Pacific Fire Insurance v. Pacific Surety Co.

Plaintiff is a fire insurance company having its office in the city of Yew York. Defendant is a corporation organized for the purpose of issuing indemnifying bonds to employers, guaranteeing the honesty of employees occupying positions of trust. Smith & Moody were the general agents for plaintiff in the state of California, with an office in the city of S.an Francisco. Upon October 21,1885, defendant issued its bond to plaintiff, guaranteeing the payment of all losses suffered by plaintiff through the fraud and dishonesty of its agents, Smith & Moody, and this bond was renewed for the year ending October 31,1887. In March, 1887, Smith & Moody failed in business, and at that time were indebted to plaintiff in the sum of $2,819.25, moneys collected by them as agents of plaintiff, which amount they converted to their own use, and this action is brought to recover from the agents and their surety, the appellant herein, the amount of such defalcation. Judgment went for the plaintiff in the lower court, and this is an appeal by the defendant surety company from the judgment and order denying a new trial.

*10 The trial court substantially found, among other matters, that the contract of…