United States Fidelity & Guaranty Co. v. Iowa Telephone Co.

174 Iowa 476
CourtSupreme Court of Iowa
DecidedMarch 7, 1916
StatusPublished
Cited by28 cases

This text of 174 Iowa 476 (United States Fidelity & Guaranty Co. v. Iowa Telephone Co.) is published on Counsel Stack Legal Research, covering Supreme Court of Iowa primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
United States Fidelity & Guaranty Co. v. Iowa Telephone Co., 174 Iowa 476 (iowa 1916).

Opinion

Weaver, J.

1. Bonds: constraction: ambiguous connection of unambiguous tfonoi terms The facts in this' case are not in dispute. In the year 1903, the city of Ottumwa, by its mayor and council, adopted an ordinance designated in the record as Ordinance No. 633, regulating the use of its streets by telephone companies and requiring telephone wires to be laid underground. Among other things, it was therein provided that, before the laying sue^ wires should be begun, the company should make application to the council so to do, accompanied by plans and specifications of the'proposed improvement, and that, upon approval of the application by the council, the city engineer should issue the necessary permit. It also provided as follows :

“Section Y. In the location, construction or repair of any conduits, manhole, underground connection or distributing pole or excavation shall be necessarily made, placed or continued, and any excavation or obstruction made or placed [480]*480in any street, alley or public highway at any time or for any purpose by any such person, firm or corporation, shall be properly guarded, and any pavement, at any time or for any purpose whatever taken up or displaced by any such person, firm or corporation shall be properly and speedily replaced and put in proper order by it under the supervision of the city engineer; and the person, firm or corporation owning or using the same shall pay all damages for injuries to the person or property of any person, firm or corporation as well as to the city of Ottumwa, resulting from, occasioned by, or growing out of negligence or improper construction in the laying, constructing or repairing of such conduits, manholes, underground connections and distributing poles or the maintenance and use of same, and shall fully indemnify and save harmless the city of Ottumwa from and against all claims, actions or suits at law, or in equity of any kind or nature, for damages to persons or property, resulting from, occasioned by, or growing out of the construction, erection and maintenance of such conduits, poles, underground connections, manholes and wires, or the negligence or omission of said company, its servants, agents, or employes, to properly guard any excavation or obstruction at any time or for any purpose whatsoever made, placed or caused in any street, alley or public highway; or for the omission to properly and speedily replace and repave any opening or to keep such pavement in proper repair so far as said repair may be made necessary by the interference with said pavement caused by the location, construction, use or repair of such conduits, poles, wires, underground connections and manholes. If any such person, firm or corporation shall fail to repair any street, or alley damaged by excavations made by it after five days’ notice so to do, made in writing to its local office in said city, then the city shall make such repairs at the expense of such person, firm or corporation and before commencing any work under a permit issued by the city engineer under the provisions of Section III hereof, such person, firm or corporation shall file [481]*481with the city council a bond in such sum, not exceeding five thousand dollars, as such city council may fix, with a surety company authorized to do business in the state of Iowa, as surety, or with not less than two personal sureties, to be approved by the city council, conditioned that such company will restore, as required by this ordinance, the streets, alleys, and public places to be excavated under such permit, and pay all damages occasioned by the construction of such work. ’ ’

In May, 1904, the Iowa Telephone Company, owning a telephone system in the city, made written application for a permit under the terms of Ordinance No. 633, accompanied by the required plans and specifications. The application was approved in a resolution reading as follows:

“Resolution.
“Be it Resolved by the city council of the city of Ottumwa, Iowa, that the map and specifications of the proposed underground conduit system to be constructed as a part of the general telephone system in Ottumwa, Iowa, of the Iowa Telephone Company in pursuance of Ordinance No. 633, be and the same is approved and said company authorized to proceed with said improvements as shown therein, and the city engineer is authorized and directed to issue the necessary permit therefor in compliance with said ordinance upon its executing to the city a bond in the sum of $5,000 conditioned as in said ordinance provided and upon the approval thereof by the mayor.”

Thereupon, the telephone company, for the purpose of complying with the requirements of the city and to perfect its right to enter upon the work of laying the telephone wires as provided in the ordinance, made application to the United States Fidelity & Guaranty Company, plaintiff herein, to become surety upon its bond to the city, stating that the bond was to be gi ren as indemnity against damage that the tele[482]*482phone company “may cause through the placing of an underground conduit system for their telephones”. Attached to the application was a copy of the proposed bond, identical in its language with the bond thereafter executed, upon which this action is based. Thé application also contained the following clause:

“And in consideration of The United States Fidelity and Guaranty Company consenting or agreeing to execute or guarantee the bond herein applied for, we do hereby covenant, promise and agree to pay the following premium or fees agreed upon, to wit, Fifty & No/100 Dollars per annum, and at the termination of the case to furnish said company with satisfactory and conclusive evidence that there 'is no further liability on said bond, and to indemnify, and keep indemnified, the said company from and against any loss, cost, charges, suits, damages, counsel fees and expenses of whatever kind or nature which said company shall or may for any cause at any time, sustain, or incur, or be put to, for, or by reason or in consequence of said company having entered into or executed said bond. ’ ’

This application having been accepted by the plaintiff, the bond was executed and, upon presentation thereof to the city council, was duly approved. The bond is entitled, “Bond to comply with Ordinance No. 633,” and is in the following words:

“Know All Men By These Presents, that we, the Iowa Telephone Company as principal and the United States Fidelity & Guaranty Co., of Baltimore, Md., as surety, are held and firmly bound unto the city of Ottumwa, Iowa, in the penal sum of $5,000, well and truly to be paid at Ottumwa, Iowa, we bind -ourselves, our heirs, executors, administrator and assigns by these presents.
“The conditions of this obligation is such, that whereas, the said Iowa Telephone Co. is about to place a part of its lines underground in the city of Ottumwa, Iowa, in pursuance of Ordinance No. 633 in relation thereto under the direction [483]*483of the city engineer and by permission of the city council which has fixed the bond required by said company under the provisions of said ordinance, at $5,000.
“Now, if the said Iowa Telephone Company shall and will in all respects comply strictly with the provisions of the said Ordinance No.

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Bluebook (online)
174 Iowa 476, Counsel Stack Legal Research, https://law.counselstack.com/opinion/united-states-fidelity-guaranty-co-v-iowa-telephone-co-iowa-1916.