Louis Pizitz Dry Goods Co. v. Fidelity & Deposit Co. of Maryland

• Decision Date: 08 October 1931
• Docket Number: 6 Div. 786.
• Citation: 136 So. 800,223 Ala. 385
• Parties: LOUIS PIZITZ DRY GOODS CO. v. FIDELITY & DEPOSIT CO. OF MARYLAND.
• Court: Alabama Supreme Court

136 So. 800

223 Ala. 385

LOUIS PIZITZ DRY GOODS CO. v. FIDELITY & DEPOSIT CO. OF MARYLAND.

6 Div. 786.

Supreme Court of Alabama

October 8, 1931

Appeal from Circuit Court, Jefferson County; Richard v. Evans Judge.

Action on a fidelity bond by the Louis Pizitz Dry Goods Company against the Fidelity & Deposit Company of Maryland. From a judgment for defendant, plaintiff appeals.

Affirmed.

R. B Evins, of Birmingham, for appellant.

London Yancey & Brower and J. K. Jackson, all of Birmingham, for appellee.

GARDNER J.

The suit is upon a fidelity bond, and the question presented for decision is whether or not a disbursement of the funds of the employer by the employee in disregard of the known rules of the former, but innocently so far as regards any intent to injure or defraud, is a willful misapplication thereof within the meaning of the language of the bond, the substance of which is set out in count 1 of the complaint appearing in the report of the case.

We have examined with much care the authorities relied upon by counsel for appellant (among them: May v. N.Y. Motion Picture Corporation, 45 Cal.App. 396, 187 P. 785; Green v. U.S. Fid. & Guar. Co., 135 Tenn. 117, 185 S.W. 726; Buchanan v. Cook, 70 Vt. 168, 40 A. 102; Anderson v. Horn, 116 N.Y. 336, 22 N.E. 695; People v. Brooks, 1 Denio (N. Y.) 457, 43 Am. Dec. 704; I. C. R. R. Co. v. Leiner, 202 Ill. 624, 67 N.E. 398, 95 Am. St. Rep. 266; U.S. v. Britton, 107 U.S. 655, 2 S.Ct. 512, 27 L.Ed. 520), defining the meaning of the words "wilful" and "misapplication" as used in the various connections there treated, and have considered the argument in the light of the well-recognized rule that doubtful language in instruments of this character is to be construed most favorably to the insured. 25 Corpus Juris, 1091; Ill. Surety Co. v. Donaldson, 202 Ala. 183, 79 So. 667.

This rule, however, as has been well said, is not to be carried to the extent of construing such a contract contrary to the manifest intention of the parties, for such intention is the "pole star" of all rules of construction. 25 Corpus Juris, 1092. The above-noted authorities do not concern a contract as that here presented, and, from our examination of those authorities dealing with analogous situations, we are not persuaded the trial court incorrectly ruled in the construction of the instrument here in question. The meaning of a word is largely to be determined by the connection in which it is used (Street v. Treadwell, 203 Ala. 68, 82 So. 28), and a fidelity bond is to be construed according to its context. 25 Corpus Juris, 1092.

We are rather persuaded that the well-known and ancient maxim, noscitur a sociis-the meaning of a doubtful word may be ascertained by reference to the meaning of words associated with it-broader in its scope than the kindred maxim ejusdem generis (State v. Western Union, 196 Ala. 570, 72 So. 99; 46 Corpus Juris 496), is here of controlling influence, and has, we think, been so considered by the courts construing like bonds.

A few of the cases more directly in point will be noted. A statute of the state of Texas (Rev. St. 1911, art. 574) required the execution of a bond by the cashier of a state bank, "conditioned to pay the bank such pecuniary loss as the bank may sustain of money or other valuable securities embezzled, wrongfully abstracted or wilfully misapplied by said officer." The suit was upon a bond so conditioned, and the court, speaking of the proper meaning of the words "willful misapplication," said: "Willful misapplication as described in the statutes means a misapplication, willfully and unlawfully made by one or more of the officers of the bank, of the money, funds, or credits of the bank, and done with intent to injure the bank, and the funds so misapplied must be converted to the use of the officer or officers making such misapplication or to the use of some other person than the bank." Maryland Casualty Co. v. Farmers' State Bank (Tex. Civ. App.) 258 S.W. 584, 586.

The case of Chapman, Commissioner of Banking v. Nieman et al. (Tex. Civ. App.) 276 S.W. 302, was of like character and to like effect. The case of Kansas Flour Mills Co. v. American Surety Co., 98 Kan. 618, 158 P. 1118, is here much in point, as the pertinent language of the bond was similar to that in the instant case, with the exception that just preceding the word "misapplication" the word "wilful" is omitted, an omission that by no means lessened the weight of the authority as here applicable. Answering the argument that the word "misapplication" speaks for itself, and includes applications merely amiss and not vicious because of mortal turpitude, the court said:

"The court is not willing to accept this interpretation of the bond. All the words used should be considered as employed for a purpose, and the collocation should be taken into account in arriving at their meaning. So considered, it is plain the purpose of the bond was to cover all

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