289 Mass. 391 | Mass. | 1935
This is an action of contract brought on a policy of fidelity insurance covering defalcations of employees of the plaintiff. The case was referred to an auditor who heard no testimony, the parties having submitted a written statement, a copy of which is appended to the auditor’s report and is entitled “Agreed Statement of Facts,” in which it was stipulated and agreed that the facts therein stated were true and were all the facts pertinent to the case. The auditor found the facts stated to be true and made a general finding for the defendant.
These facts show that the parties entered into a fidelity insurance contract. The policy covered “such pecuniary loss of money, funds or other personal property (including that for which the Insured is responsible) as the Insured shall sustain by any act or acts of fraud or dishonesty ...” committed by employees of the plaintiff as described in the policy. The policy among other provisions provides in the “Schedule of Statements”: “7. No employee is or will be authorized to endorse checks on Insured’s behalf other than for deposit to the credit of Insured, except No exceptions. 8. No employee will be authorized to sign checks on behalf of' the Insured unless countersigned by another employee, except No exceptions. 9. All books, accounts, stocks and securities will be inspected and audited and verified with funds on hand or in bank by American Audit Company, at intervals of Quarterly.” During a certain period of time covered by the policy the assistant treasurer of the plaintiff was guilty of defalcations causing a loss to the plaintiff of $23,374.80. These defalcations were effected in the following manner: The “General Board” of the National Young Men’s Christian Association of New York for many years had conducted campaigns in
At the trial there was no evidence except the auditor’s report. The defendant excepted to findings and rulings
The terms of the policy relative to the auditing of the plaintiff’s accounts and to the countersigning of checks signed by employees were natural to the risk assumed by the insurer so that a strict compliance with those conditions by the insured was required to entitle the plaintiff to recover in the present case. Glidden v. United States Fidelity & Guaranty Co. 198 Mass. 109, 112, 113, and cases cited. It is not disputed that, as to the “World Wide Extension Account,” there was no compliance with the terms of the policy. The question presented then is whether that “Account” was an account of the plaintiff within the meaning of the policy. A strict interpretation of the language of the policy is that the accounts which were to be audited were only accounts of the plaintiff. The question on which the parties have joined issue is whether the plaintiff’s assistant treasurer, with the knowledge of the treasurer and general secretary, but without the authorization or the knowledge of the board of directors, had authority to open the “World Wide Extension' Account” in the name of the Boston Young Men’s Christian Association so as to make it an account of the insured within the meaning of the policy.
The plaintiff is a charitable corporation, and its treasurer has only the powers expressly conferred upon him by
The facts tend to show that in the beginning the special
The conclusion of the trial judge that the plaintiff did not violate any of the terms of the policy, violation of which would have prevented recovery in this action, was warranted in law.
It follows that the defendant’s exceptions are overruled and judgment is to be entered for the plaintiff in accordance with the findings of the trial judge.
So ordered.