28 S.D. 315 | S.D. | 1911
This is an action on a fidelity insurance policy containing these, among other, recitals, conditions, and provisions: “Whereas, Farmers’ & Merchants’ State Bank, Verdón, S. Dak-, hereinafter called ‘the employer,’ is employing or intends to employ James PI. Carroll in the capacity of assistant cashier, hereinafter called ‘the employe,’ and has filed with the United States Fidelity & Guaranty Company, hereinafter called ‘the company,’ an application specifying the amount of security required from said employe, and has applied to the company for the grant of this bond; and whereas, the company in consideration of the sum of $15, now paid as a premium from June 15, 1904, to June 15, 1905, at 12 o’clock noon, has agreed upon the terms, provisions and con
The transactions complained of are alleged to have occurred while James H. Carroll was in the plaintiff’s employ “as assistant cashier and acting cashier.” As its first defense, the defendant alleges in substance that when the policy was issued James H. Carroll was not an officer, director, or stockholder of the plaintiff
The following facts are undisputed or established by a clear preponderance of the evidence: When the policy sued on was issued, Milton Matthieu, J. B. Meharg, and John E. Carroll were the directors of the plaintiff corporation. Milton Matthieu was its president, J. B. Meharg its vice president, John E. Carroll its cashier, and James H. Carroll its assistant cashier. Milton Matthieu and J. B. Meharg continued in the same positions during the time covered by the policy. On October 10, 1904, the cashier, John E. Carroll, sold all his stock to James H. Carroll, and retired
But there was a change in the employe’s status in this case, not considered by the court in the Georgia decision. In that case
While I agree that the judgment of the trial court should be reversed, I cannot concur in the reasoning found in the foregoing opinion.
I consider the representations and promises made in the application for policy or bond immaterial, for the reason that such policy does not comply with the provisions of section 1855, Civil Code. . I cannot agree that the question is the effect of Carroll’s becoming owner of the larger portion of the stock, and becoming practically master of the corporation. So far as the appellant knew or seemed to care, at time of issuing bond, Carroll may have owned a large share of the stock, and been one of the directors. I apprehend a bonding company would consider the “moral hazard” less in the case of a party heavily interested in the welfare of the bank, than where such party had little or no interest therein.
On the other hand, I cannot agree that the Georgia case cited in the foregoing opinion has any application to the bond in this case. In that case the provisions of the. joolicy were such as to cover the acts of the employe, even when he ceased entirely to perform the duties of the position he occupied at time policy was issued. There was nothing in the policy before us that permitted the appointment of the employe to another position, and, while I believe that, under the principles laid down in Am. Tel. Co. v. Lennig, 139 Pa. 594, 21 Atl. 162, Nat. Mechanics’ Banking Ass’n v. Conkling, 90 N. Y. 116, 42 Am. Rep. 405, note, City of N. Y. v. Kelly, 98 N. Y. 467, 50 Am. Rep. 699, Reubens v. Joel, 13 N. Y. 496, and First Nat. Bk. of Baltimore v. Gerke, 68 Md. 449, 13