James Clark McReynolds

“ Petitioner's counsel maintain that the standard form provides for insurance only 'against loss'; that the reinsurer thereunder becomes liable only upon 'proof of the payment of such items by the Reinsured, and upon delivery to the Reinsurer of copies of all essential documents concerned with such loss and costs and the payment thereof'; that payment by the reinsured is a condition precedent to the reinsurer's liability. Sundry provisions in the form, indicated below, they say lend support to this view.
Respondent maintains that proof of payment is not a prerequisite to recover. ”

“ If the bond be a depository bond, in no event less than the amount ceded hereunder plus the amount of all reinsurance ceded by the Reinsured to the Reinsurer under any other depository bond or bonds issued by the Reinsurer in behalf of the Principal and effective at the time of any breach of the bond resulting in a claim thereunder, such retention to be carried under any depository bond or bonds issued and/or any depository reinsurance or reinsurances carried by the Reinsured in behalf of the Principal ”

“ Firemen's Insurance Company (1908) , 209 U.S. 326, 28 S.Ct. 544, 52 L.Ed. 815, 14 Ann.Cas. 948, required approval of respondent's contention. This was error. The defense was well taken and should have been sustained. ”