Kean v. National Surety Co.

Martin, J.: This action was brought to recover $100,000 on a bond, issued to plaintiffs insuring them against loss of property in which, they have751 a pecuniary interest or for the loss of which they may be legally hable if sustained: “(A) Through any dishonest act of any of the Employees, wherever committed, and whether committed directly or by collusion with others; “(B) Through robbery, burglary, theft, hold-up, destruction or misplacement, while the Property is within any of the Insured’s offices covered hereunder, whether effected with or without violence, or with or without negligence on the part of any of the Employees; “ (C) Through robbery, hold-up or theft, by any person whomsoever, while the Property is in transit within twenty miles of any of the offices covered hereunder and in the custody of any of the Employees, or through negligence on the part of any of the Employees having custody of the Property while in transit as aforesaid.” Certain conditions and limitations on liability are stated in the bond; among others, the following: “ 12. This bond does not cover any loss resulting from any of the hazards specified in Paragraph ‘ C ’ in respect to United States Government Coupons Bonds, or United States Government certificates of indebtedness, or cash, unless such property shall be in transit under the following conditions: * * * “ (3) Where the par value of such property is in excess of the sum of Two Hundred and Fifty Thousand Dollars ($250,000) it shall be in the custody of a partner or regular employee of the Insured, who shall be continuously accompanied by two guards of twenty-four (24) years of age or more; provided, however, that if the partner or regular employee is twenty-four (24) years of age or more the guards may be -under the age of twenty-four (24) but not under twenty-one (21).” Plaintiffs have become liable to a customer for a loss of several hundred thousand dollars in United States bonds due to a street robbery occurring within twenty miles of their office and in another borough of the city of New York. The representatives of plaintiffs who were held up and robbed were not guarded as provided in subdivision 3 quoted above. At the trial there was practically no controversy as to the material facts. Defendant offered no testimony and both sides moved for the direction of a verdict. Decision was reserved and a verdict subsequently directed for plaintiffs for $100,000 and interest. In the course of business it became known to certain employees in plaintiffs’ office that on a stated day the bonds would be sent from that office located on Nassau street, borough of Manhattan, [752] for delivery to a customer in the borough of Brooklyn. The head runner, one DiGregario, who had a number of runners employed under him, told certain of his associates that there would be an opportunity for them to hold up and rob the persons making delivery of the bonds and the next day he divulged the time and other details connected with the transmission of the bonds, describing the messengers and giving other information which would enable his accomplices to perpetrate the robbery. It took place at the door of the office to which the bonds were being delivered. Later some of those concerned in the robbery were apprehended and DiGregario and others were convicted and sentenced to prison for long terms. It is convincingly shown that this employee was implicated in the robbery and it is apparent that the loss occurred through the dishonest act of an employee committed directly or by collusion with others, to paraphrase section “A” quoted above from the bond. Defendant points to limitations on its liability in the provision designated “ 3 ” but this is a subdivision of “ 12 ” which is expressly limited in its application to paragraph “ C.” It is not a limitation upon liability for losses such as are referred to in paragraph “A” as being due to the dishonesty of employees. We agree with the statement of the trial justice that “ It was because of the dishonest act of their employee that the plaintiffs failed to comply with the provisions of the bond respecting the presence of armed guards. I regard Clause A as a wholly independent provision, entirely unaffected by the exception contained in subdivision 3 of paragraph 12. The language of Clause A is very general in its terms and was intended, it seems to me, to cover the plaintiffs against loss resulting from dishonesty within its organization wherever or however committed. Moreover, if there is any doubt with respect to the meaning of any of the provisions of the contract it must be resolved against the defendant, as the instrument was prepared and drawn by it.” It further appears that there is no doubt as to the liability of plaintiffs to their customers for the loss of the bonds, inasmuch as plaintiffs were clearly negligent in allowing them to be transported without their being well guarded. We are unable to agree with defendant in the assertion that plaintiffs must rest on paragraph “ C ” inasmuch as there was a robbery outside of their place of business; for the primary cause of the holdup and the loss was the “ dishonest act ” of DiGregario “ committed directly or by collusion with others.” We believe that this bond was given to provide against loss [753] by plaintiffs due to such dishonesty and collusion, and that the judgment should be affirmed, with costs. Finch and Burr, JJ., concur; Clarke, P. J. and Merkell, J., dissent.