Commercial Casualty Insurance v. Champlin Refining Co. ( 1934 )

The Champlin Refining Company, as plaintiff, recovered a judgment in the district court of Garfield county, against the defendant, Commercial Casualty Insurance Company, as surety on a bond indemnifying plaintiff from any loss that might arise through the embezzlement or larceny of money or goods by one Arthur I. Quinby, an employee of plaintiff. The parties will be hereinafter referred to as they appeared in the trial court.

On appeal there is but one issue presented for determination. Defendant contends that plaintiff did not comply with condition No. 4 of the bond, which is as follows:

"That in the event of any claim being made hereunder, the Employer shall, at the request of the Surety, immediately lay information before the proper authorities for the arrest of such employee and lend every assistance (except pecuniary) which the Surety may require in the apprehension and prosecution of said employee, and give every assistance which the Employer may be able to render in any civil action which the Surety may bring against the employee on account of said claim, whether the action is brought by the Surety previous or subsequent to its paying such claim."

No evidence was introduced. The cause was tried on a stipulation of facts, the material portion thereof being as follows:

"1. That on March 23, 1927, defendant executed the fidelity bond described in plaintiff's petition, and that the same was in force and effect upon the dates therein alleged.

"2. That plaintiff suffered a loss under the terms of said bond in the sum of $717.60, as alleged in said petition.

"3. That thereafter, on July 26, 1927; January 22, 1928; March 5, 1929, and June 10, 1927, defendant made written demand to induce plaintiff to institute criminal proceedings against said principal, Arthur I. Quinby, and that plaintiff laid the facts before the proper County Attorney, who refused to cause a warrant to issue unless plaintiff or one of its agents would sign an information, and that plaintiff refused to sign an information."

A jury was waived and the cause tried to the court. It is shown that the embezzlement occurred at Sun City, Kan., and the applicable Kansas statute is paragraph 2, art. 8, c. 62, Revised Statutes of Kansas (62-802), which provides:

"Informations may be filed during term time or in vacation in any court having jurisdiction of the offense specified therein, by the prosecuting attorney of the proper county as informant. * * * All informations shall be verified by the oath of the prosecuting attorney, complainant, or some other person."

It is noted that under the express provisions of the statute, it is not required that the information be signed by the complaining witness; nor under the express provisions of the bond is there a requirement that a complaint or information shall be verified by the assured. By the terms of the above condition of the bond, defendant is only required to "immediately lay information before the proper authorities for the arrest of such employee and lend every assistance which the surety may require in the apprehension and prosecution of said employee."

By the provisions of section 10613, O. S. 1931, a compensated corporate surety cannot invoke the rule of strictissimi juris. Metropolitan Casualty Ins. Co. v. United Brick Tile Co., 167 Okla. 402, 29 P.2d 771. The contract of guaranty should be liberally construed.

There is no requirement that plaintiff should sign an information or complaint against the employee. There is no showing that plaintiff has failed to lend assistance to the surety in the apprehension and prosecution of the employee.

The position of the defendant is purely technical, and plaintiff has substantially complied with the necessary requirements fixed by the terms of the bond.

The judgment of the trial court is affirmed.

RILEY, C.J., CULLISON, V. C.J., and SWINDALL, BAYLESS, and BUSBY, JJ., concur. McNEILL, J., dissents. ANDREWS and WELCH, JJ., absent.