Imágenes de páginas
PDF
EPUB
[ocr errors][ocr errors][ocr errors]

We are accordingly brought to a consideration of the questior. whether there is any substantial evidence in the record tending to show that plaintiff gave “inimediate notice,” as just defined, aiter it had acquired "knowledge,” as just defined, of any dishonest acts of its employé amounting to embezzlement or larceny.

A general consideration of the evidence will suffice to answer the question. Graves had been a trusted employé of plaintiff for five or six years; had during those years been advanced on his merits from the position of bookkeeper to that of secretary and cashier. He handled from $50,000 to $80,000 per month. Until the events next referred to occurred, no suspicion had befallen him. On April 22, 1901, plaintiff employed an expert bookkeeper for the purpose of revising and improving its system of bookkeeping. This expert immediately entered upon the discharge of his general task and soon discovered that there was a discrepancy of $212.47 between the cashbook and the cash in the cashier's possession. On the following day Graves was advised of this discrepancy, admitted its correctness, and gave some plausible explanation of it. The expert testified. in substance, that he was satisfied on April 23d that there was a shortage in Graves' accounts and irregularities in his bookkeeping, and that there was great room for improvement in the system. He gave out no specific information about the amount of delinquency because, as he says, he could not produce evidence, and was not prepared to make any absolute statement of the facts. He defines what he meant by the word “shortage” by saying:

"I just mean this: That according to his own figures as he had them, and as his books according to his system showed, he had a discrepancy of $212.47."

The above are the substantial facts concerning the discovery made on April 23d, the date from which defendant claims immediate notice should be calculated; but the expert was permitted to draw deductions, not only from the facts, but from the appearance of Graves at the time. He testified that Graves seemed to be in trouble. That:

"If a man is laboring under a great strain, and feels that he is about to be discovered in criminal acts, he will certainly show some evidence of fear, and will show concern, and this is what Mr. Graves showed-rery considerable concern."

He further testified that Graves appeared to droop and complained of feeling sick. It was from such nebulous and unsubstantial data as this that the expert was made on cross-examination to draw the deduction that he believed as early as April 23d that there was a defalcation; and it is on this general kind of evidence we are asked to hold that plaintiff had such knowledge of the commission of the crime of embezzlement by Graves as required it "immediately" after April 23d to give the preliminary notice to defendant.

This evidence seems to us to amount to nothing more than ground for a suspicion or general distrust, and certainly does not necessarily warrant the conclusion under the authorities already cited that plaintiff, whose officers co-operated with the expert, then had that kind of knowledge of the commission of the crime of embezzlement as would justify it in making a charge of that kind and require it im

mediately thereafter to give the preliminary notice. All the evidence concerning the discovery made by the expert on the first day of his service is subject to inferences of different kinds, and we cannot say that they were consistent alone with the guilt of Graves. Many a bookkeeper, without doubt, has made mistakes, been short in his cash, confused in his accounts, and shown'anxiety and distress over them, without having committed the crime of embezzlement. It is certain, we think, that all reasonable men, in the exercise of an honest and impartial judgment, would not have concluded from the facts as disclosed by this record, with all the reasonable inferences deducible from them, that plaintiff knew on April 23d that Graves had committed the crime of embezzlement or larceny, and therefore we cannot hold that for want of notice of loss to defendant immediately thereafter recovery is precluded.

On April 23d the expert commenced and prosecuted a thorough investigation into Graves' accounts. The latter had adopted ingenious devices for covering his defalcations. More money had been charged to expenses than ought to have been, less money had been credited to customers and deposited in the bank than ought to have been, and the books of the plaintiff had been doctored in one way or another to meet the necessities of the situation. The handling of $50,000 to $80,000 per month by Graves afforded temptation and opportunity alike. The expert was required to disentangle these accounts, and in so doing to investigate the actual transactions, between defendant and divers persons, out of which the accounts sprung. He, in connection with plaintiff's officers, devoted himself assiduously to this task until May 28th, when plaintiff first notified defendant that an examination of the accounts was being made, and that “there appeared to be every evidence that there would be a shortage," which it would call upon defendant to pay under its renewal bond F. 1,774. The examination proceeded until June 24, 1904, when, the expert testified, he was first certain he had arrived at the truth. On that date plaintiff wrote defendant as follows:

"With further reference to my letter of May 28th and our conversation of June 8th, in regard to probable shortage of D. C. Graves, our former bookkeeper and cashier, the accountant who has been checking our books has made report to-day, and the total deficit is $7,121.25. We will claim protection under bond F. 1,774, which was issued June 1, 1901, and renewed, your No. 3,571, dated June 30, 1903. If representative of your company wants to verify our investigation, we have everything in shape so that he can do so."

Thereafter, defendant wrote plaintiff as follows: "We beg to acknowledge receipt of your favors of the 24th inst. and of the 28th ult. addressed to Mr. T. H. Mastin, Jr., Kansas City, Mo., in reference to above bond [bond F. 1,774]. We have to state that the information contained in said letter is not sufficient to establish a claim under our bond. Therefore we beg to notify you that we shall reserve all our rights in the premises. Kindly forward to us at once for our information a verified statement setting forth the dates and amounts of each item of the alleged deficit and full particulars regarding same."

After receipt of the last letter plaintiff proceeded at much expense and trouble, occupying the time of a paid expert for two months, to prepare and send to defendant the information requested in its last

ent party. No reference was made to him in the body of the instrument, except in one clause, which is to the effect that Graves will save the indemnity company harmless from any loss or damage it might sustain. Two separate and distinct contracts between different parties appear to have been contemplated; one between plaintiff and the indemnity company, consisting of a contract of indemnity, and the other between Graves and the indemnity company, consisting of a contract of guaranty. In the former, Graves was not concerned ; in the latter, plaintiff was not concerned. The execution of the contract by Graves is, in terms, made neither a consideration for nor condition of the creation of liability by the indemnity company. The bare fact that these separable contracts were possibly originally intended to be incorporated in one writing does not render them any. the less separable and distinct in their nature and purpose.

Moreover, if there were any doubt on this subject, defendant subsequently adopted the instrument, as it was actually signed, as the contract between itself and plaintiff. The instrument sued on was a renewal of that contract. The latter was made June 14, 1901, and insured the plaintiff against the misconduct of Graves for the period of one year from June 1, 1901, to June 1, 1902. After the year had expired, an obligation for a new consideration paid by plaintiff was executed by defendant extending the insurance so as to cover the year ending June 1, 1903. A like extension followed covering the year ending June 1, 1904. During this latter period the embezzlement in question occurred. These different extensions were all based upon and recognized the original contract of June 14, 1901, known and numbered by the defendant as bond F. 1,774. The last renewal bore date June 30, 1903, and reads as follows:

“In consideration of the payment of the sum of $20.00, being the premium for the third year upon bond F. 1,774 of the Ætna Indemnity Company for $5,000, * * * said bond is hereby continued in force until June 1, 1904, subject to all the conditions and covenants thereof.”

These renewals, executed for valuable consideration received and appropriated by defendant, clearly affirm the original contract notwithstanding the absence of Graves' signature and estop it from asserting its invalidity when repeatedly so affirmed by it.

Was immediate notice of loss, within the meaning of the contract, given to defendant? This question is presented on an exception taken to the action of the trial court in refusing to instruct the jury to return a verdict for defendant. Our consideration is therefore limited to an inquiry whether there was any substantial evidence before the jury tending to show that the required notice was given.

The contract of indemnity obligated defendant to reimburse plaintiff for the pecuniary loss it might sustain by reason of fraudulent or dishonest acts of Graves amounting to embezzlement or larceny. The notice required to be given was, in the language of the contract, “of any fraudulent or dishonest act of Graves involving a loss for which the company is responsible”; that is, a loss arising out of embezzlement or larceny by the employé. This notice was required to be given, not immediately after any fraudulent or dishonest act

amounting to embezzlement should be committed, but only “immediately after the occurrence of such act shall have come to the knowledge of the employer.” From this analysis of the contract it appears that the notice required was one that would charge the employé with the commission of a felony, and was required to be given only after knowledge should have come to the employer of the commission of such offense.

In the case of Fidelity & Deposit Co. v. Courtney, 186 U. S. 342, 22 Sup. Ct. 833, 46 L. Ed. 1193, an indemnity contract much like the one now before us, requiring "immediate notice,” of a default, was under consideration, and it was held that a notice given “with due diligence under the circumstances of the case, and without un- . necessary or unreasonable delay," would answer the requirement of the contract; that "immediate notice” is given when it is reasonably immediate.

In American Surety Co. v. Pauly, 170 U. S. 133, 145, 18 Sup. Ct. 552, 557, 42 L. Ed. 977, the Supreme Court, in considering the knowledge required to move an employer to give a notice like that required in this case, approved an instruction given by the trial court in the following words:

"And in considering this issue you are to inquire, first, when it was that the plaintiff became satisfied that the cashier had committed dishonest or fraudulent acts which might render the defendant liable under this policy. lle may have had suspicions of irregularities. He may have had suspicions of fraud. But he was not bound to act until he had acquired knowledge of some specific fraudulent or dishonest act which might involve the defendant in liability for misconduct."

And in doing so observed as follows:

It may well be held that the surety company did not intend to require written notice of any action upon the part of the cashier that might involve loss. unless the bank had knowledge, not simply suspicion, of the existence of such facts as would justify a careful and prudent man in charging another with fraud or dishonesty. If the company intended that the bank should inform it of mere rumors or suspicions, * * * such intentions ought to have been clearly expressed in the bond.”

These authorities place a reasonable and practical construction upon contracts of the kind in question, one under which the rights of both parties are fairly respected and protected. The serious effect of making a criminal charge upon the character, business, social standing, and future prospects of an employé, as well as a proper appreciation of the personal responsibility assumed in making a false charge by an employer, reasonably call for great circumspection and caution in making it. Immediate notice--that is, literally speaking, instantaneous notice-is not required to be given, but only such notice as reasonable diligence, under all the circumstances of the case, dictates after knowledge of facts requiring it is obtained. And this is not required to be given on mere rumor of irregularities or suspicion of dishonesty; neither is absolute or complete knowledge of an accomplished crime necessary before the employer is required to act, but only such knowledge of facts as would justify a careful and prudent man in believing a crime to have been committed.

We are accordingly brought to a consideration of the question whether there is any substantial evidence in the record tending to show that plaintiff gave "immediate notice," as just defined, after it had acquired “knowledge,” as just defined, of any dishonest acts of its employé amounting to embezzlement or larceny.

A general consideration of the evidence will suffice to answer the question. Graves had been a trusted employé of plaintiff for five or six years; had during those years been advanced on his merits from the position of bookkeeper to that of secretary and cashier. He handled from $50,000 to $80,000 per month. Until the events next referred to occurred, no suspicion had befallen him. On April 22, 1904, plaintiff employed an expert bookkeeper for the purpose of revising and improving its system of bookkeeping. This expert immediately entered upon the discharge of his general task and soon discovered that there was a discrepancy of $212.47 between the cashbook and the cash in the cashier's possession. On the following day Graves was advised of this discrepancy, admitted its correctness, and gave some plausible explanation of it. The expert testified, in substance, that he was satisfied on April 23d that there was a shortage in Graves' accounts and irregularities in his bookkeeping, and that there was great room for improvement in the system. He gave out no specific information about the amount of delinquency because, as he says, he could not produce evidence, and was not prepared to make any absolute statement of the facts. He defines what he meant by the word "shortage” by saying:

"I just mean this: That according to his own figures as he had them, and as his books according to his system showed, he had a discrepancy of $212.47."

The above are the substantial facts concerning the discovery made on April 23d, the date from which defendant claims immediate notice should be calculated; but the expert was permitted to draw deductions, not only from the facts, but from the appearance of Graves at the time. He testified that Graves seemed to be in trouble. That:

"If a man is laboring under a great strain, and feels that he is about to be discovered in criminal acts, he will certainly show some evidence of fear, and will show concern, and this is what Mr. Graves showed-very considerable concern."

He further testified that Graves appeared to droop and complained of feeling sick. It was from such nebulous and unsubstantial data as this that the expert was made on cross-examination to draw the deduction that he believed as early as April 23d that there was a defalcation; and it is on this general kind of evidence we are asked to hold that plaintiff had such knowledge of the commission of the crime of embezzlement by Graves as required it "immediately" after April 23d to give the preliminary notice to defendant.

This evidence seems to us to amount to nothing more than ground for a suspicion or general distrust, and certainly does not necessarily warrant the conclusion under the authorities already cited that plaintiff, whose officers co-operated with the expert, then had that kind of knowledge of the commission of the crime of embezzlement as would justify it in making a charge of that kind and require it im

« AnteriorContinuar »