American Surety Co. v. Pauly (No. 2), 170 U.S. 160 (1898)

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American Surety Co. v. Pauly (No. 2)

No. 169

Argued January 7, 1898
Decided April 18, 1898
170 U.S. 160

ERROR TO THE CIRCUIT COURT OF

APPEALS FOR THE SECOND CIRCUIT

Syllabus

This was an action upon a bond guaranteeing a national bank against loss by any act of fraud or dishonesty by its President. The bond was similar in its provisions to the one referred to in the case preceding this, and contained among other provisions the following:

Now therefore in consideration, . . . it is hereby declared and agreed, that subject to the provision herein contained, the company shall, within three months next after notice, accompanied by satisfactory proof of a loss, as hereinafter mentioned, has been given to the company, make good and reimburse to the employer all and any pecuniary loss sustained by the employer of moneys, securities or other personal property in the possession of the employ, or for the possession of which he is responsible, by any act of fraud or dishonesty on the part of the employee in connection with the duties of the office or position hereinbefore referred to, or the duties to which in the employer’s service he may be subsequently appointed and occurring during the continuance of this bond and discovered during said continuance, or within six months thereafter and within six months from the death or dismissal or retirement of the employ from the service of the employer, it being understood that a written statement of such loss, certified by the duly authorized officer or representative of the employer, and based upon the accounts of the employ, shall be prima facie evidence thereof.

Held:

(1) That this language was susceptible of two constructions, equally reasonable, and that the one most favorable to the insured should be accepted, namely, that the required written statement of loss arising from the fraud or dishonesty of the president of the bank, based upon its accounts, was admissible in evidence if suit was brought, and was prima facie sufficient to establish the loss.

(2) That within the meaning of the bond in suit, the president of the bank remained in its service at least up to the day on which the receiver took possession of books, papers and assets.

The case is stated in the opinion.