ous of the surety because he was powerless to protect himself. He is favored above other debtors.10 What is said of the surety applies equally to the technical guarantor.11 And it is immaterial whether the question arises at law or in equity, the surety or guarantor remains a favored person.12 While this solicitude for the gratuitous guarantor and surety is recognized, it does not begin until after the instrument has been construed.18 In the interpretation of the language of the 10 It was said in State v. Churchill (1887) 48 Ark. 426, 442, 3 S. W. 352, 359, that "A surety is everywhere in law a favored debtor. He is moreover a necessity in many of the most important business transactions of life, both public and pri vate, and the policy of the law is that he should be favored more than other debtors, since he is, or may be to a certain extent, powerless to protect himself." Compare Robinson v. Epping (1888) 24 Fla. 237, 4 So. 812, 822. 11 Graham v. Farmers' & Merchants' Bk. (1897) 116 Cal. 463, 48 Pac. 384. In the opinion in Kingsbury v. Westfall (1875) 61 N. Y. 356, 360, it was said: "It is now too well settled to admit of a doubt, that a guarantor, like a surety, is bound only by 'the strict letter or precise terms' of the contract of his principal, whose performance of it he has guaranteed, that he is in this respect a favorite of the law,' and that a claim against him is strictissimi juris.” 12 Chief Justice Kent said in Ludlow v. Simond (1805) 2 Caines (N. Y.) 1, 57, 17 Am. Dec. 609: "It is a well-settled rule, both at law and in equity, that a surety is not to be held beyond the precise terms of his contract, and, except in certain cases of accident, mistake or fraud, a court of equity will never lend its aid to fix a surety beyond what he is fairly bound to, at law." 18"While the law undoubtedly is, that a contract of suretyship is strictissimi juris, yet this rule relates to the application of the contract after it has been construed, and not to the construction itself. The contract is to be construed by the same rules that all other contracts are. .. But when this has been done, no acts of the principal that might operate against him in an action on the contract can be put in evidence against the surety, unless he has done some act that helps to practically construe the contract."' Stevens v. Partridge (1899) 88 Ill. App. 665, 671. . . It is quite true that in one sense the contract of a surety is strictissimi juris, and it is not to be extended beyond the express terms in which it is expressed. This rule, however, is not a rule of construction of a contract, but a rule of application of the contract after the construction of it has been ascertained. Where the question is as to the meaning of the language of the contract, there is no difference between the contract of the surety and that of anybody else. . . . In the case of a surety, as in the case of anybody else, when it becomes necessary to construe the contract the usual rules are to be used, and it is to be interpreted like any other paper." Gamble v. Cuneo (1897) 21 contract, whether the surety be compensated or not, no different tests are applied than in construing any other agreement.14 There is no practical difference between the interpretation of a contract of an individual and a compensated surety, where the language used is that of the surety. That ambiguities of expres sion by the gratuitous guarantor were to be most strongly construed against him a century ago is apparent from an opinion of Chief Justice Tindal, who said: The words employed are the words of the de fendant in this cause, and there is no reason for putting on a guaranty a construction different from that which the App. Div. 413, 414-15, 47 N. Y. Supp. 548, aff'd (1900) 162 N. Y. 634, 57 N. E. 1110. See also, Ulster County Savings Inst. V. Young (1899) 161 N. Y. 23, 55 N. E. 483; Brandt, Suretyship (1905, 2d Ed.) Sec. 107. 14"In interpreting the terms of a contract of suretyship, the same rules will be observed as in the case of other contracts."' Dolese Co. v. Chaney & Rickard (1915) 44 Okla. 745, 749, 145 Pac. 1119, 1120. "Defendants rely upon the general maxim that upon a bond of indemnity or guaranty the liability of the surety is strictissimi juris. Such is the statement often found in the books. This does not, however, mean that rules of construction of such a contract are different from those applicable to written instruments generally. What is meant by the maxim is that, when the meaning of a contract of indemnity or guaranty has once been judicially determined under the rule of reasonable construction applicable to all written contracts, then the liability of the surety, under his contract, as thus interpreted or construed, is not to be extended beyond its strict meaning.'' Covey v. Schiesswohl (1911) 50 Colo. 68-69, 114 Pac. 292. "It is the law that a surety has the right to stand on the strict terms of his agreement, but that his agreement is to be determined by the same canons of interpretation applied to other contracts, without technical nicety or strained distinctions. If this doctrine is applied to gratuitous sureties, it may certainly be applied to a company whose business is to become surety for hire." Fairbank Co. v. American Bonding & Trust Co. (1902) 97 Mo. App. 205, 212, 70 S. W. 1096, 1097. court puts on any other instrument. With regard to other instruments the rule is, that if the party executing them leaves any thing ambiguous in his expressions, such ambiguity must be taken most strongly against himself." 15 The language of agreements by corporate sureties usually being that of the surety will be construed in favor of the obligee and against the surety in the event of doubt.16 § 230. Strictissimi juris inapplicable to contracts of the compensated surety. After testing the agreement by the rules 15 Hargrave v. Smee (1829) 6 Bing. 244, 130 Eng. Rep. Reprint 1274, 1276. In the same case, Park, J., said: "The only question of principle which has been agitated on the present occasion is, whether these instruments are to be construed strictly; and I am not disposed to hold the doctrine which has been imputed to Lord Wynford, that a guaranty ought to receive strict construction."' The most recent cases follow the same view. See the opinion by the Springfield, Missouri, Court of Appeals, National Union Fire Ins. Co. v. Nevils et al. (1925) 217 Mo. App. 630, 274 S. W. 503, 506, that "the contract of a voluntary surety is to be construed by the same rules as all other contracts, and the language used is to be given its ordinary meaning with a view to carry out the intention of the parties as expressed in the instrument executed by them. There should be no strained construction in order to release or hold the sureties.''' 16"The language of the bond is that selected by the insurer and must be given the strongest interpretation which it will reasonably bear in favor of the insured." Federal Union Surety Co. V. McGuire (1914) 111 Ark. 373, 163 S. W. 1171, 1173. In its opinion in American Surety Co. v. Pauly (1898) 170 U. S. 133, 144, 42 L. Ed. 977, 18 Sup. Ct. 552, the Supreme Court of the United States thus expressed the rule: "If, looking at all its provisions, the bond is fairly and reasonably susceptible of two constructions, one favorable to the bank and the other favorable to the Surety Company, the former, if consistent with the objects for which the bond was given, must be adopted, and this for the reason that the instrument which the court is invited to interpret was drawn by the attorneys, officers or agents of the Surety Company. This is a well established rule in the law of insurance."' See United States Fidelity and Guaranty Co. v. Golden Pressed and Fire Brick Co. (1903) 191 U. S. 416, 24 Sup. Ct. 142, 48 L. Ed. 242; Gilmore and P. Railroad Co. v. United States Fidelity and Guaranty Co. (1913) 208 Fed. 277, 279, 125 C. C. A. 477; United States v. Bayly (1912) 39 App. D. C. 105, 41 L. R. A. (N. S.) 422, 428; United States Fidelity and Guaranty Co. v. Poetker (1913) 180 Ind. 255, 102 N. E. 372, L. R. A. 1917-B, 984. applicable to the interpretation of ordinary contracts, the law does not apply the principle strictissimi juris as in the case of the gratuitous guarantor if it be determined to be one for compensation. Thereafter in considering the liability of the surety, the ambiguities and lack of clarity will be construed so as to benefit the promisee.17 Without express agreement, however, the surety will not be held liable for losses caused by the principal debtor prior to the making of the suretyship contract.18 17 And if the terms of the contract are susceptible of two constructions, that one should be adopted, if consistent with the purpose to be accomplished, which is most favorable to the beneficiary." Royal Indemnity Co. v. Northern Ohio Granite and Stone Co. (1919) 100 Oh. St. 373, 126 N. E. 405, 406, 12 A. L. R. 378. See Hileman and Gindt v. Faus et al. (1916) 178 Ia. 644, 158 N. W. 597; Brown v. Title Guaranty and Surety Co. (1911) 232 Pa. 337, 81 Atl. 410, 38 L. R. A. (N. S.) 698; Remington v. Fidelity and Deposit Co. (1902) 27 Wash. 429, 67 Pac. 989; Costello v. Bridges (1914) 81 Wash 192, 142 Pac. 687, L. R. A. 1915-A, 853; Board of Commissioners of County of Ohio v. Clemens et al. (1919) 85 W. Va. 11, 100 S. E. 680, 7 A. L. R. 373; (1926) 35 Yale Law Journal 484; (1926) 10 Minnesota Law Re view, p. 629. In the note following the report of the Ohio case above quoted, in 12 A. L. R. 382, it is said the rule of construction stated in the text is recognized in all jurisdictions except Texas, where the court in Lonergan et al. v. San Antonio Loan and Trust Co. (1907) 101 Texas 77, 104 S. W. 1061, 22 L. R. A. (N. S.) 364, 372, 130 A. S. R. 803, said: "How it could be that receiving compensation by the surety would affect the relation between the surety on the bond and the owner of the building has not been suggested by counsel and is not apparent to us."' This position was reaffirmed by the same court in Hess and Skinner Engineering Co. et al. v. Turney et al. (1919) 110 Texas 148, 216 S. W. 621, 622, where, just prior to the citation of the above case, it said: "We do not agree with the intimation in the opinion of the Court of Civil Appeals that the rules which determine the rights of uncompensated sureties have no application in determining the rights of corporation sureties, who enter into contracts of suretyship for profit." See General Bonding and Casualty Insurance Co. V. Waples Lumber Co. (1915) Court Civil Appeals, 176 S. W. 651; Southern Surety Co. v. Klein (1926) Court Civil Appeals, 278 S. W. 527. We find as late as 1911 in 24 Harvard Law Review 568, the statement that: "In view of the comparatively recent origin of this business, the decisions are few which show more than a general tendency to treat the bond or policy of a surety company as subject to different rules than those governing the contract of a private surety. Yet in several important respects this tendency is very marked.'' 18 Dorsey v. Fidelity & Casualty Co. (1896) 98 Ga. 456, 25 S. E. 521. 13 So intrenched in the public policy has become this rule that the construction shall be against the compensated surety that the parties cannot by agreement change it. The Pennsylvania Supreme Court declared its view in the following language: 66 True, this bond contains the provision that it 'shall be construed strictly as one of suretyship only'; but in this Commonwealth, as part of its declared public policy, bonds of the character of that here sued upon, which are given for a consideration, are to be so construed as to protect the obligee, and the language above quoted does not prevent our treating it as a 'suretyship' for profit, in accordance with the fact, even if this surety company of another state, coming into Pennsylvania to do business under our law, were permitted, which of course it would not be, to stipulate that its obligation here shall mean other than our law determines it shall mean. 19 § 231. Agreement that amount paid to obligee is conclusive of the amount of indemnity recoverable against principal. Some courts have also held that an agreement between the principal and surety that the voucher of payment by the surety to the obligee shall be conclusive evidence against the principal as to the fact and extent of his liability is void as against public policy. A person cannot waive the protection which the law affords. The surety cannot, by his ex parte acts, conclusively determine his own cause of action. The courts cannot have rules of law prescribed by act of the parties.20 About an equal number of courts have held such an agreement to be valid, especially where there is no evidence of fraud by the indemnity company.21 The first view tends to prevent the possibility of collu 19 M. E. Church v. Equitable S. Co. (1921) 269 Pa. 411, 415-16, 112 Atl. 551, 552. 20 Fidelity and Casualty Co. of N. Y. v. Eikhoff (1895) 63 Minn. 170, 65 N. W. 351, 30 L. R. A. 586, 56 A. S. R. 464; Fidelity and Casualty Co. of N. Y. v. Crays (1899) 76 Minn. 450, 79 N. W. 531; Fidelity and Deposit Co. of Maryland v. Nordmarken (1915) 32 N. Dak. 19, 155 N. W. 669; Guaranty Co. of North America v. Charles (1912) 92 S. C. 282, 75 S. E. 387. 21 London Tramways Co. Ltd. v. Bailey (1877) 3 Q. B. Div. 217; American Bonding Co. of Baltimore v. Alcatraz Construction Co. (1913) 202 Fed. 483, 123 C. C. A. 225; United States Fidelity and Guaranty Co. v. Baker et al. (1918) 136 Ark. 227, 206 S. W. 314; Guarantee |