Hinkson v. Fireman's Fund Insurance

[234]Opinion

CHRISTIAN, J. Plaintiff Helen Hinkson, assignee of a claim of Liberty National Bank (now the Chartered Bank of London), appeals from a judgment denying recovery on an indemnity bond which had been issued to the bank by respondent Fireman’s Fund Insurance Company. We affirm the judgment.

The Bond

On March 11, 1971, Fireman’s Fund issued to Liberty National Bank a “Bankers Blanket Bond” on its Standard Form No, 24 (revised to April 1969). Under Insuring Agreement (E) of the bond, Fireman’s Fund agreed to indemnify and hold the bank harmless for: “Loss (1) through the Insured’s having in good faith and in the course of business, whether for its own account or for the account of others . . . purchased or otherwise acquired, accepted or received ... or given any value, extended any credit or assumed any liability, on the faith of, or otherwise acted upon, any securities, documents or other written instruments which prove to have been [¶] (a) Counterfeited or forged as to the signature of any maker, drawer, issuer, endorser, assignor . . . or as to the signature of any person signing in any other capacity . . . . [¶] The word ‘counterfeited’ as used in this Insuring Agreement shall be deemed to mean only an imitation of a security, document or other written instrument, as set forth in (a) above, which is intended to deceive or to be taken for an original.”

Section 2(e) of the bond’s “Exclusions” provides that “This Bond Does Not Cover: . . . (e) loss resulting from the complete or partial non-payment of, or default upon, [¶] (1) any loan or transaction in the nature of, or amounting to, a loan made by or obtained from the Insured, or [If] (2) any note, account, agreement or other evidence of debt assigned or sold to, or discounted or otherwise acquired by, the Insured whether procured in good faith or through trick, artifice, fraud or false pretenses unless such loss is covered by Insuring Agreement (A), (D), or (E). . . .”

The Space Data Loan

Space Data Sciences Corporation (hereafter Space Data) was engaged in the business of printing technical literature and manuals, providing technical writing and drawing services, and supplying part-time technical personnel.

[235]