The employe is bound to reimburse the insurer for the loss sustained through him ; Fidelity & Casualty Co. of N. Y. v. Eickhoff, 63 Minn. 170, 65 'N. W. 351, 30 L. R. A. 586, 56 Am. St. Rep. 464 ; but, upon the payment of a loss, the insurer is subrogated to the rights of the employer in the prosecution of dishonest employes ; London Guar., etc., Co. v. Geddes, 22 Fed. 639. And a stipulation be tween the insurer and the employe that the evidence of the insurer to the employer should be conclusive evidence against the employe as to the fact and ex tent of his liability to indemnify the insurer, is void as against public policy ; id.
Where the indemnity was for one year, and it was provided that a claim under the bond or any renewal thereof should em brace only acts during its currency, it was held that each renewal was a separate con tract, and the discovery, during the term of the renewal of theft committed during the running of the bond under a previous renewal, would not make the company liable therefor, when the discovery was too late to hold the insurer under the bond on the re newal in force when the thefts were com mitted ; De jernette v. Casualty Co., 98 Ky. 558, 33 S. W. 828; and when it was provided that any claim under the bond should cover only defaults committed during its currency, and within twelve months prior to its dis covery, it was held that it did not cover a de fault committed more than twelve months • prior to such discovery which would have oc curred within the year but for the falsifica tion of the books within the year preceding ; Fidelity & Casualty Co. v. Bank, 71 Fed. 116, 17 C. C. A. 641; reversing Consolidation Nat. Bank of Philadelphia v. Casualty Co., 67 Fed. 874.
In American Surety Co. v. Pauly, 72 Fed. 470, 18 C. C. A. 644, on this subject, it was held (1) Where a policy stipulates for a no tification of the dishonesty of the employe as soon as practicable after the occurrence of the act, and the evidence as to when the dis honesty was discovered was conflicting, the question what is a reasonable time is for the jury. (2) It is not necessary to give notice of suspicions of dishonesty. (3) The fact that the insured corporation has passed into the hands of a receiver will not absolve the in surer from liability. (4) Where proof of loss under the bond Is set forth with reason able plainness and in a manner which a per son of ordinary intelligence cannot fail to understand, a failure to explicitly aver that a loss has been caused is immaterial. (5)
The fact that one member of a corporation was cognizant of an employe's dishonesty, and that fraudulent collusion existed be tween them, cannot make the corporation responsible for a false certificate of char acter issued by him without the knowledge of other directors ; American Surety Co. v. Pauly, 72 Fed. 470, 18 C. C. A. 644.
Guaranty Insurance. This term has some times been used to express indiscriminately the classes of insurance herein entitled Cred it, Fidelity, and Title Insurance. The latter designations are conceived to be better adapt ed to the subject-matter, and their employ ment is not only the better usage but un doubtedly leads to a clearer understanding of the varied subject-matter now involved in the law of insurance.
The expression "Guaranty Insurance" has, however, an extended use in England and Canada, and is there used to designate insurance of the integrity of employes, the phrase "policy of guaranty" being in fre quent use by the courts ; 7 Jur. N. S. 1109; 30 U. C. C. P. 360; 16 Can. L. J. 334; 14 L. C. Jur. 186.
The term is also used in a few English cases involving the guaranty of merchants against losses in business from the bank ruptcy, insolvency, or assignment with pref erence of their customers ; 7 H. & N. 5.
In an American case of a date long prior to the use of these modern forms of in surance, an action of debt was sustained upon a policy of insurance guaranteeing to the bearer the payment of a note, and it was held that there was authority to issue such a policy under charter powers such as were at that time conferred upon insur ance companies generally, and it was also held that the policy passed by delivery; Ellicott v. Ins. Co., 8 G: & J. (Md.) 166.
Title Insurance. A contract to indemnify the owner or mortgagee of real estate from loss by reason of defective titles, liens, or incumbrances.
Answers to questions in applications for such policies are held to amount to a war ranty and the question of materiality can not be raised ; Stensgaard v. Ins. Co., 50 Minn. 429, 52 N. W. 910, 17 L. IL A. 575.