Reference
- Full Case Name
- PACIFIC AUTOMATIC DEVICE CO. v. UNITED STATES FIDELITY & GUARANTY CO.
- Cited By
- 3 cases
- Status
- Published