Los Angeles Athletic Club v. United States Fidelity & Guaranty Co.

This action was brought to. recover on a bond or policy of fidelity insurance. The plaintiff employed one Walter L. Patterson as manager of its clubhouse at a salary of three hundred dollars per month, with the express agreement “that he was to receive no other remuneration, perquisites, or consideration,” and “that he should pay the customary price or charge so fixed by plaintiff for every article of said goods, wares, and merchandise said Patterson should receive for himself and use to his own benefit”; and further, “that he was not, under any circumstances, to take, use, or receive for his own benefit any articles of goods, wares, or merchandise kept in stock by plaintiff as aforesaid without paying therefor the full price fixed by plaintiff as the selling price thereof to the members of. its said club. ’ ’

The defendant, a fidelity insurance company, for consideration, insured plaintiff against any pecuniary loss that might be sustained by reason of the fraud or dishonesty of said Walter L. Patterson up to and including the amount of five thousand dollars.

It stands admitted by the pleadings that Patterson was in the employment of the plaintiff, under the agreement as…