Fidelity & Deposit Co. v. Port of Seattle

An' appeal' was taken from a judgment of the'district court in an action brought by appellee Port of Seattle on a bond issued -by ■ appellant surety company. The action ' was. .commenced' in the . Superior Court, of .the State óf. Washington, and ;was 'removed to the district court on the ground of diversity of citizenship. It' was there tried' by the court after a'jury had been waived. ' Written findings of fact and conclusions of law were made ,and •judgment was. made .and entered thereon for appellee-plaintiff in the amount of ,$50,000 with interest 'from October 17'. 1934. ■'' ''"

The trial court found, among other things, that on February 21, 1922, one Matt H. Gormley was the auditor of the Port of Seattle (hereinafter referred to as the Port) a duly organized port district of the State of Washington; that Gormley, as auditor of said Port, had charge of all the books of account of the Port and of the keeping thereof and had charge of the collecting of all funds received by the Port and of depositing them with the Treasurer of King County, State of Washington; that on February 21, 1922, Fidelity and Deposit Company of Maryland (hereinafter referred to as the Company) executed…

(dissenting).

I conceive that the majority opinion fundamentally errs by favoring appellant with an exceedingly narrow construction of provisions written by such company in a bond. I know of no rule of law, and the parties cite none, requiring us to bestow such a benefit on the company.

The company agreed . “to indemnify and save harmless * * * [appellee] from any and all loss which it may sustain” in any of the following contingencies: (1) Failure of any employee named therein “to faithfully perform such duties as may be required of him from time to time”; (2) failure of such employee “to account for all funds * * * which may come into his possession belonging to” appellee; or (3) commission by such employee “of any fraudulent or unlawful deed”. Each of these three clauses is connected with the conjunction “or” which obviously means that each is an independent undertaking of the company. There is not á word in the bond which permits the company to choose which clause it shall be liable upon, or which restricts the right of appellee to *784 make such a choice. The effect of the majority opinion, however, is to read such a provision into the bond. I think such construction is…