Citizens' Trust Co. v. Ferguson

• Decision Date: 16 December 1916
• Docket Number: No. 1934.,1934.
• Parties: CITIZENS' TRUST CO. v. FERGUSON et al.
• Court: Missouri Court of Appeals

190 S.W. 395

195 Mo. App. 330

CITIZENS' TRUST CO. v. FERGUSON et al.

No. 1934.

Springfield Court of Appeals. Missouri.

December 16, 1916.

Appeal from Circuit Court, Pemiscot County; Sterling H. McCarty, Judge.

Action by the Citizens' Trust Company, a corporation, against L. A. Ferguson and others. From a judgment for defendants, plaintiff appeals. Judgment affirmed.

C. G. Shepard, of Caruthersville, and Oliver & Oliver, of Cape Girardeau, for appellant. R. L. Ward, of Caruthersville, for respondents.

ROBERTSON, P. J.

This is an action on an indemnifying bond in the penal sum of $5,000 executed by defendant L. A. Ferguson as principal, and the other defendants as sureties, to the Pemiscot County Bank, October 8, 1912, reading, except italics, added for the purpose of reference, so far as necessary to quote, as follows:

"The condition of the above and foregoing obligation is that if the said L. A. Ferguson as assistant cashier of the Pemiscot County Bank aforesaid, shall well and truly account for all money, property of whatsoever, belonging to said Pemiscot County Bank, and which shall come under his control or possession, as said and such assistant cashier of and for said bank, or if he shall well and truly account for all loss of money, or property, notes or evidences of debt, which may be occasioned or caused on account of his willful misconduct or failure to properly protect the property and interest of said bank, and shall at all times observe and fulfill the duties and requirements had or made of him by the board of directors of and for said bank, and shall at any time deliver over to the directors of said bank, any, and all property, money, or evidences of debt, which may come into his possession, or under his control, during the time of his employment as said and such assistant cashier, then this obligation shall be void; otherwise to remain in full force and effect."

The following concerning the bond is in the finding of facts to which reference is hereafter made:

"The minutes of the proceedings of the board of directors of said Pemiscot County Bank show that on March 27, 1912, a motion `to instruct the cashier to employ temporarily any person that suited him to assist in the bank work' was `duly seconded' and unanimously carried. Later, probably in July or August, in the same year, one W. H. Johnson was employed, and the bond sued on in this case was prepared for, but not signed by, him. In October, 1912, Tindle spoke to defendant L. A. Ferguson about taking employment at the bank as bookkeeper, and agreed to put him in at ninety dollars per month, giving him, at this time, the bond sued on herein, to be filled. The bond was executed under date of October 8, 1912, by L. A. Ferguson, as principal, and his codefendants, as sureties."

Ferguson worked in the bank, doing the work of a bookkeeper, until May 13, 1913, when said cashier resigned. It was then discovered by the board of directors that the business of the bank had been so manipulated that said cashier, and other officers of the bank, had dissipated nearly one-half million dollars of the bank's funds, and up until then had accurately entered the customers' deposits on their passbooks, but making the entry on the deposit ledger for a less amount, keeping an account of the difference in a separate place, a particular drawer set apart for that purpose. When Ferguson entered upon his duties in the bank he was inexperienced in that line of work, and for that reason reluctantly accepted the position. He would not discover the method of keeping the accounts of the depositors until he undertook to balance a passbook. When he did this and called the cashier's attention to the discrepancy, he was directed to the drawer for the correct account, or duplicate passbook, of the particular customer whose account was to be balanced. This method applied to only the largest depositors, and it was a custom, as observed by Ferguson, that had prevailed for several years before he commenced work in the bank. There is no pretense that there is any evidence tending to show that Ferguson got any of the funds of the bank, or intended to assist in any fraud upon the bank, unless such facts may be inferred by reason of his failure to report the cashier's conduct to a superior. Plaintiff alleges in its petition that it is the receiver of the...