Also known as: fidejussors · fidejussion · fidejubere · fidepromission · fidepromissor · surety · fidejussio
Written by attorneys — see sources below.
A guarantor who binds himself to pay the debt of another. The obligation arises when the fidejussor undertakes secondary liability for the principal debtor's performance.
Fusion Power's counsel prepared notes analyzing a fidejussor's secondary liability on a construction bond after litigation appeared likely. Frontier Capital sought those notes in discovery. The court denied the request because the materials were prepared in anticipation of litigation by a party's representative.
Freya Freeman, a fidejussor on a New York loan, faced suit in Montana after the principal defaulted. The court applied New York law to determine whether the fidejussor's obligation had been discharged by a later agreement between the creditor and principal.
William Gasperini, a journalist and photographer who had taken over 5,000 slide transparencies while reporting in Central America, agreed in 1990 to supply 300 of his original color transparencies to The Center for Humanities, Inc., for use in an educational videotape titled Conflict in Central America. After the project concluded, the Center could not locate or return the transparencies, prompting Gasperini to pursue legal remedies for their loss. Gasperini, a California citizen, sued the Center, a New York corporation with its principal place of business in New York, in the United States District Court for the Southern District of New York. He invoked diversity jurisdiction under 28 U.S.C. § 1332 and alleged state-law claims for breach of contract, conversion, and negligence. The Center conceded liability, so the case proceeded to trial solely on damages. At the three-day jury trial, Gasperini's expert testified that the industry standard valued each lost transparency at $1,500 as the average license fee over the photographer's copyright term. Gasperini testified that his photography earnings from 1984 through 1993 totaled just over $10,000 and that he planned to publish a book of his best Central American photographs. The jury returned a verdict of $450,000, or $1,500 for each of the 300 slides. The Center moved for a new trial under Federal Rule of Civil Procedure 59, invoking both the federal standard and New York Civil Practice Law and Rules § 5501(c). The District Court denied the motion without comment. The Court of Appeals for the Second Circuit vacated the judgment after applying the New York deviates-materially standard itself. The Second Circuit surveyed Appellate Division decisions on similar awards and concluded that the verdict materially deviated from reasonable compensation because many slides were generic and Gasperini had limited earnings. It ordered a new trial unless Gasperini accepted a reduction to $100,000. The Supreme Court granted certiorari to resolve the conflict over the proper standard.
View caseFumiko Fujimoto signed as fidejussor for a California insured. When the insurer refused a claim, the beneficiary sued Fujimoto in California. The court held that Fujimoto's single contact through the surety undertaking satisfied minimum contacts for personal jurisdiction.
In 1944, Lowell Franklin, a resident of California, purchased a life insurance policy from the Empire Mutual Insurance Company, an Arizona corporation. In 1948, the respondent International Life Insurance Company agreed with Empire Mutual to assume its insurance obligations. Respondent then mailed a reinsurance certificate to Franklin in California offering to insure him in accordance with the terms of the policy he held with Empire Mutual. He accepted this offer and from that time until his death in 1950 paid premiums by mail from his California home to respondent’s Texas office. Petitioner Lulu B. McGee, Franklin’s mother and the beneficiary under the policy, sent proofs of his death to the respondent, but it refused to pay, claiming that he had committed suicide. It appears that neither Empire Mutual nor respondent has ever had any office or agent in California, and respondent has never solicited or done any insurance business in California apart from the policy involved here. The California statute subjecting foreign corporations to suit on insurance contracts with residents became law in 1949, after respondent had entered into the agreement with Franklin. Petitioner recovered a judgment in a California state court against respondent on the contract of insurance, with service of process by registered mail at respondent’s principal place of business in Texas pursuant to the state statute. Unable to collect the judgment in California, petitioner filed suit on the judgment in a Texas court. The Texas courts refused to enforce the judgment, holding it void under the Fourteenth Amendment because service of process outside California could not give the courts of that State jurisdiction over respondent. The Supreme Court granted certiorari to review the case.
View caseFaith Fitzgerald acted as fidejussor on a bond guaranteeing a released defendant's appearance. After the defendant appeared, the court discharged the bond and released Fitzgerald from further liability under the surety undertaking.
New York City operates a released time program permitting public schools to release students during the school day upon written parental request so they can attend religious instruction or devotional exercises at religious centers off school premises. Students who remain at school stay in their classrooms while the released students are away. Religious organizations submit weekly attendance reports to the schools listing any released children who did not report for instruction. This program uses no public school classrooms for religious teaching and involves no expenditure of public funds, with all costs including application forms paid by the religious groups. Appellants, New York City taxpayers and residents whose children attend public schools, challenged the constitutionality of the released time program in court. The New York Court of Appeals sustained the program. The matter came before the Supreme Court on appeal. The record contains no evidence of coercion by school authorities to compel student participation in religious classes. School officials act neutrally by releasing students only at parental request and by using attendance reports solely to confirm students are not truant.
View caseFoxfire Biotech's fidejussor faced an antitrust suit alleging the surety arrangement restrained trade. The court applied federal law to the fidejussor's secondary obligation because the underlying conduct occurred in interstate commerce.
In the late 1970s, ISO, an association of approximately 1,400 domestic property and casualty insurers that serves as the almost exclusive source of support services for CGL insurance in the United States, began revising its 1973 standard CGL policy form. The 1973 form provided occurrence-based coverage for sudden and accidental pollution and did not cap defense costs. Primary insurers including Hartford Fire Insurance Company, Allstate Insurance Company, Aetna Casualty and Surety Company, and CIGNA Corporation sought four changes: a shift to claims-made coverage with a retroactive date, elimination of pollution coverage, and a legal defense cost cap. After ISO proposed 1984 forms that omitted some of these changes, Hartford persuaded General Reinsurance Corporation, the largest American reinsurer, to procure the modifications or derail the program. The Reinsurance Association of America agreed to boycott the 1984 forms unless the changes were added, and domestic and London reinsurers informed ISO they would withhold reinsurance until the forms were altered. ISO then withdrew the 1984 forms and adopted 1986 forms containing a retroactive date and pollution exclusion; it later withdrew support services for the 1973 form. Separate agreements among London reinsurers required primary insurers to switch to claims-made policies and excluded pollution coverage from reinsurance contracts covering North American risks. Nineteen states and many private plaintiffs filed 36 complaints alleging that these actions violated section 1 of the Sherman Act. The cases were consolidated in the Northern District of California. The District Court granted motions to dismiss in 1989, holding the conduct fell within McCarran-Ferguson immunity and applying international comity to the foreign defendants. The Ninth Circuit reversed in 1991. The Supreme Court granted certiorari in 1992.
View caseFelicity French posted a fidejussor bond in a contract dispute. After losing on appeal, the court imposed appellate attorney fees on French because the bond obligated her to answer for the principal's full liability including costs.
Respondents brought this tort action in Alabama state court to recover damages for injuries sustained in a motorcycle accident. Petitioner removed the case to a Federal District Court having diversity jurisdiction. A jury trial resulted in a judgment of $800,000 for respondent Alan Woods and $5,000 for respondent Cara Woods. Petitioner posted bond to stay the judgment pending appeal, and the Court of Appeals affirmed without modification. 768 F.2d 1287 (CA11 1985). Respondents then moved in the Court of Appeals, pursuant to Ala. Code § 12-22-72 (1986), for imposition of that State’s mandatory affirmance penalty of 10% of the amount of judgment. Petitioner challenged the application of this statute as violative of the equal protection and due process guarantees of the Fourteenth Amendment and as “a procedural rule . . . inapplicable in federal court under the doctrine of Erie Railroad Co. v. Tompkins, 304 U. S. 64 (1938) and its progeny.” The Court of Appeals summarily granted respondents’ motion to assess the penalty and subsequently denied a petition for rehearing. The parties have stipulated that the final judgment has been paid, except for the $30,500 statutory affirmance penalty, which petitioner has withheld pending proceedings in this Court. The Supreme Court granted certiorari to consider the equal protection and due process challenges as well as the Erie claim. 475 U. S. 1080 (1986).
View caseA fidejussor is the Roman-law term for a guarantor who undertakes to pay another's debt. Modern suretyship law treats the fidejussor as a secondary obligor entitled to the same defenses as a surety.
A fidejussor is discharged when the creditor materially alters the principal obligation without consent or when the principal's duty is satisfied. The same suretyship defenses apply to the fidejussor.
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A fidejussor may be sued directly once the principal defaults, but the fidejussor retains the right to exoneration from the principal. The creditor need not exhaust remedies against the principal first.
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