The Kansas Flour Mills Company v. The American Surety Company of New York
| Decision Date | 08 July 1916 |
| Docket Number | 20,289 |
| Parties | THE KANSAS FLOUR MILLS COMPANY, Appellant, v. THE AMERICAN SURETY COMPANY OF NEW YORK, Appellee |
| Court | Kansas Supreme Court |
Decided July, 1916.
Appeal from Sedgwick district court, division No. 2; THORNTON W SARGENT, judge.
Judgment affirmed.
SYLLABUS BY THE COURT.
INDEMNITY--Bond--Innocent Mistake Not Included. A surety bond indemnifying a principal against loss sustained by "any act or acts of fraud, dishonesty, forgery, theft, embezzlement, wrongful abstraction or misapplication" on the part of an agent, does not extend to a loss occasioned by a simple mistake of the agent made without fraud in paying for merchandise which he had authority to buy.
T. A. Noftzger, George Gardner, and George W. Cox, all of Wichita, for the appellant.
R. R. Vermilion, Earle W. Evans, Joseph G. Carey, and W. E. Stanley, all of Wichita, for the appellee.
The plaintiff, a milling company, and the defendant, a surety company, submitted to the district court an agreed case involving the question whether or not the defendant was liable on a bond given to secure the plaintiff against loss through the conduct of an agent. The court rendered judgment for the defendant and the plaintiff appeals.
The agent, who had authority to buy and pay for grain, purchased a carload of wheat and by mistake and without fraud gave the seller the plaintiff's check for a sum greatly in excess of the price. The check was cashed and the excess was lost to the plaintiff because of the agent's error. The bond indemnified the plaintiff against loss of money or property sustained by "any act or acts of fraud, dishonesty, forgery, theft, embezzlement, wrongful abstraction or misapplication" on the part of the agent.
The plaintiff says the words "fraud," "dishonesty," "forgery," "theft" and "embezzlement" are superfluous, because whatever meaning they might have is embraced in the words "wrongful abstraction." Whatever force the word "wrongful" may have as indicating willfulness and bad purpose is spent on the word "abstraction" and is not carried over to the word "misapplication." "Misapplication" is wrong application, and the bond should not be interpreted to read "wrongful wrong application." The word "misapplication" speaks for itself and includes applications merely amiss and not vicious because of moral turpitude. The court is not willing to accept this...
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