The label "vouching" comes from the ancient practice of bringing a warrantor into an action by "writ of voucher." State Bank of New Prague v. Am. Sur. Co. of N.Y., 206 Minn. 137, 145, 288 N.W. 7, 11 (1939). Tender of defense has long since replaced the writ of voucher.

Although General concedes that the dishonest acts were committed within the term of its bond, it claims that the commission of the dishonest act is a concept entirely dissimilar to a loss sustained; that the policy covers only losses sustained; and that Reserve did not suffer any losses when the acts were committed. The defendant advances three lines of cases to support its argument that the bond should be construed so that the time of Reserve's losses falls beyond the term of its bond. The first line of cases holds, according to the defendant, that losses are not sustained until a claim or judgment is actually paid. ( Cary v. National Surety Co. (1933), 190 Minn. 185, 251 N.W. 123; State Bank of New Prague v. American Surety Co. (1939), 206 Minn. 137, 288 N.W. 7; First State Bank v. Standard Acc. Ins. Co. (5th Cir. 1938), 94 F.2d 726; Ronnau v. Caravan International Corp. (1970), 205 Kan. 154, 468 P.2d 118; Foxley Cattle Co. v. Bank of Mead (1976), 196 Neb. 587, 244 N.W.2d 205.) The second line of cases assertedly holds that losses are not sustained until the claim or liability accrues.

Hartford Accident Indemnity Co. v. Swedish Methodist Aid Ass'n, 7 Cir., 92 F.2d 649, 652, and cases there cited. In the absence of express restriction, a fidelity bond covers losses occurring within its term, whenever discovered, so long as discovery is in time to permit of suit against the insurer within the period of the statute of limitations, State Bank of New Prague v. American Surety Co., 206 Minn. 137, 288 N.W. 7, which in this case was four years after the loss occurred, Cal.Code Civ.Proc. § 337. Rather than to treat the latter part of clause 5 of Lloyd's bond as referring to nothing and hence meaning nothing, we think it more reasonable to construe it as giving the same discovery rights as those afforded by the primary bond, but not exceeding three years. That construction lends substance to the whole of the clause and is in harmony with the purpose of affording indemnity to the assured.

The parties are not in agreement as to the effect to be given in this case to the judgment in the Smith case. It is well settled in Iowa that where a third party may be liable over in the event of a judgment against a defendant such third party may be vouched in by such defendant. City of Des Moines v. Barnes, 1947, 238 Iowa 1192, 1201, 30 N.W.2d 170, 174. Under modern practice such a party is vouched in by being notified of the pendency of the suit and requested to assume the defense of it. State Bank of New Prague v. American Surety Co., 1939, 206 Minn. 137, 288 N.W. 7, 11. Where one who has the right to recover over is sued, the judgment rendered against him is conclusive on the indemnitor providing he has been vouched in. B. Roth Tool Co. v. New Amsterdam Casualty Co., 8 Cir., 1908, 161 F. 709. See, also, Hoskins v. Hotel Randolph Co., 1926, 203 Iowa 1152, 211 N.W. 423, 65 A.L.R. 1125, and City of Des Moines v. Barnes, supra. See, also, St. Joseph G.I. Ry. Co. v. Des Moines Union Ry. Co., 1917, 180 Iowa 1292, 162 N.W. 812; International Indemnity Co. v. Steil, 8 Cir., 1929, 30 F.2d 654, and Aluminum Co. of America v. Hully, 8 Cir., 1952, 200 F.2d 257. The conclusiveness of the judgment is coextensive with the questions determined in the case in which it was rendered and to ascertain what questions were determined recourse may be had not only to the pleadings, instructions, verdict, and judgment therein, B. Roth Tool Co. v. New Amsterdam Casualty Co., supra, but also to the entire record including the testimony. Washington Gaslight Co. v. District of

The seller's liability under such circumstances extends to the amount of the judgment obtained against his purchaser and also the necessary expenses, including costs and attorney's fees, incurred by the purchaser in defense of the action. State Bank of New Prague v. American Surety Co., 206 Minn. 137, 288 N.W. 7; Inhabitants of Westfield v. Mayo, 122 Mass. 100, 23 Am.Rep. 292. * * * * * *

The fact that the complaint did not set forth in detail a factual basis for Travelers' coverage did not relieve Travelers of its duty to defend when notice of the actual facts in the tender indicated that the injury to Williams was one covered by its policy. If the rule were otherwise, then in order to be defended by his insurer, the insured would be required to move the court for an amendment of the pleading against him. Surely, such procedure would not be required when the insurer is possessed of all of the facts which bear upon the coverage of its policy. Hardware Mutual Casualty Co. v. Hilderbrandt, 10 Cir., 1941, 119 F.2d 291; State Bank of New Prague v. American Surety Co. of N.Y., 1939, 206 Minn. 137, 288 N.W. 7. See, also, State ex rel. Inter-State Oil Co. v. Bland, 1945, 354 Mo. 622, 190 S.W.2d 227; Marshall's U.S. Auto Supply Inc. v. Maryland Cas. Co., 1945, 354 Mo. 455, 189 S.W.2d 529. As indicated, Bituminous, as subrogee of the Quarry Company, proceeds against Wegman on the theory that it was Wegman's negligent act which proximately caused the injury to Williams.

The doctrine applies to contracts of insurance if the insured gives the insurer notice of the pendency of the action and an opportunity to defend on his behalf. State Bank v. American Surety Co., 206 Minn. 137, 141, 288 N.W. 7, 9 (1939). Intent to do an act is a central issue in an assault and battery action.

It has been held to be the law of Maryland. C. O. Canal Co. v. County Commissioners; Balto. Ohio R. Co. v. Howard County, both supra. Illustrative of the application of the principle are the opinions in Washington Gas Light Co. v. District of Columbia, 161 U.S. 316, 329, 330, 40 L.Ed. 712, 719-720; City of Waterbury v. Clark (Conn.), 99 A. 578, 579; and State Bank v. American Surety Co. (Minn.), 288 N.W. 7. In 40 L.R.A. (N.S.) 1172, there is an annotation of cases on the subject.

The seller's liability under such circumstances extends to the amount of the judgment obtained against his purchaser and also the necessary expenses, including costs and attorney's fees, incurred by the purchaser in defense of the action. State Bank v. American Surety Co. 206 Minn. 137, 288 N.W. 7; Westfield v. Mayo, 122 Mass. 100, 23 Am. R. 292. Due process of law is deemed accorded the seller by virtue of notice to him of the institution of the action against his purchaser and the tender to him of the defense thereof, thereby affording him the opportunity of asserting his defenses to any charge that the damages claimed resulted proximately from a breach of the warranties under which he originally sold the property.

The tripartite situation qualifies the extent of the triable issues so far as the surety is concerned. If liability of the principal is established, whether before court or jury or in the same or separate actions, the only question in determining the surety's liability is whether the acts for which the principal is liable are within the provisions of the bond. If so, the surety stands as to the merits in the same shoes as the principal. Whether the surety is sued after judgment has been procured against the principal as in State Bank of New Prague v. American Surety Co. 206 Minn. 137, 288 N.W. 7 (surety had notice and opportunity to defend) or is sued in the same action as the principal, determination is conclusive against the surety if the issues are the same. The result is identical although the basis perhaps is different.