An instrument agreeing to indemnify a bond company for giving an
official bond, signed and sealed and delivered to the officer to be
bonded with authority to deliver it to the bonding company, and
which was so delivered and was relied upon by the bonding company
in issuing its bond, held,
in this case, to have been a
completed contract on the delivery thereof to the bonding company
which was not required to notify the parties thereto of its
The facts, which involve the liability of defendants on a bond
of indemnity to a surety company, are stated in the opinion.
Page 239 U. S. 23
MR. JUSTICE HOLMES delivered the opinion of the Court.
The facts certified are simple. One Dooling, being required to
give an official bond, applied in Springfield, Illinois, to an
agent of the plaintiff in error, a bonding company having its home
office in Baltimore, Maryland, was informed that the company would
become his surety only on condition that he furnish indemnity, and
was handed a printed form of indemnity bond. The defendants in
error, at Dooling's request, signed and sealed this bond for the
purposes therein expressed, and authorized Dooling to deliver it to
the company through its Springfield agent, which Dooling did. The
agent, who is not shown to have had authority to execute bonds,
forwarded it for acceptance. The company, relying upon it, became
surety for Dooling. One of the recitals of the bond was that the
"has become or is about to become surety at the request of the
said Frank E. Dooling, on a certain bond in the sum of Five
Thousand Two Hundred Dollars, wherein Frank E. Dooling is
principal, as Recorder of Springfield District Court No. 25, Court
of Honor, located at Springfield, Illinois, a copy of which bond is
hereto attached No. 52012-5, which bond is made a part hereof."
The condition was that Dooling should keep the company
indemnified for all loss by reason of its suretyship. A copy of the
company's bond was not attached, and, at the date of the indemnity,
bond had not been executed. Dooling was not a party to the
indemnity bond. The defendants in error received no pecuniary
consideration for their act, and were not notified of the
acceptance of their bond or of the execution of the other by the
company. The questions propounded are:
Page 239 U. S. 24
"(1) Was the instrument which was signed by Riefler and Hall,
and relied on by the company a completed contract of indemnity or
guaranty? (2) Or was it merely an offer to become indemnitors or
guarantors, requiring notice of acceptance by the company, in
accordance with Davis v. Wells, 104 U. S.
, and Davis Sewing Mach. Co. v. Richards,
115 U. S.
? (3) And, if in substance the instrument was merely
an offer, does the fact that it was in the form of a bond under
seal take it out of the rule of those authorities?"
If the bond in suit had been delivered directly to the company
and had been pronounced satisfactory, there would have been no need
to notify Riefler and Hall of the company's subsequently executing
the Dooling bond. Riefler and Hall assumed an obligation in present
words to indemnify the company against an exactly identified
suretyship that the company had gone or was about to go into, as
they stated. The company was about to go into it and went into it.
If Riefler and Hall had made only a parol offer in the same terms,
the company, by becoming surety, would have furnished the
consideration that would have converted the offer into a contract;
but notice is held necessary in Davis Sewing Mach. Co. v.
If it had been a covenant, the company's act would
have satisfied the condition upon which the covenant applied.
O'Brien v. Boland,
166 Mass. 481, 483. As it was a bond,
the company's entering into its undertaking in like manner
furnished the subject matter to which the obligation, by its terms,
applied. In the case of either covenant or bond, there was no need
for notice that an event had happened that the defendants' contract
contemplated as sure to happen, if it had not already come to
The only ground for hesitation is that seemingly the bond in
suit might have been rejected by the company as unsatisfactory, and
that therefore it may be argued
Page 239 U. S. 25
that Riefler and Hall were entitled to notice that it had been
accepted. But we are of opinion that, in the circumstances of this
case, it is reasonable to understand that they took the risk. They
were chargeable with notice that, by their act, their bond had come
to the hands of the company. The bond on its face contemplated that
the company would accept it and act upon it at once, and disclosed
the precise extent of the obligation assumed. It seems to us that,
when such a bond, carrying, as a specialty does, its complete
obligation with the paper, is put by the obligors into the hands of
the obligee, and in fact is accepted by it, notice is not necessary
that a condition subsequent to the delivery, by which the obligee
might have made it ineffectual, has not been fulfilled. The
contract is complete without the notice, Butler & Baker's
3 Co.Rep. 25, 26b; Xenos v. Wickham,
H.L. 296; Pollock, Contracts, 8th ed., 7, 8, and we see no
commercial reason why the principles ordinarily governing contracts
under seal should not be applied. Bird v. Washburn,
Pick. 223. In Davis v. Wells, supra,
the guaranty was an
open, continuing one up to $10,000, but it was under seal, and was
held binding, although additional reasons were advanced.
We answer the first question: Yes.
MR. JUSTICE McKENNA dissents.