
    Abraham Adelberg and Morris Berman, Doing Business Under the Firm Name of Adelberg & Berman, Respondents, v. The United States Fidelity & Guaranty Co., Appellant.
    (Supreme Court, Appellate Term,
    November, 1904.)
    Indemnity bond covering defaults of employee — Failure of employee to sign bond as therein required — Employer’s duty to procure such signature — Effect of renewal of bond on original conditions.
    Where a bond of indemnity, covering specific defaults of an employee, specifies that it is “ to be invalid and of no force unless signed by the Employee ”, such signature is essential and there can be no recovery on a bond not so signed.
    Although there is nothing in the bond to indicate by whom the signature is to be procured, the indemnified cannot complain of hardship by reason of a holding that the bond is invalid, when it had possession of the bond and control of its employee.
    Where renewal receipts declare the renewal to be subject to all the covenants of the original bond, and the original was not signed-by the employee, as required, the renewal receipts do not give it validity.
    Appeal by the defendant from a judgment of the Municipal Court of the city of Few York, fourth district, borough of Manhattan, in favor of the plaintiffs.
    Leonidas Dennis, for appellant.
    Samuel Plumer, for respondents.
   Freedman, P. J.

Plaintiffs brought this action upon a bond of indemnity issued by the defendant covering specified acts and the defaults of one White, an employee of plaintiffs. The bond was issued upon the application of said White, and delivered to him and by him to plaintiffs.

The bond was issued September 13, 1902, to secure A. Adelberg from August 25, 1902, until August 25, 1903, was by consent of the defendant transferred to plaintiffs as a firm, and was renewed for one year, covering the period from August 25, 1903, to August 25, 1904. The renewal was subject to all the terms and conditions of the original bond. The application was made by White, and made as a basis for the issuing of the bond, and recited that the applicant’s position was “ manager of branch store at Zanesville, Ohio. I have entire charge of the same.”

The bond when issued to White contained the -following clause: This bond is issued on the express understanding that the employee “ has not within the knowledge of the Employer, at any former period been a defaulter, and will be invalid and of no force unless signed by the Employee.” The bond also recites “ Whereas, Charles E. White, Zanesville, Ohio, hereinafter called the employee has been appointed to the position of Manager, etc.”

The loss for which plaintiffs sued accrued when White was acting as manager fdr one of the plaintiffs’ stores at Wheeling, West Virginia.

The questions on this appeal are limited by stipulation of the parties hereto to two.

First. That by the terms of the bond, the bond is void and of no effect unless signed by the employee, and the bond not having been signed by the employee, judgment should have been for the defendant.

Second. The appellant contends that the bond was originally issued for the Zanesville store, and did not cover the employee at the Wheeling store. That by the evidence it appeared that the larceny occurred at the Wheeling store; by reason of which judgment should have been for the defendant.

It is not shown, nor is it contended, that the defendant at the time the bond was renewed or even at the time the loss occurred knew that White had not signed the bond.

In an almost precisely similar case, Union Central Life Ins. Co. v. United States Fidelity & Guaranty Co., 58 Atl. Repr. 437, the Court of Appeals of Maryland has held: Where a bond given by an insurer of the fidelity of an employee provided that it is essential to the validity of this bond that the Employee’s signature -be hereunto subscribed and witnessed’, and at the foot of the bond there was a place indicated for the signature of the employee, hut it was never signed by him, the bond was invalid notwithstanding subsequent renewals by renewal receipts explicitly declared to be subject to all the covenants and conditions contained in the original bond.”

We have carefully examined the reasoning in the opinion of the chief justice in that case, and it would seem that the case at bar must be governed by it. Our attention has not been called by either party to any contrary decisions of the courts of this State, upon the point raised by the appellant as to the failure of the employee to sign the bond in suit.

The point raised by the respondents that there was nothing in the bond to indicate that the plaintiffs and not the defendant were to procúre the employee to sign the bond is effectually answered in the opinion of the court in the Maryland case, as follows: “ The indemnified, cannot complain that there is any hardship inflicted upon it by holding the bond to .be invalid by reason of the failure of its own employee to sign it, because it had possession of the bond, and had control of its employee whose fidelity was guaranteed, and the failure to secure that employee’s signature was due to its own omission or default alone. The indemnity company had the right to make its undertaking depend, as respects its validity, upon the condition that the indemnified’s employee should sign the bond. The condition was not unreasonable or illegal. The performance of it was within the power of the indemnified. The neglect or omission of the latter to comply with that condition precedent cannot be ignored when relied on by the indemnitor; and cannot give efficacy, to an instrument which, by its unequivocal terms, was not to become operative until the specific condition was complied with.”

And as to the renewal, the court says: “ The renewal receipts are explicitly declared to be subject to all the covenants and conditions contained in the original bond, and, if the bond itself was inoperative by reason of the failure 'of the indemnified to have its employee sign it, the renewal receipts could not give it validity. The renewal receipts in terms reasserted the provisions of the bond, and do not purport to continue the bond in force without reference to the conditions upon the observance of which the validity in the first instance depended.”

This requiring a reversal of the judgment herein, the other questions raised need not he passed upon.

Bischoff and Fitzgerald, JJ., concur.

Judgment reversed. Hew trial ordered, with costs to appellant to abide event.  