First Thrift v. Pacific Indemnity Co.

WHITE, P. J. This is an appeal by plaintiff from a judgment of dismissal in favor of defendant, which judgment was entered after the former declined to amend its second amended complaint following the sustaining of a demurrer thereto with leave to amend.

This action was instituted to recover money under bankers’ blanket bonds issued by defendant to plaintiff.

Two bonds are involved on this appeal. They will be referred to herein as “first bond,” which was effective from [461]July 12, 1945, to January 3, 1947, and “second bond,” which was effective on and after January 3, 1947.

By its second amended complaint plaintiff alleged that it is a California corporation, duly licensed to do a finance and personal loan business, which business at all times pertinent hereto included discounting of various types of commercial paper and contracts. The defendant is a California corporation duly licensed to do a multiple line insurance business, and which business included the writing of various surety bonds.

On July 12, 1945, defendant issued to plaintiff the first bond, which was at all times in full force and effect from said date to January 3, 1947. On the last mentioned date defendant issued to plaintiff the second bond.

The first bond indemnified against loss: “through transferring or paying money or funds or transferring or delivering any securities or establishing any credit or giving any value on the faith of forged or altered written instructions or advices from any customer or from any banking institution.” (Emphasis added.)

The second bond covered any loss: “through transferring, paying, . . . etc. ... on the faith of any written instructions or advices, directed to the Insured, authorizing or acknowledging the transfer, payment, delivery or receipt of funds or Property, which instructions or advices purport to have been signed or endorsed by any customer of the Insured or by any banking institution but which instructions or advices either bear the forged signature or endorsement or have been altered without the knowledge and consent of such customer or banking institution.” (Emphasis added.)

The second amended complaint further alleged that during the period May, 1946, to March, 1947, one Sidney Weiss, a retail furniture dealer discounted purchasing contracts with plaintiff of the face value of $42,222.79. Payments were made under the contracts to May 14,1947, leaving a total balance due plaintiff of $24,833.09. That all contracts were forgeries was discovered May 14, 1947, as well as the fact that all payments up to that date had been made by Weiss himself. Plaintiff’s second amended complaint alleged that its total loss was $24,-833.09, the amount unpaid on the forged contracts, and that its loss up to January 3, 1947, under the first bond, was $15,-803.50. By its second amended complaint plaintiff made claim under both bonds. The limit of defendant’s liability under each of the aforesaid bonds was $10,000.