Max J. Winkler Brokerage Co. v. Fidelity & Deposit Co.

Citations

• 119 La. 735
• 44 So. 449
• 1907 La. LEXIS 546

Syllabus

<p>1. Insurance — Indemnity Policy — Renewal —Liability—Application.</p> <p>Upon being solicited by a brokerage firm ■to execute in its favor an indemnity bond to secure it from loss for one year from acts of larceny and embezzlement by a person whom it proposed to take into its employment, a fidelity insurance company forwarded to it for signature a written application for that purpose, ac•companied by a number of questions for it to .answer, among them the following: “Have you knowledge of any habit of the applicant, or any •circumstances unfavorable to the issuance of .the bond applied for? If so, state particulars. Is there now to your knowledge any shortage •due? Has he ever been short to you? Is he in debt to you?” To which questions the applicant truthfully answered, “No.” The company then executed a bond expiring on the 1st of April, 1904.</p> <p>Just before the date of the expiration of the bond the company wrote the firm, notifying it that the bond was about to expire, requesting remittance of continuance premium, and asking it to sign the certificate which accompanied its ■notification and forward the same to it, when the continuation receipt would be sent to it. The firm filled out the certificate which was ■sent to it, and, after signing it, returned it to the company. The continuation receipt was then sent to the firm. It subsequently appeared that the employe was guilty of larceny or embezzlement partly during the first year of the bond and partly during the continuance of the bond after the expiration of the year. The firm •claimed that the company was responsible for the losses during both periods. The latter resisted the claim. The district court and Court of Appeal sustained the claim of the firm on the ground that the statements made in the continuation certificate were representations, and not warranties, and under the terms of the policy they did not have the effect of a warranty if honestly answered. Held error. The company was not liable for