St. Paul Fire and Marine Insurance Co. v. Bank of Stockton

This action is for a Declaratory Judgment that plaintiff, St. Paul Fire and Marine Insurance Company (hereinafter called “Insurance Company”) has no liability to defendant Bank of Stockton (hereinafter called “Bank”) under the provisions of a so-called Blanket Bankers Bond on account of a forged signature to a Continuing Guarantee of an extension of credit wherein the bank sustained a loss.

Plaintiff Insurance Company issued to defendant Bank a so-called Blanket Bankers Bond providing in part as follows:

On September 18, 1959, one Stanley, a stranger to Bank, sought from Bank ■credit on automobile flooring contracts. Stanley’s financial statement was insufficient to warrant the credit he requested, so he brought with him as a guarantor ■one A. Vela, another stranger to Bank, whose financial statement was acceptable to Bank. (Exhibit E). A written form of Continuing Guarantee of $50,000.00 credit to Stanley was signed by Mr. Vela in the presence of Jack Tener, Manager of the Industrial Loan Department of Bank. Tener then gave the Guarantee to Vela with instructions that because of Mrs. Vela’s community property interest in the Vela property she would also have to sign the…