90 N.Y.S. 893 | N.Y. App. Div. | 1904
The judgment and order should be affirmed, with costs.
The action was brought upon bonds given by- the defendant, as surety for one Tipton, the secretary and treasurer of the Switch-men’s Union, represented by the plaintiff, to recover an amount' misappropriated by Tipton-. There were two bonds, -one given January 11, 1899, and -the other June 5, 1900. The -whole amount misappropriated was $2,638.89. The jury by a special verdict found that $1,035' of this amount was misappropriated during the time the first bond was in force and before the second bond was given ; concededly the remaining $1,603.89 was misappropriated after the second bond was given and while it -was in force. The theory Of the plaintiff, presented, by its complaint and upon the' trial, is' that the second bond was not a separate and'distinct one, ', but was a renewal of the first one, a continuance of the original liability in an increased amount, and for that reason, among, others, the $1,035 was recoverable e'ven though misappropriated before the second bond was given. It seems to us, however, that this amount is recoverable even regarding the bonds, as separate and distinct obligations. A determination of this question involves a construction of some of the language of the- bonds. They both alike provide that the defendant shall be liable for moneys misappropriated, and now we quote, “occurring during the continuance of this bond' or any renewal thereof and discovered during said continuance or within six‘months thereafter, or within six months from the death or dismissal or retirement.of the employee from the service of the said employer.” And again, “ That the Company, upon the execu-' tian of this- bond, shall not thereafter be responsible to the -employer, under any bond previously issued to the employer on behalf of said employee, and upon the issuance of any bond subsequent hereto upon'said employee in favor .of said employer, all, responsibility hei'eunder shall cease and determine, it being mutually understood that it is the intention of this .provision that but one (the last) bond shall be in force at one time, unless otherwise stipulated between the employer and the Company.”
" First, it is said that the misappropriation of this $1,035 was not discovered within the time -provided in the bond as above quoted, and, therefore, it cannot be recovered. The second bond was given
There is no reason under this provision of the bond, therefore, why this amount should not be recovered. Second, it is said that no recovery can be had of this amount under the second bond, by reason of the provision above quoted, the misappropriation having occurred before such bond was given, and this is true. But a recovery can be had for this amount under the first bond, and nothing in the provision above quoted forbids such recovery. The language is that “ upon the issuance of any bond subsequent hereto * ■* * all responsibility hereunder shall cease and determine” wall then it is added that the intention is that but one bond shall be in force at one time. In this case the defendant was liable under the first bond for this $1,035 before the second bond was given, though the discovery of the misappropriation had not been made. The defendant did not, upon giving the second bond, become liable thereunder for this amount upon discovery of the misappropriation. Was it the intention of the provision quoted to release the defendant, upon the giving of the second bond, from all liability for the money which had been misappropriated, but not then discovered ? The language of the former provision quoted implies that the defendant would be liable for money misappropriated during the continuance of the first bond, though not discovered for six or more months thereafter. So that if the first bond had been terminated for any other reason than because another one was given, the liability would continue beyond the continuance of the bond, until the discovery of the misappropriation. It is not .reasonable to suppose that in the same bond the provision was made that a liability thereunder not discovered at the time a subsequent bond was given would be canceled by the giving of such subsequent bond.
The more reasonable construction of the provision quoted is that the intention was to terminate all responsibility under the first bond upon the issuance of the second one, so far as future misappropriation was concerned, so that there should be but one bond in force at
So much for the right to recover this $1,035. It is said that no recovery can be had of the $1,603:89 under the second bond because the employer’s certificate, made when that bond was given, constituted a warranty of the facts therein stated, or at least a misrepresentation of facts upon which the defendant relied in issuing the bond. The difficulty about this contention is that in either case it must appear that the statements .made were untrue, otherwise there would be no breach of the warranty, and no ground for defeating the bond by reason of false, representations. The statements' as to the employee’s former conduct, performance of his duties, keeping of his accounts and freedom from default, are stated upon the best of the knowledge and belief of the employer, and it is not claimed that .the plaintiff or those representing him had any knowledge, .information or suspicion at that-time that the employee was not perfectly honest and reliable. •. ~
The statement that his accounts Were found on examination to' be correct up to .that time was true. They did not discover for months thereafter that he had 'misappropriated this $1,035 prior toi the giving of the second bond. There was no absolute statement that he was honest, or reliable or free from default, or that his accounts were correct. The statement was to the best of the employer’s knowledge and belief and there is no reason for saying such state-' ments were untrue,, or that liis employer had any idea that he was not just what he should be.
Our conclusion is that the judgment and order should be affirmed.
All'concurred.
Judgment and order affirmed, with costs.