{ "id": 11271385, "name": "DIXIE FIRE INSURANCE COMPANY v. AMERICAN BONDING COMPANY", "name_abbreviation": "Dixie Fire Insurance Co. v. American Bonding Co.", "decision_date": "1913-05-28", "docket_number": "", "first_page": "384", "last_page": "392", "citations": [ { "type": "official", "cite": "162 N.C. 384" } ], "court": { "name_abbreviation": "N.C.", "id": 9292, "name": "Supreme Court of North Carolina" }, "jurisdiction": { "id": 5, "name_long": "North Carolina", "name": "N.C." }, "cites_to": [ { "cite": "40 L. R. A., N. S., 662", "category": "reporters:federal", "reporter": "L.R.A.N.S.", "opinion_index": 0 }, { "cite": "83 Am. Dec., 379", "category": "reporters:federal", "reporter": "Am. Dec.", "opinion_index": 0 }, { "cite": "96 N. C., 36", "category": "reporters:state", "reporter": "N.C.", "opinion_index": 0 }, { "cite": "83 Am. Dec., 380", "category": "reporters:federal", "reporter": "Am. Dec.", "opinion_index": 0 }, { "cite": "93 Mich., 81", "category": "reporters:state", "reporter": "Mich.", "case_ids": [ 1489229 ], "opinion_index": 0, "case_paths": [ "/mich/93/0081-01" ] }, { "cite": "80 Ky., 336", "category": "reporters:state", "reporter": "Ky.", "case_ids": [ 4397353 ], "opinion_index": 0, "case_paths": [ "/ky/80/0336-01" ] }, { "cite": "60 Neb., 29", "category": "reporters:state", "reporter": "Neb.", "case_ids": [ 2726215 ], "opinion_index": 0, "case_paths": [ "/neb/60/0029-01" ] }, { "cite": "133 N. C., 412", "category": "reporters:state", "reporter": "N.C.", "opinion_index": 0 }, { "cite": "110 Pa., 530", "category": "reporters:state", "reporter": "Pa.", "case_ids": [ 543740 ], "opinion_index": 0, "case_paths": [ "/pa/110/0530-01" ] }, { "cite": "92 N. W., 686", "category": "reporters:state_regional", "reporter": "N.W.", "opinion_index": 0 }, { "cite": "118 Iowa, 129", "category": "reporters:state", "reporter": "Iowa", "opinion_index": 0 }, { "cite": "133 N. C., 682", "category": "reporters:state", "reporter": "N.C.", "opinion_index": 0 }, { "cite": "69 Me., 105", "category": "reporters:state", "reporter": "Me.", "case_ids": [ 636332 ], "opinion_index": 0, "case_paths": [ "/me/69/0105-01" ] }, { "cite": "143 Mass., 129", "category": "reporters:state", "reporter": "Mass.", "case_ids": [ 772372 ], "opinion_index": 0, "case_paths": [ "/mass/143/0129-01" ] }, { "cite": "125 Mass., 374", "category": "reporters:state", "reporter": "Mass.", "case_ids": [ 730867 ], "weight": 2, "opinion_index": 0, "case_paths": [ "/mass/125/0374-01" ] }, { "cite": "48 Am. Rep., 421", "category": "reporters:state_regional", "reporter": "Am. Rep.", "opinion_index": 0 }, { "cite": "69 Miss., 70", "category": "reporters:state", "reporter": "Miss.", "case_ids": [ 1697591 ], "opinion_index": 0, "case_paths": [ "/miss/69/0070-01" ] }, { "cite": "33 Am. Rep., 671", "category": "reporters:state_regional", "reporter": "Am. Rep.", "opinion_index": 0 }, { "cite": "31 Am. Rep., 251", "category": "reporters:state_regional", "reporter": "Am. Rep.", "opinion_index": 0 }, { "cite": "106 U. S., 104", "category": "reporters:federal", "reporter": "U.S.", "opinion_index": 0 } ], "analysis": { "cardinality": 791, "char_count": 17625, "ocr_confidence": 0.467, "pagerank": { "raw": 2.950661004344278e-07, "percentile": 0.8488280590876147 }, "sha256": "e2e0ca4e29d5a2b3cbe442913253c61972d24c1714541f765a179e1aaa62d185", "simhash": "1:9a138d7fb06054cc", "word_count": 2996 }, "last_updated": "2023-07-14T16:55:37.824965+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [], "parties": [ "DIXIE FIRE INSURANCE COMPANY v. AMERICAN BONDING COMPANY." ], "opinions": [ { "text": "BeowN, J.\nThe facts, briefly stated, are that on 23 April, 1909, L. S. MacEnaney, a resident of the city of Chicago, entered into an agreement with the Dixie Eire Insurance Company of Greensboro, N. C., whereby he became the general agent for said company in the States of Illinois and Indiana for the purpose of writing and effecting fire insurance and collecting premiums and\u2019 remitting same to the Dixie Eire Insurance Company at its home office in the city of Greensboro. In said written contract of agency it was provided that the agent MacEnaney furnish to the Dixie. Eire Insurance Company a bond in the sum of $10,000 in some guaranty company acceptable to the said Dixie Eire Insurance Company for the faithful performance of his duties under the contract. McEnaney applied to the American Bonding Company of Baltimore for a. fidelity bond, and the same was executed by said bonding company and delivered to MacEnaney to be transmitted to the Dixie Eire Insurance Company, at its home office in the city of Greensboro, for its approval, which 'said bond the Dixie received, inspected, and approved. The bond covered a period from 1 February, 1909, to 1 February, 1910, and provided, among other things, \u201cthat if the employee shall in the position of general agent in the employer\u2019s service make good to the employer within thirty days any loss sustained to the employer by larceny or embezzlement committed by the employee during the term commencing on 1 February, 1909, at 12 o\u2019clock, noon, and ending on 1 February, 1910, at 12 o\u2019clock, noon, this obligation shall be null and void; otherwise, in full force and effect.\u201d\nThis action is brought to recover for a breach of the bond. We will not consider seriatim, the thirty-five assignments of error, but only such as we regard as pertinent in determining the real points of controversy.\nThere is no merit in the exception to the'issues. Those submitted embrace the controverted facts set out in the pleadings, and under them the defendant had opportunity to make every possible defense. McCall v. Galloway, ante, 353; Clark\u2019s Code, sec. 391.\nThe indemnity bond is a contract solvable\u2019 in North Carolina and is to be construed and enforced under the laws of that State. The bond was a sj>ecies of indemnity insurance in which the plaintiff was the beneficiary, taken out for its benefit and not for die benefit of its agency. It may have been taken out by MaeEnaney in Chicago, but it was intended by .defendant that it should be transmitted and delivered to plaintiff at its general offices in Greensboro, North Carolina.\nIt is provided in the written contract creating MaeEnaney an agent of the Dixie Eire Insurance Company, that Mac-Enaney shall furnish a general fidelity bond satisfactory to the company, and the evidence is undisputed that MaeEnaney obtained the bond from defendant and sent it t.o the Dixe Fire Insurance Company, at its home office in the city of Greensboro, where and when it approved and accepted same.\nThis State is, therefore, the locus pro solutions and the locus celebrationis of the contract. Pritchard v. Norton, 106 U. S., 104; Bell v. Packard, 31 Am. Rep., 251; Dickerson v. Edwards, 33 Am. Rep., 671; American Mortgage Co. v. Jefferson, 69 Miss., 70; Scott v. Perlee, 48 Am. Rep., 421; Millikan v. Pratt, 125 Mass., 374; Hill v. Chase, 143 Mass., 129; Bell v. Packard, 69 Me., 105.\nMillikan v. Pratt, supra, is a case which we think is directly in point, the facts in this case being that the plaintiff resided in Portland, Maine, and the defendant was the wife of Daniel Pratt and resided with her husband in Massachusetts. He, Daniel Pratt, asked credit of the plaintiffs, and they required a guarantee, which he procured, and .had the defendant, his wife, to execute the same at her home in Massachusetts, and there delivered it to her husband, who sent it by mail from Massachusetts to the plaintiffs in Portland. The plaintiffs received it from the postoffice in Portland. Chief Justice Gray. in discussing the locus celebrationis, used the following language :\n\u201cThe contract between the defendant and plaintiff was complete when the guarantee had been received and acted upon by them while at Portland, and not before. It must therefore be treated as made and to be performed in the State of Maine,\u201d citing cases to sustain this position.\nIn Minor on Conflict of Laws, page 372, this rule is laid down:\n\u201cNotes, deeds, and other contracts of that character do not become completed and binding contracts merely by the fact of the promisor\u2019s signing them. They must also be delivered. Hence, if the signing occurs in one State, while the delivery takes place in another, the latter State, not the former, is the locus celebrationis.\"\nHaving concluded that this State is the place where the contract is to be construed and performed according to the plain intention of the parties, it necessarily follows that it is immaterial to inquire whether under the laws of Illinois a breach of the bond has been proven.\nThere is evidence sufficient to be submitted to a jury that plaintiff\u2019s agent, MacEnaney, fraudulently and feloniously converted to his own use the sum of $5,007.21 of plaintiff\u2019s money, as found by the jury under the first issue. This constituted embezzlement under the law of this State. S. v. MacDonald, 133 N. C., 682.\nThe cause of action ds not barred for failure to give notice to defendant under section 3 of the contract.\nThe evidence was undisputed that the first information plaintiff had of the defendant\u2019s having collected the amount in controversy for and on behalf of the company, and refused to make good to it the amount so collected, was on 20 'January, 1910, and that on the 25th day of the same month the bonding company was notified by letter of the default of the agent Mac-Enaney. The facts being undisputed, it became a question of law to be passed upon by tbe court as to whether or not the delay of' five days in notifying the bonding company was unreasonable. May on Insurance, sec. 462; Joyce on Insurance. 3229.\nIn Building Co. v. Fidelity Co., 118 Iowa, 129, reported in 92 N. W., 686, it is held, that \u201ca delay of six or eight days in notifying a surety company of an employee\u2019s defalcation, where no prejudice resulted, was not as a matter of law a violation of the condition of the bond requiring immediate notice.\u201d Insurance Co. v. Hazen, 110 Pa., 530.\nThis provision of the contract Stating that the employer shall give the- surety immediate notice is not of a character to avoid the entire contract unless performed literally. It is not in the form of a condition or an express warranty, and therefore failure to strictly comply will not always prevent a recovery.\nAn examination of this bond shows that by its express terms a failure to comply with some of its provisions renders it void.. But failure to give immediate notice by telegraph is not expressly made a ground of forfeiture. The maxim exgressio urdus est exclusio alterius applies. Ostrander, sec. 223; Gerringer v. Insurance Co., 133 N. C., 412; Dixon v. Insurance Co., Ins. L. Journal, Dec., 1912, page 1863.\nIt-is declared in Joyce on Insurance, sec. 3282, referred to in this opinion, \u201cIf a policy of insurance provides that notice and proofs of loss are to be furnished within a certain time after loss has occurred, but does not impose a forfeiture for failure to furnish them within the time prescribed, and does impose forfeiture-for a failure to comply with other provisions of the contract, the insured may, it is held, maintain an action, though he does not furnish proofs within the time designated. Assurance Co. v. Hanna, 60 Neb., 29; Insurance Co. v. Downs, 80 Ky., 336; Steele v. Insurance Co., 93 Mich., 81.\nThis cause of action is not barred under section 9 of the contract, which provides that \u201cho suit of proceeding at law or in equity shall be brought against the surety after the expiration of six months from the end of the time during which, under the terms of this bond, the employer\u2019s claim may be filed with the surety.\nAs tbis contract is governed, by tbe laws of tbis State, it is subject to tbe statutes of North Carolina. Revisal, sec. 4809, forbidding tbe time for bringing suit on contracts of tbis character to less than one-year.\nTbis bond contains a clause, \u201cthat if tbe employee shall in tbe position of general agent in tbe employer\u2019s service make good to tbe employer within thirty days any loss sustained by tbe employer by larceny or embezzlement committed by tbe employee,\u201d etc.\nTbe undisputed evidence shows that tbe first intimation of loss as contemplated by tbe bond was on 20 January, 1910, and under tbe terms of said bond tbe agent,'MacEnaney, bad thirty days within which to make good to the company, to say nothings of tbe ninety days allowed the agent to make good under \u2022 tbe contract of agency.\nTbe action was commenced 1 February, 1911. His Honor correctly held that tbe action, according to all tbe evidence, was not barred by lapse of- time before 20 February, 1911.\nIt is contended that tbe court erred in admitting in evidence tbe duly certified r\u00e9cord of tbe municipal court of Chicago, a court of record, of the judgment of tbis plaintiff against the agent, L. S. MacEnaney, for $5,001.21. It must be admitted that tbe admission of this judgment record in an action against tbe surety company cannot be justified under our Re-visal, 285. We must resort to tbe precedents, and we admit they are in hopeless discord. In a learned note to tbe case of' Charles v. Hoskins, 83 Am. Dec., 380, tbe annotator, Judge Freeman, says:\n\u201cTbe question how far a judgment or' decree is conclusive against a surety of a defendant, or against one who is liable over to a defendant, and who was not a party to the action, is involved in tbe greatest confusion. Between tbe intimate relations which exist between such a person and tbe defendant in tbe suit, on tbe one side, and tbe fundamental principle that no one ought to be bound by proceedings to which be was a stranger, on tbe other, tbe courts have found it difficult to steer.\u201d\nIt seems that our predecessors in office upon tbis Bench have intimated, and in one case held, that such judgments, unaided by the statute, are inadmissible in evidence against the surety. Moore v. Alexander, 96 N. C., 36.\nBut an examination of the question has convinced us that the decided trend of modern authority is to the effect that such a judgment against the principal prima facie only establishes the sum or amount of the liability against the sureties, although not parties to the action, but the sureties may impeach the judgment for fraud, collusion, or mistake, as well as set up an independent defense. Charles v. Hoskins, 83 Am. Dec., 379, and notes. In the notes to this ease all the authorities are carefully reviewed.\nIn that case it is said: ' \u201cWhen one is responsible by farce \u2022of law, or by contract for the faithful performance of the duty of another, a judgment against that other 'for failure of the performance of such duty, if not collusive, is prima facie evidence in a suit against the party so responsible for that other.\u201d\nHis Honor* erred in admitting the declarations of Mae-Enaney, as the defendant MacEnaney was no party to this action, and if he had been his declarations would be competent only against himself. They were made some time after his agency had been terminated, and were no part of the res gestee.\nThe general rule is well settled that the admissions of the principal can only be received as evidence against the surety when they are made during the transaction of the business for which the surety is bound so as to become a part of the res gestee. Admissions and declarations made after the employment has ceased are not competent to bind the surety. Insurance Co. v. Bonding Co., 40 L. R. A., N. S., 662, and cases cited.\n- His Honor further erred in instructing the jury that \u201cthere is no controversy about the fact that he converted $5,007.21 of the plaintiff\u2019s money to his own use. The only question for you to decide upon is whether he did that with a fraudulent .intent.\u201d We find no such admission in the record. The judgment of the Chicago court was only prima facie evidence of the amount. It remained still a contested issue.\nNew trial.", "type": "majority", "author": "BeowN, J." } ], "attorneys": [ "A. L. Broolcs and Sapp & -Hall for plaintiffs.", "Alfred S. Wyllie a/nd Th\u00famas J. Shaw\u2022 for defendant." ], "corrections": "", "head_matter": "DIXIE FIRE INSURANCE COMPANY v. AMERICAN BONDING COMPANY.\n(Filed 28 May, 1913.)\n1. Issues Submitted \u2014 Issues Tendered.\nThere is no reversible error in refusing issues tendered by a party litigant, if those submitted present every phase of the controversy and permit every possible contention.\n2. Contracts \u2014 Indemnity Bonds \u2014 Acceptance\u2014Lex Loci Contractus.\nWhere a foreign corporation has issued a bond indemnifying a North Carolina concern against loss under a contract \"with an agency, located in another State, established to collect moneys, etc., as in this case, for insurance premiums, which bond was delivered to the agent to be sent to the indemnified here for 'approval and acceptance, the contract of indemnity is to be construed and enforced in accordance with our own law's.\n3. Principal and Agent \u2014 Embezzlement.\nWhere an agent intrusted by the principal to collect moneys has fraudulently and feloniously converted moneys thus collected to his own use, he is guilty of embezzlement.\n4. Principal and Agent \u2014 Surety\u2014Indemnity Bond \u2014 Notice of Default \u2014 Reasonable Notice.\nWhere a contract of indemnity only provides that the indemnified give immediate notice of the default of an agent in accounting for moneys, for which the indemnifying company is liable under its bond, a failure of strict compliance in giving the notice will not always prevent a recovery, the provision not being in the form of a condition, or an express warranty.\n5. Same \u2014 Questions of Law \u2014 Notice Sufficient.\nThe plaintiff sues the defendant on its bond indemnifying against loss by reason of an agent\u2019s defalcation in failing to account for moneys collected, wherein it was provided that, immediate notice be given the indemnifying company of such default. It was not disputed that this notice was given five days after the knowledge thereof of the plaintiff: Held, the reasonableness of the notice is a question of law, and the time thereof in this case is sufficient.\n6. Same \u2014 Interpretation of Contract \u2014 Expressio Unius.\nWhere an indemnifying bond requires immediate notice of the default indemnified against, but does not make the failure to give this notice a ground of forfeiture, as expressed in relation to other and different requirements therein, the maxim expressio unius est exolusio alterkis applies, and a reasonable notice will be sufficient for enforcing the bond.\n7. Principal and Surety \u2014 Indemnity Bond \u2014 Limitations of Actions\u2014 Interpretation of Statutes.\nSuits upon an employee\u2019s indemnity bond are regulated by Re-visal, sec. 4809, forbidding the time for bringing suits on contracts of this character to less than one year; and a provision therein is void which required that no suits \u201cor proceedings at law- or in'equity shall be brought against the surety after the expiration of six months from the end of the time during which, under the terms of this bond, the employer\u2019s claim may be filed with the surety.\u201d\n8. Principal and Surety \u2014 Indemnity Bonds \u2014 Judgment Against Principal \u2014 Prima Facie Case \u2014 Rebuttal Evidence \u2014 Defenses\u2014Interpretation of Statutes. \u2019\nIn an independent action against a surety on its indemnity bond, a judgment against the principal is prima fade evidence of the sum or amount which the surety is thereon obligated to pay, although the surety is not a party, which the surety may impeach for fraud, cqllusion, or mistake, or he may also set up an independent defense. Revisal, sec. 285, has no application.\n9. Principal and Agent \u2014 Surety\u2014Declarations of Agent \u2014 Evidence.\nIn an independent action against a surety on a bond indemnifying against an agent\u2019s default, the declarations of the agent, the principal on the bonds, are incompetent.\n10i Principal and Surety \u2014 Judgments\u2014Prima Facie Case \u2014 Instructions \u2014 Admissions\u2014Appeal and Error.\nThe judgment against the principal on an indemnity bond being only prima fade evidence of the amount due by the surety for his alleged default thereunder, an. instruction in this ease is held for reversible error, that there was no controversy about the fact that this principal had defaulted in a certain sum, no such admission appearing, and the issue being contested.\nAppeal by defendant from Peebles, J., at January Term, 1912, of GutleoRD.\nCivil action, tried upon these issues:\n1. Did the defendant L. S. MacEnaney, while acting, as general agent of the plaintiff, collect and receive as such agent for and on behalf of the plaintiff the sum of $5,007.21 between the first day of February, 1909, and the first \u2018day of February, 1910, and fraudulently convert the same to his own use, as alleged in the complaint? Answer: Yes.\n2. \"Was the defendant L. S. MacEnaney guilty of larceny or embezzlement under the laws of the State of Illinois by reason of the acts and things alleged in the complaint? Answer: No.\n3. Is the plaintiff\u2019s cause of action barred by the statute of limitations? Answer: No.\n4. What amount, if any, is the plaintiff entitled to recover of the American Bonding Company of Baltimore on account of its general fidelity bond herein sued upon; executed and delivered to the plaintiff on 24 April, 1909? Answer: $5,007.21, and interest from 4 March, 1910.\nFrom the judgment rendered the defendant American Bonding Company appealed.\nA. L. Broolcs and Sapp & -Hall for plaintiffs.\nAlfred S. Wyllie a/nd Th\u00famas J. Shaw\u2022 for defendant." }, "file_name": "0384-01", "first_page_order": 428, "last_page_order": 436 }