                    NOT FOR PUBLICATION WITHOUT THE
                   APPROVAL OF THE APPELLATE DIVISION

                                      SUPERIOR COURT OF NEW JERSEY
                                      APPELLATE DIVISION
                                      DOCKET NO. A-1113-12T4



ALLIED BUILDING PRODUCTS                  APPROVED FOR PUBLICATION
CORP.,
                                             September 5, 2014
      Plaintiff,
                                            APPELLATE DIVISION
v.

J. STROBER & SONS, LLC,
SUSAN F. STROBER, Individually,
STEVE STROBER, Individually,
and ARCH INSURANCE COMPANY,

      Defendants,

and

DOBCO, INC.,

      Defendant-Appellant,

and

COLONIAL SURETY COMPANY,

      Defendant-Respondent.

_____________________________________

          Argued September 11, 2013 – Decided September 5, 2014

          Before Judges Grall, Nugent and Accurso.

          On appeal from Superior Court of New Jersey,
          Law Division, Bergen County, Docket
          No. L-601-10.
            Christopher Nucifora argued the cause for
            appellant (Kaufman, Dolowich & Voluck, LLP,
            attorneys; Mr. Nucifora and Antonio J.
            Casas, on the briefs).

            Greg Trif argued the cause for respondent
            (McElroy, Deutsch, Mulvaney & Carpenter,
            LLP, attorneys; Mr. Trif and Adam R.
            Schwartz, of counsel and on the brief).

     The opinion of the court was delivered by

ACCURSO, J.A.D.

     In this action on a surety bond, Dobco, Inc. (Dobco)

appeals from a September 19, 2012 final judgment denying its

motion for partial summary judgment against Colonial Surety

Company (Colonial), surety for J. Strober & Sons, LLC (Strober),

Dobco's subcontractor, and granting Colonial's motion for

summary judgment dismissing Dobco's cross-claims1 against

Colonial.    The Law Division dismissed Dobco's claims against

Colonial under the bond on the ground that the bond did not name

Dobco as the obligee and because Dobco had rejected the bond as

not in the form required by its subcontract with Strober.     We

deem neither of those facts material because we conclude that in

entering into its surety contract with Strober, Colonial

1
  This action began as a book account complaint by Allied
Building Products Corp. (Allied), a material supplier to
Strober, against Strober, Dobco and Colonial. Dobco's
affirmative claims against Colonial were thus properly
denominated as cross-claims in that action. Because Allied's
claims, which were resolved prior to these motions, are
irrelevant to the issues before us, we do not discuss them.



                                 2                          A-1113-12T4
obligated itself to issue a performance bond to Dobco in the

form annexed to the Dobco/Strober subcontract.      Accordingly, we

reverse.

     The facts adduced on the motions establish that Dobco was

the general contractor to The William Patterson University (WPU)

for a project referred to as the "Science Hall Addition,

Renovation, and Greenhouse."    Strober bid for and was awarded a

subcontract for the roofing work.       Dobco and Strober entered

into a standard AIA ("American Institute of Architects") form of

agreement on November 11, 2008.       The agreement required Strober

to furnish performance and payment bonds in the amount of

$890,000, in the forms annexed to the agreement, prior to

commencing work.2   Strober applied to Colonial, the surety that

had furnished Strober's bid bond for the project, for its

performance bond.

     Colonial is a Pennsylvania company, licensed in New Jersey

as a property and casualty insurer.       The company specializes in

contract surety and fidelity.     By it's president's account,

Colonial does not "write business" in the way other insurers do.

Upon establishing a "partnership account" with Colonial, a


2
  As only the performance bond is at issue here, we limit our
discussion to it, although acknowledging that it was issued in
tandem with the payment bond and the premium Strober paid
Colonial was apparently for both bonds.



                                  3                           A-1113-12T4
contractor is provided a "line of surety" with single and

aggregate limits, a power of attorney and Colonial's seal.     When

the contractor wants to obtain a bid bond for a project, it uses

its partnership account code to log into Colonial's website,

inputs the project information and prints out the bond and

consent of surety.    The contractor signs the documents on behalf

of Colonial using its power of attorney, applies Colonial's seal

and submits the bond and consent of surety with its bid.

     If the contractor wins the contract, it updates the online

information provided previously and requests issuance of the

performance bond.    Colonial then has one of its bond

administrators make inquiries regarding the bid spreads between

the top few bidders, the identity of the architect and the

engineer's estimate.3   The package is then submitted to




3
  Colonial's witnesses testified at deposition about the
inquiries made in this matter with reference to notes on a bid
bond request form printed the day before Colonial issued its
performance bond. Colonial's underwriter testified that the
notes would have been created by the bond administrator in the
normal course of approving Strober's request for the performance
bond and that the information reflected in the notes was in hand
before the underwriter approved the issuance of the bond on
February 25, 2009. Among other things, Colonial's notes on this
document, which is not in the appendix, indicate that Dobco was
the general contractor on the project and also state "Science
Hall subcontractor to general contractor." Although the notes
might appear to suggest that Colonial had actual knowledge of
the true state of Strober's role in the WPU project before
Colonial issued its performance bond, we cannot draw that
                                                      (continued)


                                 4                          A-1113-12T4
Colonial's underwriter for his approval.    Significantly,

however, Colonial does not request or review the actual contract

prior to issuing a performance bond.    Colonial's president

testified at deposition that Colonial's "general policy is not

to request a copy of the contract."    When asked why, the

president responded "General – just don't.    Never do."     When

asked how Colonial "would . . . verify that it is bonding the

correct contract, if it never reviews the contract" prior to

issuing the performance bond, the president responded

"[v]erification, in my opinion, is not necessary.    That's why we

don't review the contract."   Colonial did not review the Strober

subcontract before issuing the performance bond at issue here.

    The parties agree that Strober submitted a bid bond for the

project through Colonial's online system and that Colonial

followed its usual procedures in issuing the performance bond on

February 26, 2009.   The bond provides in pertinent part:

              That J Strober & Sons, LLC, Ringoes, NJ
         as Principal, hereinafter called Contractor,
         and COLONIAL SURETY COMPANY a corporation
         organized and existing under the laws of the
         Commonwealth of Pennsylvania, as Surety,
         hereinafter called Surety, are held and
         firmly bound unto




(continued)
conclusion on this record and do not rely on any such knowledge
by Colonial here.



                                5                             A-1113-12T4
         William Patterson University, Wayne, NJ
         07470

         as Obligee, hereinafter called the Owner, in
         the amount of

         Eight Hundred Ninety Thousand Dollars and No
         Cents Dollars ($890,000),
         for the payment whereof Contractor and
         Surety bind themselves, their heirs,
         executors, administrators, successors and
         assigns, jointly and severally, firmly by
         these presents.

              WHEREAS, Principal has by written
         agreement dated November 11, 2008, entered
         into a contract with the Owner for Science
         Hall Addition to William Patterson
         University[.]

         In accordance with drawings and
         specifications prepared by (here insert full
         name, title and address) Hellmuth, Obata &
         Kassabaum, 620 Avenue of the Americas, 6th
         Floor, New York, NY 10011 which contract is
         by reference made a part hereof, and is
         hereinafter referred to as the Contract.

              NOW THEREFORE, THE CONDITION OF THIS
         OBLIGATION is such that if Contractor shall
         promptly and faithfully perform said
         Contract, then this obligation shall be null
         and void; otherwise it shall remain in full
         force and effect.

While the bond bears the correct date of the Dobco/Strober

subcontract, it misidentifies the obligee as WPU, the owner,

instead of Dobco, WPU's general contractor and the party to whom

Strober promised the bond in the November 11, 2008 written

agreement.   Strober paid Colonial the full $16,350 premium for

the performance bond.



                                6                         A-1113-12T4
    Following Strober's delivery of the bond and accompanying

documents   to    Dobco,   Dobco   wrote   the   following   memorandum   to

Strober.

            We are in receipt of the performance and
            payment bond # CSC-216974 dated February 26,
            2009.

            As identified in the AIA A401 Standard Form
            of Agreement Between Contractor and
            Subcontractor dated November 11, 2008, we
            required the performance and payment bond
            to be issued on a specific form. The
            performance and payment bonds we received do
            not comply with that requirement. Please
            re-issue the performance and payment bond on
            those forms. A copy of the forms are
            attached with this memorandum. Please
            provide the re-issued performance and
            payment bond no later than March 16, 2009.
            Thank you for your cooperation.

The parties dispute whether Dobco returned the performance bond

to Strober.      Dobco maintains that it retains the bond in its

possession.      Strober, which is not a party to this appeal,

maintains that Dobco returned the bond and that it, in turn,

returned the bond to Colonial.        Colonial denies that the

original bond was ever returned to it.

    Upon receipt of Dobco's memorandum, Strober, using

Colonial's power of attorney and seal, executed performance and

payment bonds on Dobco's forms and telefaxed a copy to Dobco.

Colonial contends this second set of bonds is a nullity as its

agreement with Strober limited Strober to issuing bid bonds on




                                      7                            A-1113-12T4
Colonial's behalf.   Upon receiving the second set of bonds,

Dobco sent Strober the following memorandum.

          We are in receipt of the revised performance
          and payment bond # CSC-216974 dated February
          26, 2009. A copy of which is attached.

          The revised performance and payment bond is
          not acceptable. The performance and payment
          bond must be revised and issued by Colonial
          Surety Company with accompanying Surety
          Disclosure Statement and Certification,
          General Power of Attorney, and Financial
          Statement.

          Please provide the re-issued performance and
          payment bond no later than March 18, 2009.
          A failure to provide this requirement by
          that day may delay the process of any
          payments to your company. Thank you for
          your cooperation.

    Strober did not provide revised bonds to Dobco but

delivered material to the project site in April and began work

in May.   In early May, Dobco personnel complained to Strober

about its work and noted that Strober had yet to respond to its

request that Colonial reissue the bonds.   Strober, in turn,

asked Colonial to reissue the bonds on Dobco's forms.     Colonial,

however, had become aware that Strober was experiencing

financial difficulties and instead asked for updated financial

information from Strober.

    Strober continued to prod Colonial for revised bonds and

was several times advised by Colonial that "it is in

underwriting," notwithstanding that Colonial had already issued



                                8                           A-1113-12T4
the bond and Strober had already paid for it.    The record

contains evidence of several exchanges between Strober and

Colonial regarding the subcontract's requirement that the bonds

be issued on Dobco's form, Colonial's underwriter's discomfort

with Dobco's form and his suggestion that Strober approach Dobco

with other bond forms, the strength of Strober's finances and

whether Colonial was willing to continue to bond the company

going forward.

    On July 21, Strober advised Dobco that "[w]e will . . . be

forwarding the bond."   On July 24, Strober wrote to the

underwriter at Colonial asking that he "confirm the status of

our William Patterson Bond."    Strober wrote that "[w]e received

it, paid for it, but had to send the original back to have it on

another form as per our GC.    Please confirm the status."    Later

that same day, Strober sent the following email to Dobco,

copying the underwriter at Colonial.

         Hossam. I've reached out to our Bond
         company on several occasions requesting the
         Wm. Patterson Bond being re-sent on the form
         you requested. The bond is active but I'm
         unable to get this on your form as quickly
         as you would like. As soon as they change
         the form I will forward to you. I've cc'd
         the bond co[.] as well. Thanks[.]

Dobco called Colonial and was also advised the bond was active.

On July 27, Strober sent an internal email, copying the

underwriter at Colonial, advising that the underwriter was "not



                                 9                            A-1113-12T4
real comfortable with [Dobco's] form," and would review the

contract provision requiring that the bond be issued in that

format.

    Dobco subsequently terminated Strober, which thereafter

sought bankruptcy protection.   Dobco filed a claim against

Colonial under the bond.   Colonial denied the claim on the basis

that Dobco rejected both sets of bonds, both sets of bonds name

WPU as the obligee, and Dobco knew or should have known "that

the Alleged Second Bonds were unauthorized and that there was

never an agreement between Strober and WPU in connection with

the Project."   Colonial claimed that "[n]either the Bonds nor

the Alleged Second Bonds are in effect nor subject to claim by

Dobco."   Colonial has never revoked the bonds nor returned the

premium to Strober.

    After hearing argument on the parties' cross-motions, the

Law Division judge issued a written opinion granting summary

judgment to Colonial dismissing Dobco's claims.   Relying on

well-settled law "that a surety is chargeable only according to

the strict terms of its undertaking and its obligation cannot

and should not be extended either by implication or by

construction beyond the confines of its contract," Monmouth

Lumber Co. v. Indem. Ins. Co. of N. Am., 21 N.J. 439, 452

(1956), the judge found that WPU and not Dobco was the




                                10                          A-1113-12T4
designated obligee under both sets of bonds.     The judge further

found that Dobco rejected both the first and second set of bonds

and thus no valid contract was formed between Colonial and

Dobco.

     The judge rejected Dobco's claim for reformation as the

language of the bond was "clear and not ambiguous" and there was

no evidence of mutual mistake because "[t]he undisputed evidence

establishes that at the time of issuance, Colonial was unaware

that the bonded subcontract agreement was between Strober and

Dobco."   The judge acknowledged "Dobco's general argument that

Colonial had a duty to read and approve the underlying contract

mentioned in the bond agreements" but found that "Dobco has not

supported said argument or conclusion with facts or competent

expert opinion that Colonial, the surety in this particular

matter, or any surety as a matter of standard industry practice,

had a duty to do so."4   This appeal followed.

     Dobco contends that the trial judge erred in concluding

that Dobco had no rights under the bond or Strober's contract

with Colonial and further erred in concluding on summary

judgment that Dobco rejected the bonds.   We review summary


4
  The judge also addressed and rejected Dobco's claims under an
assignment from WPU and the application of equitable estoppel.
As our resolution of the appeal makes it unnecessary to reach
these claims, we do not discuss them.



                                11                          A-1113-12T4
judgment using the same standard that governs the trial court.

Henry v. N.J. Dep't of Human Servs., 204 N.J. 320, 330 (2010).

Our first task here is thus to determine whether the motion

judge was correct in determining that Dobco had no rights under

the bond or Strober's surety contract with Colonial.    See

Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162,

167 (App. Div.), certif. denied, 154 N.J. 608 (1998).     Because a

trial court does not enjoy the advantage in discerning the law

that it does in discerning the facts, a reviewing court owes no

special deference to the "trial court's interpretation of the

law and the legal consequences that flow from established

facts."   Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140

N.J. 366, 378 (1995).

    "'Suretyship is a contractual relation resulting from an

agreement whereby one person, the surety, engages to be

answerable for the debt, default or miscarriage of another, the

principal.'"   Eagle Fire Prot. Corp. v. First Indem. of Am. Ins.

Co., 145 N.J. 345, 353 (1996) (quoting Amelco Window Corp. v.

Fed. Ins. Co., 127 N.J. Super. 342, 346 (App. Div. 1974)).

Traditionally, these relationships involve three parties: "an

obligee who is owed a debt or duty; a primary obligor, who is

responsible for the payment of the debt or performance of the

duty; and a secondary obligor, or surety, who agrees to answer




                                12                            A-1113-12T4
for the primary obligor's debt or duty."   Cruz-Mendez v.

Isu/Ins. Servs. of San Francisco, 156 N.J. 556, 568 (1999).      The

obligee has an enforceable cause of action to recover on the

debt from the surety "if the surety promises in the bond, either

in express words or by reasonable implication, to pay money to

him."   Eagle Fire Prot. Servs., supra, 145 N.J. at 353-54.

    New Jersey does not have as extensive a body of suretyship

law as do some other states, as evidenced by the parties'

extensive reliance on out-of-state authority.   We do, however,

have some well-established principles to guide a court's

interpretation of a surety bond, most notably that when a bond

incorporates a contract by reference, the bond and the contract

must be considered as one integrated document in ascertaining

the meaning of the bond's provisions.   Id. at 356-57.

   Here, despite the performance bond's explicit reference to

Strober's contract for the Science Hall Addition at WPU dated

November 11, 2008, the Law Division declined to consider the

contract in interpreting the language of the bond.   Instead,

relying on the well-established principle "that a surety is

chargeable only according to the strict terms of its undertaking

and its obligation cannot and should not be extended either by

implication or by construction beyond the confines of its

contract," Monmouth Lumber Co., supra, 21 N.J. at 452, the court




                                13                          A-1113-12T4
concluded that Dobco had no rights under the bond because

Colonial's promise was unambiguously to WPU, the stated obligee.

    In employing that principle of strict construction in

interpreting the bond, we think the trial court erred.   The

Restatement makes plain that the principle relied on by the

trial court, although well known and oft-quoted, applies only

after one has determined the extent of the surety's undertaking.

It is not to be used to interpret the language creating the

surety's obligations under the bond.   Instead, the Restatement

holds that contracts creating secondary obligations are to be

interpreted by the same standards that apply to interpretation

of contracts generally.   Restatement (Third) of Suretyship and

Guaranty § 14 (Interpretation of the Secondary Obligation —

Generally) (1996).

    The Reporters Notes explain the problem.   Observing that

"[t]here are few, if any, principles of suretyship law that

cause more confusion than the standards of interpretation of

contracts creating secondary obligations," the Notes continue:

         The principle adopted by this section,
         distinguishing interpretation of the
         contract creating the secondary obligation
         from the application of substantive
         principles of suretyship law to that
         contract, has been stated as follows:

         "However, the rule of strictissimi juris
         requires only that, after the meaning of




                                14                          A-1113-12T4
         the contract of guarantee has been
         determined according to ordinary principles
         of contract construction, the obligations
         undertaken by the guarantor are to be
         strictly applied. . . . Thus, while '[t]he
         liability of a surety cannot be extended
         beyond the plain and explicit language of
         the contract . . . a surety is not entitled
         to any particular tenderness in the
         interpretation of the language of the
         contract.'" Banco Portugues do Atlantico v.
         Asland, S.A., 745 F. Supp. 962, 967-68
         (S.D.N.Y. 1990) (quoting 63 N.Y. Jur. 2d
         Guaranty and Suretyship[] § 89 (1987))
         (citations omitted).

         [Ibid. (alteration in original).]

    A close reading of our own law reveals it in accord with

the Restatement.   See e.g., Eagle Fire Prot. Servs., supra, 145

N.J. at 356 (noting the rule of strict construction "has been

modified, if the language in the construction bond is ambiguous"

(citing V. Petrillo & Son, Inc. v. Am. Constr. Co., 148 N.J.

Super. 1, 4-5 (App. Div.), certif. denied, 75 N.J. 4 (1977))).

The Restatement approach is further reflected in the Court's

admonition that when the bond incorporates the contract by

reference, "the bond and the contract must be considered as one

integrated document."   Id. at 356.   As such, the bond

         "should be construed in connection with, and
         in the light of, [the] contract with which
         it was executed or the performance of which
         it secures, especially where the bond refers
         to the contract and makes it part of the
         bond. Thus, the bond, the contract, and the




                                15                        A-1113-12T4
            specifications constitute an integrated
            obligation, and are to be read together."

            [Id. at 357 (quoting 17 Am. Jur. 2d
            Contractors' Bonds § 7 (1990).]

    Under our ordinary rules of construction, contract

provisions are to be "read as a whole, without artificial

emphasis on one section, with a consequent disregard for

others."    Borough of Princeton v. Bd. of Chosen Freeholders of

the Cnty. of Mercer, 333 N.J. Super. 310, 325 (App. Div. 2000),

aff'd, 169 N.J. 135 (2001).      "Literalism must give way to

context."    Ibid.    Applying those standards here, it is

inescapable that the bond was intended to secure Strober's

obligations under its November 11, 2008 contract with Dobco,

notwithstanding the bond's identification of WPU as the obligee.

There is no other contract than the one Strober had with Dobco,

and Strober owed no obligation of any sort to WPU.      We may not

ignore the general design of the agreement in ascertaining the

sense of particular terms, even one so central as the identity

of the obligee.      See Krosnowski v. Krosnowski, 22 N.J. 376, 387

(1956).

    Having determined that Colonial bound itself to answer for

Strober's performance under the subcontract, we are led

ineluctably to conclude that Colonial agreed to do so in the

manner specified therein, that is, on Dobco's own form.         The




                                   16                           A-1113-12T4
Dobco/Strober subcontract makes absolutely clear that Strober

agreed to provide Dobco with a performance bond in the sum of

$890,000 in the form annexed to the agreement.    The hallmark of

a contract of suretyship is the surety's direct and primary

undertaking to answer for the performance of the principal.

Cruz-Mendez, supra, 156 N.J. at 569 (noting "the unique

characteristics of suretyship remain intact in New Jersey,

Newark Fin. Corp. v. Acocella, 115 N.J.L. 388 (Sup. Ct. 1935)

(explaining that surety undertakes 'direct and primary'

obligation, as distinguished from guarantor, whose obligation is

'secondary' and 'collateral')").

    Here, Strober undertook to produce a performance bond in a

required sum on a particular form.    When Colonial agreed to bond

that performance, it undertook the obligation to do so in the

form required by the contract.   That Colonial chose not to

review the contract it bonded cannot relieve it of obligations

voluntarily undertaken.   It has long been the law of this State

that "[t]he surety is chargeable with knowledge of the contents

of the contract it undertook to guarantee."    Jersey City Water

Co. v. Metropolitan Const. Co., 76 N.J.L. 419, 421 (Sup. Ct.

1908).   The law of other jurisdictions is in accord.   See e.g.,

Western N. Y. Life Ins. Co. v Clinton, 66 N.Y. 326, 331-32

(1876) ("It is the duty of the sureties to look out for




                                 17                        A-1113-12T4
themselves and ascertain the nature of the obligation embraced

in the undertaking, and any other rule would not only work

serious inconvenience, but render securities of this character

of but little, if of any, value."); see also Rachman Bag Co. v.

Liberty Mut. Ins. Co., 46 F.3d 230, 235 (2d Cir. 1995) (decided

under New York law).    Accordingly, we disagree with the Law

Division that Dobco required expert testimony to establish the

existence of a duty on the part of the surety to inform itself

of its obligations under the agreement incorporated in its bond.

    Because we conclude that by entering into its contract with

Strober and accepting Strober's premium payment, Colonial

voluntarily obligated itself to issue its bond in the form

required by the Dobco/Strober subcontract, we reject the Law

Division's finding that reformation was unavailable here.

Reformation based on mutual mistake requires clear and

convincing evidence that the parties' minds have met in a prior

existing agreement that their written agreement fails to

express.   Bonnco Petrol, Inc. v. Epstein, 115 N.J. 599, 608

(1989).    The Court has explained "that in the context of

situations where a writing inaccurately reflects the parties'

agreement or intentions, 'mutual mistake requires that both

parties are in agreement at the time they attempt to reduce

their understanding to writing, and the writing fails to express




                                 18                          A-1113-12T4
that understanding correctly.'"    Id. at 609 (quoting St. Pius X

House of Retreats v. The Diocese of Camden, 88 N.J. 571, 579

(1982)).

     Here, there can be no doubt that Strober and Colonial both

intended that Colonial would bond Strober's obligations under

its November 11, 2008 contract to perform the roofing work at

WPU because the bond Colonial issued references an agreement for

such work dated November 11, 2008, and there is no other

contract to which that reference could apply.    Colonial's

failure to correctly identify the obligee and to issue its bond

on the form incorporated in the Dobco/Strober subcontract did

not result from any failure of a meeting of the minds between

Colonial and Strober but solely from Colonial's election not to

review the contract it had agreed to bond.   As our law charges

the surety with knowledge of the Dobco/Strober subcontract,

reformation is the appropriate remedy in these circumstances.

     Finally, we reject Colonial's argument that it was relieved

of its obligation to Strober by Dobco's supposed rejection of

the non-conforming bond5 Strober tendered to Dobco.   While


5
  We refer here to the Colonial bond. Our resolution of the
appeal makes it unnecessary for us to consider the parties'
arguments concerning the second Strober "bond," only a copy of
which was ever sent to Dobco, and without the surety disclosure
statement and certification, general power of attorney and
financial disclosure.



                                  19                          A-1113-12T4
Colonial argues that the law requires acceptance of the bond by

the obligee before the surety is chargeable, no New Jersey case

says so, although that appears generally to be the law

elsewhere, at least with regard to the older cases.6    See, e.g.,

Rachman Bag Co., supra, 46 F.3d at 238 (2d Cir. 1995)

(discussing traditional requirements of delivery and acceptance

under New York law).

     Although we have found no New Jersey authority on the

necessity of acceptance of a surety bond by the obligee, the few

New Jersey cases treating delivery in the context of a

suretyship make clear that in this area, as in others, our law

does not exalt form over substance.   See, e.g., Real Estate-Land

Title & Trust Co. v. Stout, 117 N.J. Eq. 37, 41-43 (1934)

(finding no delivery where delivery made in absence of all

required signatures); State Bank at Trenton v. Evans, 15 N.J.L.

155, 161 (Sup. Ct. 1835) (finding bond inoperative in the hands


6
  More modern authority suggests, at least in the area of
construction contract suretyship where custom and industry
practice is well established, that the surety's communication to
the obligee of its intent to be bound is sufficient to bind the
surety before execution and delivery of the bonds in final form.
See Turner Construction Co. v. First Indemnity of America
Insurance Co., 829 F. Supp. 752, 760-61 (E.D. Pa. 1993)
("Pennsylvania statutory law confirms the conclusion that [the
surety's] letter of intent on September 29, 1990 as a matter of
industry practice and [the surety's] express words constituted a
binding and enforceable surety contract even before execution
and delivery of the bonds in their final form").



                               20                           A-1113-12T4
of the obligee, by whatever means he got possession, until

condition of its delivery is performed); Folly v. Vantuyl, 9

N.J.L. 153, 158-59 (Sup. Ct. 1827) (noting "[t]hat there is no

precise or set form in which a delivery must be made" and

finding constructive delivery to obligee with words "here is

your bond, what shall I do with it").   The common law

requirement of delivery to the obligee was based on solicitude

for guarantors and accommodation parties, many of whom formerly

were individuals not receiving any remuneration for their

promises.   See, e.g., Peoples Nat'l Bank of N.J. v. Fowler, 73

N.J. 88, 98-100 (strictly construing surety's obligation where

surety uncompensated), cert. denied, 434 U.S. 858, 98 S. Ct.

182, 54 L. Ed. 2d 131 (1977); Bank of Tarboro v. Fidelity &

Deposit Co., 38 S.E. 908 (N.C. 1901) (distinguishing between

private and paid sureties).   The older cases hold that notice of

acceptance to the surety was required in the case of non-

absolute obligations because the surety would not otherwise know

whether it was obligated on its offer, Acme Mfg. Co. v. Reed, 47

A. 205, 206-08 (Pa. 1900) ("a party giving a letter of guaranty

has a right to know whether the person to whom it is addressed

means to hold him ultimately responsible, inasmuch as his own

caution and vigilance may, in a great measure, be regulated by

his knowledge of the fact"), or whether its form was acceptable




                                21                          A-1113-12T4
to the obligee, see Fidelity & Deposit Co. v. West Point

Construction Co., 344 S.E.2d 268, 269-70 (Ga. Ct. App. 1986)

(discussing contract requirement that performance bond be

provided in form acceptable to the contractor).

    Because no New Jersey case requires acceptance by the

obligee before the surety can be charged, we are not called to

consider whether such precedent, founded in a different era in

consideration of a variety of instruments many of which are now

obsolete, should apply to this performance bond issued for

consideration by an insurance company specializing in contract

surety.   Instead, our focus is on the substance of the

Dobco/Strober subcontract Colonial voluntarily undertook to

bond.

    Dobco was entitled by the terms of that agreement to a

performance bond in the sum of $890,000 on the specific form

incorporated therein.   By contracting with Strober to bond

Strober's obligations under its subcontract with Dobco, Colonial

obligated itself to issue the performance bond on Dobco's form.

Colonial is in the business of writing surety bonds, and it

accepted a premium from Strober for this bond, which it has

never returned.   Under these circumstances, we have no

hesitation in rejecting Colonial's argument that Dobco's

unwillingness to accept less than what it contracted for, and




                                22                          A-1113-12T4
Colonial promised, relieved Colonial of its contractual

obligation to Dobco.

    Reversed and remanded for further proceedings in conformity

with this opinion.   We do not retain jurisdiction.




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