Farmers Loan & Trust Co. v. Southern Surety Co.
| Decision Date | 30 December 1920 |
| Citation | 226 S.W. 926,285 Mo. 621 |
| Parties | FARMERS LOAN & TRUST COMPANY v. SOUTHERN SURETY COMPANY, Appellant |
| Court | Missouri Supreme Court |
Appeal from Jackson Circuit Court. -- Hon. Thomas B. Buckner, Judge.
Affirmed.
Morrison Nugent & Wylder and Howard L. Hassler, for appellant.
(1) The court erred in refusing to give defendant's demurrer to the evidence. The bond provided against acts of larceny or embezzlement and the alleged breaches were not that character of wrong doing. (2) The court erred in submitting the James T. Robinson (O'Connell) transaction to the jury. That transaction involved a straight case of forgery, and is not within the scope of appellant's bond, which by its express terms limits its liability to loss by reason of any act or acts of larceny or embezzlement. Furthermore the forgery was a personal act in Peltzer's individual capacity and not in connection with his duties or acts as president of the Trust Company. It did not come within the limitation of the bond which covered only "acts of larceny or embezzlement while as president." Bank v Guaranty & Trust Co., 133 Mo.App. 705; Guarantee Co v. Mechanics' Bank & Trust Co., 100 F. 559; Trust Co. v. National Surety Co., 221 F. 618; Dedham Bank v. Chickering, 4 Pick. (Mass.) 314; Trust Co. v. Overstreet, 84 S.W. 764. (3) The court erred in submitting the Rapschutz transaction to the jury. That transaction was a plain case of uttering a forged instrument -- a note and deed of trust. It was not an act of larceny or embezzlement and was a transaction wherein Peltzer was a seller, and the trust company a buyer of securities. It was not an act of Peltzer "while as president." Home Savings Bank v. Traube, 6 Mo.App. 232; Trust Co. v. Overstreet, 84 S.W. 764; Brown Grocery Co. v. Wasson, 113 Ky. 414, 68 S.W. 404; Ins. Co. v. Johnson, 120 Ill. 622; Ins. Co. v Lowenberg, 120 N.Y. 44. (4) The court erred in permitting a recovery on the $ 3,250 transaction. This was money drawn out of the funds of the trust company without concealment and in accordance with Peltzer's previous custom of securing advances from the company, which in this instance, as in previous cases, were used by him in his personal business. It was neither larceny nor embezzlement and was not so considered or treated by the trust company or its officers. Coyle v. U.S. Fidelity & Guaranty Co., 217 Mass. 268; Gray v. Davis, 89 Mo.App. 450; Milwaukee Theater Co. v. F. & C. Co., 60 N.W. 360; Fire Ins. Co. v. Nelson, 157 S.W. 416; Brown Grocery Co. v. Wasson, 68 S.W. 404; Blair v. Ins. Co., 10 Mo. 355; Ins. Co. v. Johnson, 120 Ill. 622; Insurance Co. v. Lowenberg, 120 N.Y. 44. (5) Failure to give notice of Peltzer's defalcations within the time required by the bond precludes recovery. No notice of any act of Peltzer or of any act for which recovery is sought, was given to appellant until after Peltzer's death and after more than sixteen days after full knowledge thereof by the respondent and its officers. This was a clear breach of the condition in the bond which is there stated to be precedent to recovery, and which condition required "immediate notice," or "in any event within ten days." This failure precluded any recovery by respondent. Dominion Trust Co. v. National Surety Co., 221 F. 618; Hurley v. Fidelity Co., 95 Mo.App. 88; U.S. Fid. & Guar. Co. v. Carmichael Co., 195 Mo.App. 93; Mich. Gar. & Loan Assn. v. Trust Co., 73 Mo.App. 161; Irwin v. Ins. Co., 24 Mo.App. 151; Burnham v. Ins. Co., 75 Mo.App. 394; La Force v. Ins. Co., 43 Mo.App. 527; National Surety Co. v. Long, 125 F. 887; U.S. Fid. & Guar. Co. v. Rice, 148 F. 206. (6) The court erred in admitting evidence as to transactions with the deceased, Peltzer. The great bulk of plaintiff's evidence consisted of dealings between Peltzer as an individual on the one side, and the agents, officers and directors of respondent, respresenting respondent company, on the other side. Under Sec. 635, R. S. 1909, and the decisions, such agents, officers, directors and stockholders were incompetent to testify with reference to transactions between them as representatives of the company and Peltzer. Under the authorities the surety is entitled to the same protection as the personal representative of the deceased principal. Lead & Zinc Inv. Co. v. Lead Co., 251 Mo. 742; Leavea v. Southern Ry. Co., 266 Mo. 151; Leavea v. Railroad, 171 Mo.App. 24; State ex rel. Bryant v. Morris, 69 N.C. 448; McGowan v. Davenport, 134 N.C. 526; Banking House v. Rood, 132 Mo. 261; Chapman v. Dougherty, 87 Mo. 617; Looker v. Davis, 47 Mo. 140. (7) Plaintiff's first instruction is erroneous. (a) Because it is not confined to the charges alleged in the petition. By telling the jury that the bond covered "any loss" by "the act" of Peltzer, the jury were given a roving commission and were not confined to the issues raised by the pleadings or supported by the evidence. State ex rel. Coal Co. v. Ellison, 270 Mo. 645; Beave v. Transit Co., 212 Mo. 331; Tinkle v. Railroad, 212 Mo. 471; Black v. Met. St. Ry. Co., 217 Mo. 672; Priebe v. Crandall, 187 S.W. 605; Degonia v. Railroad, 224 Mo. 589, Mansuh v. Botts, 80 Mo. 658; Bank v. Murdock, 62 Mo. 70. (b) The instruction assumes the existence of act or acts of larceny or embezzlement. To tell the jury that the bond covered "the act or acts of larceny or embezzlement committed by Peltzer," and to proceed to say that "if you believe defendant was duly notified of the wrongful acts of said Peltzer" was to assume that there were wrongful acts of Peltzer which came within the purview of the bond. To thus assume the principal issue was prejudicial error. Gessley v. Mo. Pac. Ry. Co., 26 Mo.App. 160; Phillips v. Todd, 180 S.W. 1039; Ganey v. Kansas City, 259 Mo. 654; Lamport v. General Acc. Co., 272 Mo. 39; Meily v. Railroad, 215 Mo. 586; State v. Davies, 80 Mo.App. 239; Warrington v. Bird, 168 Mo.App. 385. (c) The construction of the contract is for the court and not for the jury. The instruction telling the jury that if they believed defendant was "duly notified of the wrongful acts of Peltzer," left the construction of the condition precedent as to giving notice of Peltzer's acts to the arbitrary notion of the jurors. Evans v. Graden, 125 Mo. 79; Edwards v. Smith, 63 Mo. 119; Caldwell v. Dickson, 26 Mo. 60; Bank of Freeport v. Railroad, 172 Mo.App. 678; Mount v. Implement Co., 195 Mo.App. 21.
Sparrow & Patterson, James R. Page and Humphrey, Boxley & Reeves for respondent.
(1) Peltzer was guilty of acts of larceny and embezzlement. As president of respondent he was an executive officer, and the affairs of said corporation were in his charge. By certain manipulation he got a check for $ 3250 during the absence of the secretary, and by the same methods he obtained and cashed checks aggregating $ 4500 on account of Matt O'Connell mortgage, which was admitted to be a forgery, and he obtained the money, treated it as his own, and converted it to his own use, according to the testimony and the admissions. Sec 4550, R. S. 1909. Inducing an owner of a chattel or of money by fraudulent trick or devise, and with felonious intent to part with the possession, and then appropriating the thing or money to one's own use against the owner's consent, is larceny. Huber v. State, 57 Ind. 341. Larceny may exist though possession of the stolen goods is obtained with the owner's consent, if the consent is obtained by deception, and with the intent not to return the goods, but to appropriate them, and to deprive the owner of a remedy for this loss. Fleming v. State, 136 Ind. 149. If the owner of goods parts with the possession for a particular purpose, and the person who receives the possession avowedly for that purpose had a fraudulent intention to make use of that possession as the means of converting the goods to his own use, and does so convert them, it is larceny. Elliott v. Commonwealth, 75 Kent. 176; Commonwealth v. Wilde, 71 Mass. 83; Commonwealth v. Lannan, 153 Mass. 287; Loomis v. People, 67 N.W. 322; Kelley v. People, 6 Hun, 509; Macino v. People, 12 Hun, 127; Devore v. Territory, 2 Okla. 562; Commonwealth v. Eickleberger, 119 Pa. 254; 3 Greenleaf on Evidence, sec. 160; 1 Bishop, Crim. Law, sec. 583. (2) The court did not err in submitting the James T. Robinson (O'Connell) transaction to the jury. According to the admitted facts Peltzer obtained the checks in the O'Connell matter by deception, and by a trick, and by fraud, and, therefore, according to all the authorities cited above the question should have been submitted to the jury. Peltzer not only did these things as president, but while acting as president. Whatever else may be said, Peltzer while president of respondent, by a trick, by artifice, by fraud and by deception, obtained two checks aggregating $ 4500, cashed them, used the money, and the respondent was out that much money on account of the transaction. There was no suggestion of purchase and sale in the transaction, and even if there had been a straight out purchase of said bogus paper, the fact remains that, according to the admitted facts, Peltzer practiced a deception as president to obtain the funds of respondent. 4 Joyce on Ins. (2 Ed.), p. 4617, sec. 2766, par. F. Undoubtedly Peltzer was guilty of such acts as would have subjected him to a criminal prosecution for larceny or embezzlement, but respondent was entitled to recover even if such acts were not such as to subject him to an indictment and conviction for larceny or embezzlement. 19 Cyc. 518. (3) The court did not err in submitting the Rapschutz transaction to the jury. As in the case of the check and the O'Connell matter, this was a plain case of the employment by Peltzer of fraud, and a trick, and an artifice in his position as president of respondent, for his own use and...
To continue reading
Request your trial