Underwood v. Globe Indem. Co.
| Decision Date | 03 May 1927 |
| Citation | 156 N.E. 632,245 N.Y. 111 |
| Parties | UNDERWOOD v. GLOBE INDEMNITY CO. |
| Court | New York Court of Appeals Court of Appeals |
OPINION TEXT STARTS HERE
Action by Walter H. Underwood against the Globe Indemnity Company. From a judgment of the Appellate Division, First Department (217 App. Div. 63, 216 N. Y. S. 109), reversing on a question of law a judgment of the Trial Term entered on a verdict of the jury for plaintiff, and dismissing the complaint, plaintiff appeals.
Judgment of the Appellate Division reversed, and that of the Trial Term affirmed.Appeal from Supreme Court, Appellate Division, First Department.
Julian S. Eaton, Francis R. Holmes, and Martin B. Faris, all of New York City, for appellant.
F. A. W. Ireland, of New York City, for respondent.
Paul D. Shields and Frederick F. Bach were stockbrokers, carrying on business of copartnership at 27 Pine street, in the city of New York. On the 20th day of May, 1923, the Globe Indemnity Company issued a policy, called a brokers' basic blanket bond for stockbrokers, wherein the defendant insured Shields & Company against loss as therein specified. By the bond, the defendants agreed to indemnify the insured, and hold them harmless from and against any loss to an amount not exceeding $50,000 of money, currency, bullion, bonds, debentures, scrip, certificates, warrants, transfers, coupons, bills of exchange, promissory notes, checks, or other similar securities sustained by the insured, as follows:
‘(A) Through any dishonest act of any of the employees wherever committed, and whether committed directly or by collusion with others.
‘(B) Through larceny, whether common-law or statutory, robbery, burglary, holdup, theft, or other fraudulent means, or destruction, misplacement, or mysterious unexplainable disappearance while the property is within any of the insured's offices covered hereunder, or upon the premises of the insured's bankers in the United States or in any recognized place of safe deposit in the United States, or lodged or deposited in the United States for exchange, conversion, registration, or transfer, not including, however, the in-transit-risk.
‘(C) Through robbery, holdup, or theft, by any person whomsoever, while the property is in transit within 20 miles of any of the offices covered hereunder, and in the custody of any of the insured's partners, or any of the employees, or any messenger temporarily employed; or through negligence on the part of any such employee or messenger having custody of the property while in transit as aforesaid.’
The insured sustained a loss, which the courts below have held not to be within the terms of the policy. It occurred in this way. Michael J. Del Re, a bond salesman of the insured, employed at its office in 27 Pine street, received a telephone call in April of 1924 from a man named Dunn, in reference to some bonds which he desired to purchase. Del Re called upon him at a house in West End avenue, near Eighty-Eighth street, and received an order for $2,500 of Liberty bonds, together with 100 shares of stock. Three days later Del Re took the bonds to Dunn at the place mentioned, and delivered them to Dunn, receiving in return a check which he supposed to be certified, but which in fact was merely stamped as certified, being unsigned. It was a mere trick of Dunn's who was a thief, to get the bonds, as the check was valueless. Dunn skipped with the bonds, and has never been found. The face value of the bonds was $2,500. The amount of the check given was $4,500 or $4,700, being the price of the bonds and also the stock, which could not be delivered until paid for and transferred to Dunn's name.
Does the policy cover this loss? Looking at the undertaking as a whole, Shields & Co. were insured against the theft of bonds under certain named conditions. Clause A provided for a theft by an employee. This theft could occur in the office, or anywhere outside the office. If Del Re had stolen these bonds, the policy would have covered the case. Clause B covered a theft...
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