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INSURANCE AND SURETIES
suretyship rather. than one of indemnity. The following statement from the
opinion of the Supreme Court of Florida, in the case of Royal Indemnity Co.
v. Knott, 136 So. 474, illustrates the distinction between a contract of indemnity and one of suretyship:
"(10) The essential distinction between an indemnity contract and a contract of guaranty or suretyship is that the promisor in an indemnity contract
undertakes to protect the promisee against loss or damage through a liability
on the part of latter to a third person, while the undertaking of a guarantor
or surety is to protect the promisee against loss or damage through the failure
of a third person to carry out this obligation to the promisee. 16 A. & E.
Ency. Law (2d Ed.) 168."
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It is my opinion that the proposed endorsement does not result in creating
a direct primary liability on the part of the insurance company to persons
in)ured by the negligence of the insured carrier. The contraCt, therefore,
would remain one of indemnity and the company would be authorized to
write such a policy, with endorsement, without qualifying as a surety company.
I call your attention, however, to the fact that this ruling would not
apply when a motor carrier i.s required to comply with the provisions of
Chapter 14764 Laws of Florida Acts of 1931 in addition to the provisions of
the Federal Motor Carrier Act. Compliance with the State statute would, by
operation of the law, necessarily require the policy to be written by a company
qualified as a ~urety company.
August 23, 1940-0-900.
BEKEVOLENT MUTUAL BENEFIT ASSOCIATIONSDEPOSIT REQUIRED
Dear Sir:
This is in reply to your letter of August 22.
You call my attention to Section 5 of Chapter 15885, Laws of Florida,
Acts of 1935, as amended by Section 1 of Chapter 19121, Laws of Florida,
Acts of 1939. Under the statutory provisions there set forth, benevolent
mutual benefit associations organized under Chapter 15885, Acts of 1933, as
amended, are required to deposit with the State Treasurer for the benefit o.f
policy holders in said association cash, or United States bonds, or bonds of
any county or mnnicipality, in the sum of $5,000 market value. The pertinent
provisions o·f said Section 5, as amended, read as follows:
"All associations authorized to operate and do business under the pro·visions of this Act shall deposit with the State Treasurer in cash, United
States bond~, or bonds of any county or any municipality of the State, to be
approved by the State Treasurer, in the sum of Five Thousand ($5,000.00)
Dollars, market value, T<.ucnty-five Hundred ($2,500.00) Dollars of ·which shall
·be de,Positrd upon the issuance of the Permit and the balance in the next
succeeding t~t·d<·e· equal month!}' payments.'' (Italics onrs.)
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BIENNIAL REPORT OF THE ATTORNEY GENERAL
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INSURANCE AND SURETIES
You also call my attention to Section 4 of Chapter 15885, which said
section' has the sub-title "Issuance of Permits to Solicit Applications." Two
forms of "permits" are referred to in said Section 4. The first is a permit to
be issued by the State Treasurer, after approving the proposed policies and
contracts of the association, to persons designated by the association to solicit
applications for membership. The second type of permit referred to is a
"final permit." It is provided in said Section 4 that no "final permit" shall
be issued by the Treasurer until it is made to appear that there are not less
than 500 bona fide applications for membership in an aggregate amount of
not less than $500,000.00.
You request my opinion as to whether an association, having deposited
bonds in the amo:mt of $2,500.00 must deposit the balance of the $2,500.00 in
bonds in the next succeeding twelve months following the issuance of the first
permit to solicit members, referred to in said Section 4, or the "final permit"
referred to in said Section 4.
It is my opinion that the balance of $2,500.00 in bonds must be deposited in
twelve equal monthly payments immediately following the isst1ance of the first
permit to solicit members of the association, and such monthly payments
{;ann'ot be deferred until after the issuance of the "final permit."