Ætna Casualty & Surety Co. v. Finance Service Corp.
Ætna Casualty & Surety Co. v. Finance Service Corp.
Opinion of the Court
delivered the opinion of the court.
The defendant in error had judgment against the plaintiff in error in an action upon a bond, on which the plaintiff in error was surety, to indemnify the said Finance Corporation against loss of money by reason of the acts of the employe- in connection with the duties of bookkeeper and stenographer for the said corporation.
The defense was that in the application for the bond, made by the plaintiff in behalf of said employe, answers were required to certain questions propounded in the blank, and that some of the answers were false in material mat
Counsel for defendant in error contend that this question properly understood, was truthfully answered, in that no one, holding the position of cashier, other than the employe in question, handled any funds. Counsel urge that “no act should be considered a breach of the condition which involved nothing more than the receipt of money by an intermediary subject to the ultimate control by Mrs. Eagan.” He contends that “the handling of funds by the cashier, bookkeeper and stenographer meant more than the mere receipt of money; it means the' control thereof by Mrs. Eagan, or the general manager, until its deposit in the bank.” In other words, counsel’s view is that “handling the funds” means having possession of them by right of office, — the position of cashier. We cannot accept this construction of the language used. The evident purpose of the inquiry was to determine what risk the surety would take in agreeing to indemnify the obligee for loss from the acts of Mrs. Eagan in the position named. So far as the risk is concerned, it is wholly immaterial in what capacity any one, other than the cashier, received funds for which she was to be held responsible.
In the application, immediately above the signature of the defendant in error, appears the following: “The above answers are to be taken as conditions precedent to and a basis of said bond applied for, or any renewal or continuation thereof, or any other bond, that may be executed by The ¿Etna Casualty and Surety Company to the undersigned in behalf of the applicant above named.”
In the bond in suit appears the following: “Whereas, the obligee has delivered to the company certain statements in writing relative to the honesty and duties and accounts of the employe, and other matters which, together with any other statements in writing by the obligee hereafter required by or made to the company, are warranted by the obligee to be true, and do and shall constitute and form the basis of this contract and the basis of renewals in whole or in part of any specific guaranty now or hereafter expressed herein.”
This court is committed to the doctrine “that a misrepresentation material to the risk, made in response to a specific inquiry, upon which an obligor relies, to his injury avoids the policy, at the option of the latter.” American B. & T. Co. v. Burke, 36 Colo. 49, 85 Pac. 692; U. S. Fidelity & Guaranty Co. v. Downey, 38 Colo. 415, 88 Pac. 451, 10 L. R. A. (N. S.) 323, 120 Am. St. Rep. 128.
The judgment is accordingly reversed, with directions to dismiss the cause.
Mr. Justice Allen and Mr. Justice Burke concur.
Reference
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- Ætna Casualty and Surety Co. v. Finance Service Corporation
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