Phillips v. U.S. Fidelity & Guaranty Co.

• Decision Date: 12 July 1963
• Docket Number: No. 3617,3617
• Citation: 155 So.2d 415
• Parties: C. E. PHILLIPS, Appellant, v. UNITED STATES FIDELITY AND GUARANTY COMPANY, a foreign corporation, Appellee.
• Court: Florida District Court of Appeals

Page 415

155 So.2d 415

C. E. PHILLIPS, Appellant, v. UNITED STATES FIDELITY AND GUARANTY COMPANY, a foreign corporation, Appellee.

No. 3617.

District Court of Appeal of Florida, Second District.

July 12, 1963.

Rehearing Denied Aug. 9, 1963.

Mack N. Cleveland, Jr., and Carroll Burke, Sanford, for appellant.

Monroe E. McDonald, of Sanders, McEwan, Schwarz & Mims, Orlando, for appellee.

GERMANY, JOHN, Associate Judge.

This is an appeal by the appellant, plaintiff in the trial court, from an order dismissing the third amended complaint without leave to amend. Appellant is seeking to recover from the appellee certain monies under a policy of insurance or employees' fidelity bond.

On May 5, 1953, the appellee, United States Fidelity and Guaranty Company, a foreign corporation, issued a certain policy of insurance or employees fidelity bond with C. E. Phillips and C. E. Phillips doing business as Produce Brokers Company, insuring against employee dishonesty with the limitation of $10,000.00. This policy of insurance in accordance with and in consideration of the agreed premium obligated the insurer to indemnify the plaintiff for all loss sustained during the policy period, in accordance with such and so many of the insuring agreements as are specifically designated by the insertion of the amount of insurance in the table of limits of liability. The policy provided:

'INSURING AGREEMENTS. Through any fraudulent or dishonest act or acts, committed anywhere by any of the employees acting alone or in collusion with others, including loss of money and securities and other property through any such act or acts of any of the employees, and including that part of any inventory shortage which the assured shall conclusively prove to have been caused by the fraud or dishonesty of any of the employees; provided that the company's aggregate liability as to all employees shall not exceed the limit of liability applicable to this Insuring Agreement I, subject, however, to the provisions of Section 9.'

Under the 'General Agreements' of the policy, and under paragraph B, it was provided:

'None of the insuring agreements of this policy shall apply to loss, damage or destruction caused or contributed to by any fraudulent, dishonest, or criminal act committed by a partner of the assured, whether acting alone or in collusion with others.'

Employee is defined as follows:

"Employee' or 'employees' means, respectively, one or more of the natural persons (except directors or trustees of the assured, of a corporation, who are not also officers or employees thereof in some other capacity) while in the regular service of the assured in the ordinary course of the assured's business during the policy period and whom the assured compensates by salary, wages and/or commissions and has the right to govern and direct in the performance of such service * * * but does not mean, brokers, factors, commission merchants, consignees, contractors or other agents or representative of the same general character.'

On or about the middle of 1956 the appellant, C. E. Phillips, doing business as C. E. Phillips Transportation Broker, entered into an agreement with R. S. Bates. This agreement referred to Phillips as 'employer' and to Bates as 'employee.' This instrument or agreement provided that the partners were to enter into a business in the field of transportation broker and that should the venture prove to be profitable the business would be incorporated under a designated name on or before July, 1957. The agreement provided also that Bates was entitled to 'draw' the sum of $100.00 per week on the account and that Phillips was entitled to draw the sum of $25.00 per week when away from the city of Sanford. The contract also provided that on July 1, 1957, there should be a proper financial accounting of any and all monies received and disbursed and should there be any profit as a result of the existence of the business the profits were to be divided equally between Phillips and Bates, based on the net profits. Bates was to be the active manager of the business operation and to furnish, 'if necessary,' accurate copies of the daily reports of all truckloads and other material and pertinent data and a record of all checks disbursed daily. It was further provided that all monies received by Phillips or Bates or any of their agents as a result of the business operation should be promptly deposited to the account of Phillips at the Florida State Bank in Sanford. Phillips was to furnish the capital necessary for the operation of the business and to maintain enough money in cash or accounts receivable to provide Bates an amount of money for labor and services and that Phillips should have the authority to draw out monies he desired during the existence of the contract, provided he made financial accounting therefor at the expiration of the contract. The contract further provided that before any division of profits would be made, Phillips should be reimbursed for any and all capital contributions...