National Sur. Co. v. Williams

• Citation: 77 So. 212,74 Fla. 446
• Parties: NATIONAL SURETY CO. et al. v. WILLIAMS.
• Decision Date: 08 December 1917
• Court: United States State Supreme Court of Florida

77 So. 212

74 Fla. 446

NATIONAL SURETY CO. et al. v. WILLIAMS.

Florida Supreme Court

December 8, 1917

Error to Circuit Court, Wakulla County; E. C. Love, Judge.

Action by Alexander H. Williams, as receiver of the Sopchoppy State Bank against the National Surety Company and another. Judgment for plaintiff, motion for new trial denied, and defendant named brings error. Judgment affirmed, if remittitur be entered; otherwise, reversed.

Syllabus by the Court

SYLLABUS

An exhibit may by apt words be made a part of a declaration ex contractu or ex delicto, and where both parties, as well as the court below, have treated such an exhibit as a part of the declaration which may be reached by demurrer, this court will follow the example of the parties and the trial court and likewise so regard it when the case comes here on writ of error.

When properly tested by demurrer or other appropriate procedure ambiguities in a pleading should be construed against the part in whose interest the ambiguous language is used; yet a court may not be held in error for overruling a demurrer to an ambiguous pleading when such pleading does not put the opposite party to a disadvantage, and when under the allegations or averments of the pleading, a cause of action or a defense may fairly be shown by proper evidence.

Stockholders of a corporation may by appropriate action ratify by-laws adopted by the promoters of such corporation before letters patent were issued and delivered to it.

Prior to the adoption of chapter 6465, Acts of 1913, Laws of Florida (Comp. Laws 1914, ss 1717a, 1717b), provisions and stipulations contained in valid contracts limiting the time within which suits could be brought upon such contracts were valid and enforceable.

A bond made by a surety company agreeing to reimburse an employer for any pecuniary loss sustained 'by any act of fraud and dishonesty, including larceny or embezzlement, forgery and misappropriation of funds,' committed by a designated employé, is in effect a 'contract of insurance' to which the rules of construction governing ordinary contracts of insurance are applicable.

The rule for the construction and interpretation of insurance contracts is that the policy must be liberally construed in favor of the insured so as not to defeat, without a plain necessity, his claim to the indemnity, which, in making the insurance, it was his object to secure.

A bond made by a surety company agreeing to indemnify a bank against pecuniary loss on account of any fraud or dishonesty of its cashier, if susceptible of two constructions, one favorable to the bank, and the other favorable to the surety company will be given the former construction when such bond was drawn by the attorneys or representatives of the surety company.

The bond of a surety company agreeing to indemnify an employer against the default of an employé is to be most strongly construed against the surety.

The bond in this case provided that upon 'becoming aware of any act which may be made the basis of a claim' under such bond 'the employer shall give immediate notice thereof to the surety at its home office' by telegraph and by registered letter, and within 90 days after the date of such notice shall file with the surety an 'itemized claim' under said bond. It further provided that no action to recover from the surety any claim under said bond should be brought 'unless commenced within a period of 12 months after the date the employer shall have given notice of claim.'

Held applying the foregoing rule of construction, that suit may be maintained in such a case when commenced within a period of 12 months after the date upon which the employer has filed with the surety his 'itemized claim,' and that such action is not barred because not commenced within a period of 12 months after the date upon which the employer gave notice that he had become aware 'of any act which may be made the basis of a claim' under such bond.

A misappropriation of funds does not necessarily mean a misappropriation of actual cash, because 'funds' is a much more comprehensive term, and may include other assets or property.

When a cashier of a bank puts his note, which is of no value, in such bank, and issues a certificate of deposit of the bank in a like amount to another in payment to him of the purchase price of property which the cashier is purchasing for himself, the transaction is in legal effect the same as if such cashier had taken the money of the bank and used it in the purchase of such property.

Where it is proven that a cashier of a bank has 'loaned' to himself, without authority, excessive amounts of the bank's funds, without taking security therefor, and that his bills receivable are considerably less in their aggregate amount than his bills receivable account carried on the books of the bank, it cannot be said that it has not been proven that he has misappropriated the funds of the bank, and the fact that he placed his worthless notes in the bank for the amount of the funds used or taken by him does not affect the substance of the transaction, nor change its real character.

In order that liability may attach on a bond conditioned to insure an employer against 'fraud and dishonesty including larceny or embezzlement, forgery, and misappropriation of funds, by an employé, it is not necessary for the employer to introduce such evidence as would be necessary to convict the employé of the crime of larceny or embezzlement as defined by the laws of this state.

Where separable amounts are erroneously included in a judgment, a remittitur of the amounts so erroneously included may be permitted in lieu of a new trial.

COUNSEL Fred T. Myers, of Tallahassee, for plaintiff in error.

Francis B. Winthrop and W. J. Oven, both of Tallahassee, for defendant in error.

This action was brought by the defendant in error against the plaintiff in error on a bond given by Alonzo D. Wilder, as principal, to the Sopchoppy State Bank, upon which the National Surety Company, as surety, agreed to reimburse said bank within three months after proof of loss, for any pecuniary loss sustained by it because of the fraud and dishonesty, including larceny or embezzlement, forgery and misappropriation of funds of the said Wilder while in the employ of said bank, during the term commencing on the 1st day of April, 1912, at 12 o'clock noon, and ending on the 1st day of April, 1913, at 12 o'clock noon.

The declaration consists of several common counts in assumpsit, and a special count upon the bond. The special count with exhibit B attached thereto and by reference made a part thereof, omitting formal parts, is as follows:

'Alexander H. Williams, as receiver of the Sopchoppy State Bank, a corporation organized and existing under the laws of the state of Florida, and heretofore doing a general banking business in the town of Sopchoppy, in the county of Wakulla, in the state of Florida, plaintiff, by authority of the court first had and obtained, sues National Surety Company, a corporation organized and existing under the laws of the state of New York, with its principal office or place of business in the state, county, and city of New York, and Alonzo D. Wilder, the defendants, for that:

'First. Whereas, on the 12th day of April, A. D. 1912, the said defendant National Surety Company being then and there licensed by the state of Florida to be and become surety on surety bonds of the class and character hereinafter mentioned in the state of Florida, did for the consideration of the sum of $25 to it in hand paid on the said 12th day of April, A. D. 1912, make and deliver its certain bond, or writing obligatory under seal (a copy of which is hereto attached marked Exhibit 'A' and prayed to be taken as part hereof by reference) in the sum of $10,000 lawful money to be paid to the Sopchoppy State Bank, to which writing obligatory under seal or bond the said defendant Alonzo D. Wilder was a party, and that upon the strength, faith, and credit of said bond or writing obligatory, under seal, and the covenants and provisions therein contained, the said Alonzo D. Wilder was taken and kept for the time hereinafter mentioned in the employ of said Sopchoppy State Bank; that in and by said bond, or writing obligatory, under seal, the said defendant National Surety Company did agree to reimburse the said Sopchoppy State Bank as the employer therein named within three months after satisfactory proof of loss for any pecuniary loss sustained by the said Sopchoppy State Bank as such employer by any act of fraud and dishonesty, including larceny or embezzlement, forgery, and misappropriation of funds committed by the said Alonzo D. Wilder, designated in the said bond, or writing obligatory, under seal, as the employé, while the said employé was in any position in the service of the said Sopchoppy State Bank during the term commencing on the 1st day of April, A. D. 1912, at 12 o'clock noon and ending on the 1st day of April, A. D. 1913, at 12 o'clock noon, it being provided in said bond, or writing obligatory, under seal, that the following conditions should be precedent to any recovery thereunder:

'(1) That the employer has no knowledge that the employé has been in arrears or in default in any position whatever; that if the employer or any officer becomes aware of the employé gambling, speculating, or committing any disreputable, lewd, or unlawful act, the surety shall be immediately notified thereof in writing at its home office, and that no act giving rise to a claim thereunder shall be condoned, nor any loss settled, without the written consent of the surety first being obtained.

'(2) Upon becoming aware of any act which may be made the basis of a claim hereunder the employer

...