American Indemnity Co. v. Shaw, 9140.

• Decision Date: 18 October 1933
• Docket Number: No. 9140.,9140.
• Citation: 64 S.W.2d 367
• Parties: AMERICAN INDEMNITY CO. v. SHAW, Banking Com'r.
• Court: Texas Court of Appeals

64 S.W.2d 367

AMERICAN INDEMNITY CO. v. SHAW, Banking Com'r.

No. 9140.

Court of Civil Appeals of Texas. San Antonio.

October 18, 1933.

Rehearing Denied November 15, 1933.

Appeal from District Court, Refugio County; J. P. Pool, Judge.

Suit by James Shaw, Banking Commissioner, against the American Indemnity Company. From a judgment for plaintiff, defendant appeals.

Affirmed.

Terry, Cavin & Mills and Joyce Cox, all of Galveston, for appellant.

Moursund, Johnson, Rogers & Slatton and Woodville J. Rogers, all of San Antonio, for appellee.

FLY, Chief Justice.

This suit was instituted by appellee as commissioner of banking in the state of Texas, against appellant, American Indemnity Company, to recover on a bond in the sum of $10,000, executed by the company and Nolan Hayden, as cashier, to the Guaranty Bond State Bank of Tivoli, afterwards changed to Tivoli State Bank, to secure said bank from embezzlement, willful misapplication, and wrongful abstraction of the bank's funds, while the said Nolan Hayden was acting as cashier of said bank. The bond was dated March 9, 1928, and expired March 9, 1929, but continuance certificates were obtained by the bank, from year to year, up to and including March 9, 1932. It was alleged in the petition that sums had been embezzled from the bank by said Hayden in an excess of the amount of the bond. It is alleged that on the 31st day of January, 1932, the bank was declared insolvent by appellee, and all of its assets taken possession of by him as banking commissioner. Appellant in its answer alleged that the continuance certificates were each obtained at the time when the bank was fully cognizant of the fact that its cashier had embezzled its funds, but, in order to procure continuance of the bond, the bank represented to appellant that the accounts were all correct and that the cashier was properly performing his duty to the bank. Appellant alleged that through such representations, which were known to be false, it was induced to continue the indemnity bond in the sum of $10,000. It was also claimed by appellant that there had been no embezzlement or abstraction of funds by Hayden during the life of the indemnity bonds.

The cause was tried by jury on special issues submitted by the court, and on the responses thereto judgment was rendered for appellee in the sum of $10,000, with interest.

The jury found that said Nolan Hayden did, between March 9, 1928, and March 9, 1932, embezzle, willfully misapply, and wrongfully abstract the sum of $13,475 from said bank. Two special issues were requested by appellant but denied by the court.

The first and second propositions are directed at the total lack or insufficiency of the evidence to support any embezzlement, wrongful abstraction, or misapplication of funds of the bank by Nolan Hayden. The evidence clearly and without contradiction showed that funds of the bank had been embezzled and misappropriated by Hayden, as cashier of the bank, and the jury was warranted in finding as they did in reference to the embezzlement, misapplication, and abstraction of the funds. The first two propositions are therefore overruled.

It must be kept in view in the consideration of this case that the bond of indemnity was obtained by Nolan Hayden and not by the bank. The bank of course was the beneficiary of the insurance, but it was the business and duty of the employee to apply for and obtain the policy of insurance to indemnify the bank....