Home Exchange Bank of Jamesport v. Koch

• Citation: 32 S.W.2d 86,326 Mo. 369
• Parties: Home Exchange Bank v. George B. Koch and Aetna Accident & Liability Company, Appellants
• Decision Date: 13 October 1930
• Court: United States State Supreme Court of Missouri

32 S.W.2d 86

326 Mo. 369

Home Exchange Bank v. George B. Koch and Aetna Accident & Liability Company, Appellants

Supreme Court of Missouri

October 13, 1930

Appeal from Livingston Circuit Court; Hon. Ira D. Beals Judge.

Affirmed.

Dudley & Brandom, Scott J. Miller and Stringfellow & Garvey for appellants.

(1) The case should have been referred to a referee. Third Natl Bk. v. Owen, 101 Mo. 584; Wentzville Tobacco Co. v Walker, 123 Mo. 662; Father Matthew Society v. Fitzwilliams, 84 Mo. 406; Kline Cloak & Suit Co. v. Morris (Mo.), 240 S.W. 98; McCormick v. St. Louis, 166 Mo. 315, 336; Ittner v. Expo. Assn., 97 Mo. 561. In the following cases the reference was made without objection, but the appellate court held the pleadings made them proper cases for compulsory reference: State v. Chi. Bond & Sur. Co. (Mo.), 215 S.W. 21; St. Louis v. Parker Washington Co. (Mo.), 196 S.W. 769; Vandagrift v. Masonic Home, 242 Mo. 154; State ex rel. v. Hurlstone, 92 Mo. 327; Lack v. Brecht, 166 Mo. 242; State ex rel. v. Burckhartt, 83 Mo. 430; Star Bottling Co. v. Expo. Co., 240 Mo. 634; State ex rel. v. Reynolds, 245 Mo. 698. (2) The court erred in not sustaining defendant's separate demurrer to each charge of the petition. Because of the failure to prove any loss to the bank growing out of any such particular transaction. (3) The court erred in not sustaining defendant's demurrer to the evidence as to the whole case. 20 C. J. 436, note 68; State v. Hurly (Mo.), 234 S.W. 823; Corbin v. State (Ala.), 74 So. 729; People v. Lapique (Cal.), 52 P. 40; Citizens Trust & G. Co. v. Ins. Co., 229 F. 326; Monongahela Coal Co. v. F. & D. Co., 94 F. 732, 176 U.S. 727; 25 C. J. 1114, note 24; First Natl. Bk. v. Natl. Sur. Co., 130 F. 401; Miners & Farmers Bank v. Am. Bond. Co., 186 S.W. 1141; Salley v. Globe Ind. Co. (S. C.), 131 S.E. 616; Wilson Gro. Co. v. Natl. Sur. Co., 218 Ill.App. 584; 23 C. J. 53; Eisentrager v. Ry. (Ia.), 160 N.W. 311; Cook v. Ry. (Ia.), 158 N.W. 521; Samulski v. Menesha Paper Co. (Wis.), 133 N.W. 145; Midland Val. Railroad Co. v. Root (Okla.), 210 P. 1038; Rosenthal v. Ostrow (Pa.), 134 A. 384; Russell v. R. Co. (N. H.), 141 A. 227; U. S. F. & G. Co. v. Bank at Batesville (Ark.), 112 S.W. 957.

Davis & Davis and Davis & Ashby for respondent.

(1) Error was not committed in refusing a reference. Even though the pleadings had shown (and they did not) that the trial of the cause would involve the examination of a long account, no error was committed in refusing a reference. In such cases the statute does not require, but only provides, that the court may direct a reference. Sec. 1426, R. S. 1919. The court is not bound in any case to make a reference. Fitzgerald v. Hayward, 50 Mo. 525; Ice Co. v. Tamm, 138 Mo. 389; State ex rel. v. Wilson, 288 Mo. 333. The statute is only directory. Bricker v. Stone, 47 Mo.App. 537. It is only when the pleadings show that the examination of a long account is necessary that the court has the power to refer. Smith v. Ins. Co., 6 S.W.2d 297; Kenneth v. Investment Co., 96 Mo.App. 133; Bank v. Langlin, 305 Mo. 31; Craig v. Furn. Co., 187 S.W. (Mo. Sup.) 797; 28 C. J. 290, sec. 7. The fact that it may, subsequently, or during the progress of the trial, develop that the trial involves a long account will not make the refusal to refer error. Fr. Matthew Soc. v. Fitzwilliams, 12 Mo.App. 647. The fact that the case may require calculations and the computation of mutual debts and credits, do not make it referable. Martin v. Hall, 26 Mo. 386. (2) Defendant Koch who was fully conversant with the affairs of the People's Exchange Bank and who could have explained or denied his guilty conduct shown by the evidence, although present at the trial and participating therein throughout, failed to take the stand and was not called as a witness either by his own counsel or by his co-defendant. His failure to testify is a strong circumstance against defendants and justified the jury and justifies this court in inferring as facts the inferences shown by the evidence, and plaintiff is entitled, in aid of its evidence, to the presumption that defendants would have rebutted these inferences by the testimony of defendant Koch if they could truthfully have done so. Schooler v. Schooler, 258 Mo. 95; Grossman v. Ins. Co., 204 S.W. 948; Insurance Co. v. Smith, 117 Mo. 294; Banking Co. v. Donovan, 195 Mo. 285; Barber v. Nunn, 205 S.W. 16; Werner v. Litzsinger, 45 Mo.App. 109. (3) Appellant does not differentiate between an action for embezzlement, etc., on a fidelity bond, such as this, and a criminal action. It is not necessary in order to recover in a civil action on a fidelity bond that evidence be sufficient in all respects to warrant a conviction in a criminal case. Fidelity, etc. v. Colorado Ice, etc., 45 Colo. 443, 103 P. 383; 25 C. J. 1094; Citizens Trust & G. Co. v. Fire Ins. Co., 229 F. 330; City Trust, etc. v. Lee, 204 Ill. 69; Green v. U.S. Fid. & Guar. Co., 185 S.W. 727; U. S. F. & G. Co. v. Egg Shippers' etc. Co., 148 F. 355; Champion, etc. v. American etc. Co., 115 Ky. 863; American Surety Co. v. Pauly, 170 U.S. 144, 42 L.Ed. 981.

OPINION

White, J.

Action on a bank official's bond.

Defendant George B. Koch, March 16, 1916, was cashier of the People's Exchange Bank at Jamesport, in Daviess County. Later he was elected president of that bank and continued as such until in January, 1925. It is alleged and the proof shows that during all that time he was the managing officer in charge of said bank and had direct supervision and control of the bank employees.

On October 26, 1916, Koch executed a bond with the defendant Aetna Accident & Liability Insurance Company as surety, in the sum of ten thousand dollars, conditioned that Koch would faithfully perform the duties to which he had been elected or should thereafter be elected, reelected, appointed or reappointed; or of any other office to which he might be appointed or reappointed, elected or reelected, or temporarily assigned, the surety agreeing, "to hold said People's Bank harmless from any loss occasioned by any act or acts of larceny, embezzlement, fraud, dishonesty, forgery, theft, wrongful abstraction or wilful misapplication committed by said George B. Koch, employee of said People's Exchange Bank of Jamesport, directly or through connivance with others, until his [said Koch's] accounts with said bank have been fully settled and satisfied."

The People's Exchange Bank of Jamesport continued in business as a banking house until in January, 1925, when by action of its board of directors it suspended business and placed its affairs in the control of the Commissioner of Finance of the State. The Commissioner of Finance through deputies went into immediate possession and continued in exclusive possession of the assets of said bank until June 6, 1925, when the assets were sold and the plaintiff, Home Exchange Bank, purchased them, including the cause of action sued on.

The petition alleged eight wrongful acts of the defendant Koch while an officer of said People's Bank and while the said bond was in force, each of which wrongful acts caused loss to the said People's Bank.

The second of said charges was dismissed before or during the trial.

The seven remaining charges are briefly designated by appellant, as follows:

"Charge 1, The Kansas Farm transaction.

"Charge 3, The F. N. Forth note.

"Charge 4, The Musselman notes.

"Charge 5, The Carlow Bank -- B. F. Ware Corn Deal.

"Charge 6, The M. E. Johnson $ 2,000 note.

"Charge 7, The Nickell time-certificate.

"Charge 8, The Liberty Bond account."

Evidence was presented upon the seven charges before a jury in the Circuit Court of Livingston County, who, May 20, 1927, returned a verdict for the full face of the bond with interest at six per cent, amounting to $ 11,031.54. From the judgment rendered the defendants appealed.

I. The defendants first filed a motion to have the case referred; the motion was overruled, and error is assigned to the rulings. The first clause of Section 1426, Revised Statutes 1919, declares that a compulsory reference may be had "where the trial of an issue of fact shall require the examination of a long account on either side."

Reference is made by appellants to Smith v. Ohio Millers Mut. Fire Ins. Co., 320 Mo. 146, 6 S.W.2d 920. In that case we held that a compulsory reference was error because the correctness of the account involved was not for determination. It is claimed that in this case the correctness of the account on each charge is for determination. It is also held in a leading case cited by appellants. Browning v. North Mo. Cent. Ry. Co., 284 Mo. 439, l. c. 446, that a case "must fall within the spirit as well as the letter of the reference law, before a person can be deprived of his right to a trial by jury."

There is nothing on the face of the petition to show that a "long account" is required to be examined. The use of the word "may" in that statute carries discretion to the trial court in directing a compulsory reference although in some cases cited it is held that such discretion may be reviewed by this court. The complaint is that in certain specific instances the defendant Koch gave himself credit for sums on the books of the bank to which he was not entitled, that he abstracted from the assets of the bank certain notes and other securities, and that he caused fraudulent paper to be listed as assets of the bank and thereby got credit for sums to which he was not entitled. None of these charges indicates the necessary examination of a long account. We do not find error in the overruling of appellant's motion for reference.

II. Defendants filed a separate demurrer to the evidence as to each of the seven charges, which demurrers were overruled and error...