Kellogg v. Scott

• Decision Date: 07 August 1899
• Citation: 44 A. 190,58 N.J.E. 344
• Parties: KELLOGG v. SCOTT et al.
• Court: New Jersey Court of Chancery

44 A. 190

58 N.J.E. 344

KELLOGG

v. SCOTT et al.

Court of Chancery of New Jersey.

Aug. 7, 1899.

Bill by Andrew H. Kellogg against Frank M. Scott and others. Bill dismissed.

Leon Abbott, for complainant.

H. H. Dawson and J. O. H. Pitney, for defendant American Ins. Co.

EMERY, V. C. Complainant files a bill to foreclose a mortgage given by Mrs. Fish upon her lands to secure whatever might become due to complainant under a bond given by defendant Frank M. Scott and Mrs. Fish, who was his mother, as his surety, upon complainant taking Scott into his employment. The bond (a joint and several bond of principal and surety, dated November 19, 1892, in the penal sum of $7,000) contains the following recital and condition: "Whereas, the above-bounden Frank M. Scott is about to act as bookkeeper and collector for the above-named Andrew H. Kellogg, and by reason thereof will have the control of sums of money, and be required to perform various acts: Now, the condition of this obligation is that if the above-bounden Frank M. Scott shall well and truly account for and pay over and dispose of all moneys and property of the said Andrew H. Kellogg which may come into his possession or under his control, and shall well and truly discharge and perform all his duties as such bookkeeper and collector, and if the said obligors, or either of them, shall pay over to the said Andrew H. Kellogg the sum and amount of any and all loss, damages, costs, and expenses suffered or incurred by the said Andrew H. Kellogg by reason of the failure of said Frank M. Scott to pay over and account for all moneys and property, or his failure to discharge and perform all his duties as aforesaid, within ten days after notice is given to the said Rosanna E. Pish of the sum and amount so to be paid, then this obligation to be void," etc. Scott entered the employment of complainant on November 23, 1892, continuing until February, 1897. During that time Scott misappropriated his employer's moneys to the extent of about $6,300, and the bill is filed to foreclose the mortgage for their repayment. Mrs. Fish, subsequent to the execution of this mortgage, and in November, 1893, gave a mortgage to the defendant the American Insurance Company for $1,000, for money loaned, and in August, 1895, gave another mortgage for $2,000 to the insurance company to take up the first mortgage of $1,000, which was then canceled, and to secure an additional loan. One thousand five hundred dollars is now due on this mortgage, with interest from February, 1897. Mrs. Fish died in July, 1896, testate, having devised the lands in question to her son, Frank M. Scott, for life, with remainder to his children, the infant defendants, and giving a power of sale to the defendant executors. The proofs showed that complainant was engaged in a job-printing business in New York City, the volume of which amounted to from $80,000 to $130,000 a year during the time of Scott's employment Previous to this employment Scott had been convicted of embezzlement from a previous employer, and, after serving part of his term of imprisonment had been pardoned. The complainant knew this, and the surety, Scott's mother, must also be presumed to have known it. From the time of his employment, Scott was not only bookkeeper and collector, but also the cashier, of complainant, and the only cashier, and as such had charge of all the cash received in the office, as well as charge of the books and pay rolls. He continued to be bookkeeper as well as cashier during his whole term of employment. He abstracted money under his control, and, to the extent of $5,990, concealed the abstractions by means of false additions or footings in the cash book from time to time, by which false footings the cash paid out appeared to be larger than was actually paid, to the extent of his embezzlement. Scott also had charge of making out the pay rolls for the employes, and received the cash for their payment, and paid the same. By false footings and other false entries on the pay rolls, he drew out from time to time more money than he paid over to the employes; the deficiency from this source amounting to $312.06, as nearly as can now be ascertained on the present proofs.

Upon this state of facts, disclosed by complainant's evidence, it is insisted on behalf of the insurance company and the infant defendants that the misappropriations of money were made by Scott in his employment as cashier, and not as bookkeeper,...