Glenrock State Bank v. National Surety Company

• Decision Date: 13 September 1932
• Docket Number: 1747
• Citation: 14 P.2d 197,44 Wyo. 532
• Parties: GLENROCK STATE BANK v. NATIONAL SURETY COMPANY
• Court: Wyoming Supreme Court

14 P.2d 197

44 Wyo. 532

GLENROCK STATE BANK v. NATIONAL SURETY COMPANY

No. 1747

Supreme Court of Wyoming

September 13, 1932

APPEAL from the District Court, Converse County; JAMES H. BURGESS Judge.

Action by the Glenrock State Bank against the National Surety Company. From a judgment for defendant, plaintiff appeals.

Reversed.

For the plaintiff and appellant there was a brief by Dawson and Daniels, of Douglas, Wyoming, and oral argument by Mr. John D. Dawson.

No objection was ever made by the respondents to the proofs of loss. All premiums upon the bond executed by respondent had been paid, and the bond was in effect at the time of the loss. The bank had suffered a loss of $ 16,500.00 on May 15 1930. The court erred in striking from the evidence blotter sheets showing deposits and withdrawals on certain dates. The court erred in taking the case from the jury. Collins v Anderson, 37 Wyo. 275. There was evidence for the consideration of the jury on an issue of fact. Hester v. Coliseum Motor Co., 41 Wyo. 345. The verdict and judgment following the order directing a verdict in favor of defendant and against the plaintiff are contrary to law, and contrary to the evidence.

For the defendant and respondent there was a brief and oral argument by R. R. Rose, of Casper, Wyoming.

There was no evidence given as to when the blotter sheets were prepared, or when the entries on them were made, nor who made the entries. There was no evidence as to the correctness of the figures supposed to represent checks paid, or that the entries were made in due course of business. For anything appearing to the contrary in the evidence, the blotter sheets in question may have been prepared by Mr. Carson, or some other person at some time between the purported dates of the transactions, and the preliminary hearing held two years later. The book entries were not competent evidence. 22 C. J. 864, Sec. 1035; Chan Kiu Sing v. Gordon, (Calif.) 151 P. 657. Proof of handwriting is not sufficient without evidence of the person who makes the entries. 22 C. J. 865, Sec. 1036. In this case, the entries were made by a machine operation and not in the handwriting of Mr. Wood or anyone else. It is the uniform rule that the correctness of the entries must be shown. 22 C. J. 867, 886, 1040, 1073, 1074. The blotter sheets were properly stricken from the evidence. Without the blotter sheets there was no evidence upon which a jury could find a verdict for the plaintiff. Carson testified that it was customary to change figures to correct errors in the figures originally written. With the journal sheets out of the case, there is nothing left except the testimony of witnesses to the effect that when Mr. Wood went to work for the bank in 1925, the individual ledger was in balance and that in October, 1929, it was out of balance. This individual ledger consisted of 700 loose leaves, which could have been taken out and put back at will by anyone having access to them. There were at least two employees who had access to the sheets and at least two other persons at different times to say nothing of the directors of the bank. The long runs were made at about the same time each month, and consisted merely of looking at the last figure appearing on each of the 700 sheets. The clerk in making the long runs had no occasion to observe the names of the depositors or anything else, except the last figure on the sheet indicating the individual balance for that day. This would be insufficient to support a verdict for the plaintiff.

RINER, Justice. BLUME, J., concurs and KIMBALL, C. J., concurs in the result.

OPINION

RINER, Justice.

In this proceeding the Glenrock State Bank, appellant here and plaintiff below, seeks review of a judgment of the District Court of Converse County, denying recovery on plaintiff's petition against the National Surety Company, respondent here and defendant in the trial court. Hereinafter, the parties will be referred to as designated in the District Court, or as the "bank" and the "surety company."

The plaintiff, a banking institution incorporated under Wyoming law, brought this action against the defendant upon a contract whereby the latter agreed to reimburse plaintiff, in an amount not exceeding $ 2000, if plaintiff sustained loss through the "personal dishonesty, forgery, theft, larceny, embezzlement, wrongful conversion, abstraction or misapplication by Harry B. Wood," one of the plaintiff's employees, in the performance of his duties as such employee. Plaintiff's petition, after pleading this contract, alleged that Wood had embezzled, wrongfully converted, abstracted and misapplied its money and personal property in the sum of $ 16,500, and that due proof of such loss had been made to the surety company. The answer was a general denial.

A jury having been demanded for the trial, upon the conclusion of plaintiff's evidence the court, after sustaining defendant's motion to strike out certain documentary proofs, likewise sustained its motion that the jury be instructed to return a verdict in its favor. Upon the verdict thus rendered, the judgment aforesaid was entered. The errors assigned relate to the action of the District Court in striking out these proofs and in thus directing a verdict, it being further assigned as error that the verdict and the judgment thereon are contrary to law and the evidence in the case.

To establish its case, plaintiff relies upon its claim of misconduct on the part of the employee Wood, asserted to have been proven through the introduction in evidence of four of its journal sheets, dated respectively July 14, 15, 25 and 28, all of the year 1927, and four so-called "blotter sheets."

It is necessary at this point to relate to some extent the manner in which the bank's affairs were conducted. The record shows with reasonable clearness that on each business day deposit slips were made containing memoranda of the deposits made in the bank on that day by the plaintiff's customers. These were kept as part of the permanent records of the bank. The accounts of all these customers, of whom there were some five or six hundred, were kept in a loose-leaf ledger, each customer being assigned a sheet, or page, therein, on which was entered each day the amount of his deposits and his checks drawn upon the account. As these sheets were filled or the account closed they were transferred to store-room space and preserved as a permanent bank record.

At the close of the day's business some one of the employees of the bank took a blank sheet of paper and listed thereon the several amounts of all of the checks and the several amounts of all the deposits that came into the bank on that day, the names of the depositors and of the makers of the checks not being given upon the sheet thus prepared. These amounts were then totaled and thereupon transferred to the journal sheet of the bank, thus reflecting, to that extent, a summary of that day's business. Customarily, the blotter sheets were dated--though it appears that some were not--and they were subsequently filed in the bank's vault or store-room and also constituted one of the permanent records of the bank. Occasionally, these sheets were initialed by the employee making them, but this was not required.

At the time of the transactions in question, the active operations of the bank were conducted by three employees, F. O. Carson, Mrs. Elsie B. Holmes, and Harry B. Wood, except in vacation seasons, when several other persons were engaged for short periods of time. Carson, as cashier, was in charge of the bank, the others working under his supervision. He looked after the loans while they attended to the work ordinarily transacted by bank tellers, and the bookkeeping. Wood was employed from about November, 1924, until the 13th day of May, 1930. Mrs. Holmes worked there during this entire period.

The institution was subject to examination by representatives from the State Examiner's office, and the record is that on the 17th and 18th of October, 1929, an examination was made of the affairs of the bank by two of them, and its books were then found to be in balance, "except about seventy-one cents." Thereafter, and about the 13th of May, 1930, another official examination was made, which, according to the testimony of the examiners who made it, showed that the bank's books disclosed a shortage of $ 16,500, and also that they were at least $ 8000 short when the previous examination in October was made. The missing amount the examiners were unable to locate. The record is further to the effect that if, when the examination was made in October, 1929, the bank had been $ 8000 short, and "$ 8000 worth of general ledger sheets" were removed by someone before the examination was made, the bank's books would have balanced; and that Wood, when asked by one of the examining officers to explain why the books balanced in October, 1929, when the examination was made then, and did not balance in May, 1930, stated that "he supposed someone must have pulled sheets."

Recurring now to the four blotter and the four journal sheets previously mentioned, plaintiff's claim is, and was on the trial, that because the total amounts of checks and deposits indicated on these blotter sheets failed to correspond with the totals of checks and deposits entered on the respective journal sheets for the several days on which they were made to the extent of some $ 800--the entries thereon being concededly in Wood's handwriting--this was proof that Wood had taken that amount of money. As invalidating this contention, the defendant claims that the evidence establishes that the blotter sheets aforesaid were undated when, some two years after the transactions involved, they came into the hands of Carson, the...