Citizens' Guaranty State Bank v. Nat'l Sur. Co

In Citizens' Guaranty State Bank v. Nat'l Sur. Co., 258 S.W. 468, 470 (Tex. Comm'n App. 1924, judgm't adopted), the court held that requiring the bank to give notice of employee theft within 90 days to the surety of its employee theft bond violated Tex. Civ. Prac. & Rem. Code section 16.071(a) where such malfeasance was the very subject of the contract. 258 S.W. at 469-70. The surety argued that notice of a claim of "loss," as required under the contract, was not a claim for "damages" proscribed by the statute. The court, construing the predecessor statute to 16.071(a), reasoned that the statute must be construed liberally in favor of the common law right of redress and strictly against contractual infringements of that right. Id. It is not necessary to use the words "notice of claim for damages" for a provision to relate to notice of a claim for damages. See id.