Bradley v. Fidelity & Casualty Co. of New York
| Decision Date | 19 July 1940 |
| Docket Number | 187-1940 |
| Parties | Bradley, Appellant, v. Fidelity & Casualty Co. of New York |
| Court | Pennsylvania Superior Court |
Argued April 30, 1940.
Appeal from judgment of C. P. Allegheny Co., Jan. T., 1936, No 1255, in case of Paul R. Bradley v. Fidelity & Casualty Co. of New York.
Assumpsit. Before Richardson, J.
The facts are stated in the opinion of the Superior Court.
Verdict for plaintiff. Defendant's motion for a new trial and for judgment n. o. v. refused, but defendant's point of law reserved affirmed and verdict set aside to the extent that the same was in excess of a stated amount, before Richardson and Ellenbogen, JJ. Plaintiff appealed.
Error assigned was portion of order of court below setting aside part of verdict.
Judgment affirmed.
Donald W. Ebbert, with him John E. Laughlin, Jr., and Thorp Bostwick, Reed & Armstrong, for appellant.
Paul E Hutchinson, with him John C. Sherriff, of Sherriff, Lindsay, Weis & Hutchinson, for appellee.
Before Keller, P. J., Cunningham, Baldrige, Stadtfeld, Parker, Rhodes and Hirt, JJ.
Plaintiff brought this action of assumpsit to recover $ 2671.04, plus interest, as the amount allegedly due him under the terms of a fidelity bond issued by the defendant company. The amount sued for represents the total defalcations of an employee, Joseph L. Rigby, over a period of three years. Defendant's affidavit of defense put the entire claim in issue, and at the trial it submitted a point for charge to the effect that its maximum liability under the bond could, in no event, exceed $ 1000, with interest. The trial judge reserved the question of law thus raised, and submitted the case to the jury, which rendered a verdict in favor of the plaintiff for the full amount of the claim.
Subsequently the court in banc ordered the point of law reserved to be marked affirmed and set aside the verdict to the extent that it exceeded $ 1000, plus interest. Judgment was entered accordingly, and we now have this appeal by the plaintiff.
As the controversy comes before us in the form of a "Statement of the Case," filed under our Rule 56, we shall confine ourselves to the matters therein contained.
Rather extensive quotations from the bond are essential to an understanding of the issue. Omitting those sections which are not here relevant, the bond provides:
Name... .
Rigby, Joseph L.
$ 1000.00
$ 10.00
Cole, Carroll C.
1000.00
10.00
1000.00
10.00
Total
$ 3000.00
$ 30.00"
On June 22, 1933, one of the employees, Cole, resigned and a premium credit of $ 3.10 was granted by the defendant.
On October 13, 1933, the defendant issued to the plaintiff the following schedule:
The Schedule of Employees forming part of the bond described above is hereby amended in accordance with instructions received from the Employer to read as set forth in the Schedule of Employees subjoined.
Rigby, Joseph L.
1000.00
10.00
1000.00
10.00
Total
$ 2000.00
$ 20.00"
On March 8, 1934, the coverage of the bond was extended to another employee, Ralph F. White.
On October 13, 1934, the defendant again issued a schedule, which provided:
The Schedule of Employees forming part of the bond described above is hereby amended in accordance with instructions received from the Employer to read as set forth in the Schedule of Employees subjoined.
Rigby, Joseph L.
1000.00
10.00
1000.00
10.00
White, Ralph F.
1000.00
10.00
Total
$ 3000.00
$ 30.00"
While neither the bond nor the schedules provide for any termination date, it is apparent from the premiums charged, as set forth above, that the intention of the parties was that the premium of 1% was to pay for one year's protection. The evident purpose of the subsequent schedules issued on October 13 of each year was to keep the plaintiff employer's protection in force for the ensuing year as to the employees named in the respective schedules.
On February 23, 1935, while the bond was in effect, it was discovered that Joseph L. Rigby, an employee named in each of the three schedules, was a defaulter. Subsequent investigation revealed that during the first year the bond was in force the losses attributable to him totaled $ 906.95 during the second year they exceeded $ 1000; and during the third year amounted to $ 764.09, or a total of $ 2671.04.
Plaintiff's claim is based upon the theory that the yearly premiums paid for a protection of $ 1000 per year, i. e., that defendant's liability on the bond is cumulative. As against this, defendant contends that the effect of paragraphs 3 and 10 of the bond is to limit its liability for the defalcation of Rigby to the amount set opposite his name in the various schedules, viz., $ 1000.
In considering whether or not the bond imposed cumulative liability, we do not have the benefit of any Pennsylvania decisions, and it is impossible to reconcile all the cases from other jurisdictions.
Many cases involving bonds containing somewhat similar provisions have been considered in outside jurisdictions. In their disposition the test generally applied is whether or not the provisions of the bond are such that liability automatically terminates on a specified date. If so, any renewal amounts to a new contract with the result that the insurer's liability is correspondingly increased. [1]
It is to be noted that the bond with which we are concerned does not automatically expire, and may be canceled only by the written notice specified in Paragraph 2. Such being the case, it may be remarked that a majority of the cases in other jurisdictions support the general proposition that the insurer's liability is non-cumulative.
Manifestly, each case must be disposed of upon its own facts and under the provisions of the bond under which the claim arose. Therefore, even if it be assumed that the technical effect of the schedules was to create successive bonds, we do not see how, in view of the express provisions of Paragraph 10, the defendant's liability could be cumulative.
Treating, as we must under its language, the issuing of each subsequent schedule "as a continuation of a bond previously issued," that paragraph contemplates a possible liability to the insured, within the specified limitations, for defalcations by any employee named in the applicable schedule occurring in any one, or two, or all three, of the years here involved.
But upon the question at issue, the paragraph expressly provides: "Subject to the foregoing limits as respects each bond, the Company's aggregate liability under both bonds for all loss or losses shall in no event exceed the greatest amount for which the Company could be liable for such loss or losses under one of the said bonds." In this case that "greatest amount" is $ 1000. The plain meaning of the words...
To continue reading
Request your trial
-
Town of Troy v. American Fidelity Co.
...appear upon the bond, or policy, or contract, and cannot be read into it by a strained interpretation. Bradley v. Fidelity & Casualty Co. of New York, 1940, 141 Pa.Super. 85, 14 A.2d 894. It is the duty of the courts to construe contracts, not to make them for the parties. Johnson v. Hardwa......
-
Aetna Life and Cas. Co. v. McCabe
...103 F.2d 977 (3d Cir.1939); Exchange Bldg. Ass'n v. Indemnity Ins. Co., 338 Pa. 562, 12 A.2d 924 (1940); Bradley v. Fidelity & Casualty Co., 141 Pa.Super. 85, 14 A.2d 894 (1940). These cases, however, are inapposite because resolution of the limit of liability issue in this case turns on th......
-
Massachusetts Bond. & Ins. Co. v. Julius Seidel Lbr. Co.
...of the amount stated in the bond, in spite of the extent of actual losses over the years." See also: Bradley v. Fidelity & Casualty Co. of New York, 141 Pa.Super. 85, 14 A.2d 894; United States Fidelity & Guaranty Co. v. Barber, 6 Cir., 70 F.2d 220, 225, 226; Leonard v. Aetna Casualty & Sur......
-
PENN TP. v. Aetna Cas. & Sur. Co.
...and we are aware of only two decisions of this court that have done so, those being Eddystone Fire Co. and Bradley v. Fidelity & Casualty Co., 141 Pa.Super. 85, 14 A.2d 894 (1940). In both of those cases, the bonds at issue contained different language from that which we must construe in th......