Pacific Coast Adjustment Bureau v. Indemnity Insurance

This is an action based upon a bond issued by the appellant Indemnity Insurance Company of North America to the respondent whereby appellant bound itself to pay to the respondent “any direct financial loss, that it may sustain by reason of any act of larceny, embezzlement, theft or any other fraudulent or dishonest act, wrongful abstraction or wilful misapplication”, committed during the term of the bond by any employee covered by the schedule attached to the bond. A jury returned a verdict for plaintiff. Judgment was entered with certain interest and defendant appealed. The bond provided: “When the Assured discovers a loss hereunder, written notice of same shall be delivered to the Company and within ninety (90) days thereafter an itemized statement of claim shall be furnished to the Company. . . . This bond shall terminate, as to any employee, upon the discovery by the Assured of a loss through or on account, of such employee.”

Respondent is engaged in the adjustment of losses for insurance companies. Its main office is in San Francisco, but it has branch offices located at points throughout the western states. Each branch office is in charge of a branch manager, and at each…