Phoenix Finance Corp. v. United States Fidelity & Guaranty Co.

INGLIS, J.

The complaint in this action alleges in substance that on May 17, 1934, the defendant issued to the plaintiff its surety bond to protect it against loss by reason of embezzlement by the plaintiff’s employees which might occur during the term of the bond and that that bond carried a rider which was made a part of the bond itself whereby the defendant also agreed to protect the plaintiff against similar loss which might have occurred during the term of a previous bond issued by The Metropolitan Casualty Insurance Company which loss might be discovered after the time limited in said prior bond for discovery of loss thereunder. It further alleges that there had been defalcations by an employee both after May 17, 1934, and also during the term of the prior bond which latter defalcations had not been discovered during the time limited in the former bond.

It is clear, therefore, that this action is not brought as claimed by the defendant under two separate bonds, that is the bond issued by the defendant and the bond issued by The Metropolitan Casualty Insurance Company which had been assumed by the defendant. Rather it is an action brought upon a single contract to wit: the bond issued by the defendant plus the rider thereon. The complaint therefore states but a single cause of action and should not be separated.

The motion to separate is denied.