Rankin v. United States Fidelity & Guaranty Co.

Citations

• 86 Ohio St. (N.S.) 267

Syllabus

<p>Terms of bond — Construed to be effective — Rather than defeat the intention — Bond for year to indemnify bank — Against dishonesty of cashier — Continuation of bond for another year — Construed as executed for two years, when — Bank cashier wrongfully extends credit to depositor — Bondsmen liable to bank — Question of notice of liability toAiondsmen — Law of indemniñcation.</p> <p>1. When the terms of a bond clearly indicate the intention of the obligor and obligee that there shall be an indemnity to the latter oh account of the default of an employe, doubtful terms will be so construed as to effectuate rather than to defeat that intention.</p> <p>2. A bond being executed for one year to indemnify a bank against the dishonesty of its cashier occurring during the term of the bond, or any renewal thereof, and discovered within six months of such term, or renewal, and there being a subsequent instrument to continue the former in force for another year according to its terms and conditions, the instruments will be construed as though the bond had been originally executed for two years, there being no terms employed in either instrument to indicate the intention that an act of dishonesty occurring in the first year must be discovered within six months from the expiration of that year.</p> <p>3. When, the cashier of a bank, by a certificate which he knows to be false, extends to one as a depositor of the bank a credit to which he is not entitled, and this is done pursuant to an arrangement that the cashier shall derive financial benefit from the transaction, and loss to the bank results, there arises a liability upon a bond to indemnify the bank for all losses arising “from the fraud or dishonesty of the cashier amounting to embezzlement or larceny.”</p> <p>4. A provision in .a bond of that character requiring the obligee upon the discovery of an act which may create a liability under the instrument to give notice thereof to the obligor at “the earliest practical mome