Miners' & Farmers' Bank v. American Bonding Co.

• Decision Date: 25 May 1916
• Docket Number: No. 1711.,1711.
• Citation: 186 S.W. 1139
• Court: Missouri Court of Appeals
• Parties: MINERS' & FARMERS' BANK OF AURORA v. AMERICAN BONDING CO. OF BALTIMORE.

186 S.W. 1139

MINERS' & FARMERS' BANK OF AURORA v. AMERICAN BONDING CO. OF BALTIMORE.

No. 1711.

Springfield Court of Appeals. Missouri.

May 25, 1916.

Rehearing Denied June 24, 1916.

Appeal from Circuit Court, Jasper County; D. E. Blair, Judge.

Action by the Miners' & Farmers' Bank of Aurora against the American Bonding Company of Baltimore. From a judgment for plaintiff, defendant appeals. Reversed and remanded.

McNatt & McNatt, of Aurora, for appellant. L. E. Scott, of Aurora, and H. H. Bloss, of Aurora, for respondent.

ROBERTSON, P. J.

The defendant indemnified the plaintiff to the amount of $5,000 against the dishonesty of its cashier, Fly, or through any act of his done or omitted in bad faith or through negligence or without authority. During the existence of said bond, Fly defaulted, and on January 9, 1912, the defendant paid to the plaintiff $2,468.89, being the total of all sums then having been discovered that the said Fly had appropriated, and the plaintiff's then cashier signed a receipt for that amount stating that it was "in full settlement with Miners' & Farmers' Bank covering shortage of defalcation of Finis P. Fly." Prior to the time when the settlement was made, there were some notes given by relatives of Fly to the plaintiff which the plaintiff sought to have included in the payment to be made by the defendant, and also some jewelry; but the agent of the defendant at Aurora testified that she thought these items were not included in the settlement. She says that both the plaintiff and defendant were trying to discover all of Fly's shortages and that at the time of the settlement all that they had found were included in the payment then made. There is no testimony tending to show that, if plaintiff relinquished its claim concerning the two notes amounting to $125 and the jewelry, such conduct on the part of the plaintiff was the procuring cause of the payment which was made by the defendant. The only testimony concerning these items is that they were not included in the payment. After this payment was made, the plaintiff discovered that on May 1, 1911, while said bond was in force, a customer of the bank deposited with it $408.25 and that said deposit never reached the funds of the bank. This was about the time the other embezzlements of Fly occurred, and on the day this deposit was made Fly and Davis, who afterwards became cashier, were the only persons working in or about the bank. A duplicate deposit slip was issued to the customer, but the original, if one was ever made, never appeared among the bank papers or records, and the duplicate recited that the deposit consisted of a check; neither this check nor any record of it ever appeared among the papers or upon the records of the bank. Fly was a witness for the defendant and denied that he ever received the check or its equivalent. It also appears that Fly did not remember or accurately disclose all of the amounts he had embezzled prior to the time when the defendant made the first payment. After discovering the said deposit, plaintiff sought to have the defendant pay the same, which payment was refused, and thereupon this action was instituted in Lawrence county from where a change of venue was taken to Jasper county. A jury trial was had and a verdict returned in favor of the plaintiff for the full amount of the deposit. Defendant has appealed.

At the close of the testimony the court instructed the jury in behalf of the plaintiff that, even though plaintiff executed the said receipt, yet if the jury further found and believed that it was executed in unavoidable ignorance of the misappropriation alleged, and the said sum was not considered at the time of or included in said receipt, then the jury should find for the plaintiff. The term "unavoidable ignorance" was defined and two other instructions given about which no question is raised.

In behalf of the defendant, an instruction was asked and refused directing a verdict for it. The defendant also asked and was refused the following instruction:

"The court instructs the jury that if you believe from the evidence that at the time plaintiff received from the defendant the sum of $2,468.89, and signed the release of the bond sued on herein, there was a dispute between the plaintiff and the defendant, either as to the amount that was due under the bond, or as to the liability of the defendant for any of the amounts claimed by plaintiff, and that said sum was paid for the purpose of finally settling said disputes, and was so accepted by the plaintiff, then your verdict should be for the defendant."

The points urged here in behalf of the appellant are that the receipt was binding on the plaintiff in the absence of fraud or mistake; that the execution of the release was admitted, but it was not asked that the same be set aside, or was there any offer to restore the amount thus received; and that there was a total absence of proof that Fly appropriated the fund for which recovery is sought.

"It is well-settled law that the payment of a part of a debt, or of liquidated damages, is not a satisfaction of the whole debt even when the creditor receives the part for the whole, and receipts for the whole demand." Pollman & Bros. Coal & Sprinkling Co. v. City of St. Louis, 145 Mo. 651, 656, 47 S. W. 563; Goodson v. National Masonic Accident Ass'n, 91 Mo. App. 339, 352; Winter v. Kansas City Cable Ry. Co., 73 Mo. App. 173; Id., 160 Mo. 159, 61 S. W. 606; Harms v. Fidelity & Casualty Co., 172 Mo. App. 241, 249, 157 S. W. 1046.

While the law favors settlements and compromises based upon valid considerations, they should not be treated with such regard as will make them instruments which benefit no one except the party paying the consideration named therein. In the case at bar, when the defendant made the first payment it is apparent that the only object which the parties had in mind was to ascertain the exact amount which Fly had appropriated to his own use and to pay that amount to plaintiff under the bond which defendant had executed to it. There is no suggestion of any claim made by plaintiff which defendant denied that was sought to be included, compromised, or settled by the payment which defendant then made. Plaintiff at one time, according to the testimony of defendant's agent at Aurora, made a claim on account of two notes and some jewelry; but these items were not included in the settlement and were not paid by the defendant, and plaintiff did not relinquish its claim to these items on account of any payment made by the defendant, so that there was no compromise or settlement into which these items entered. Conceding that defendant's refused instruction properly declared the law, there is no testimony upon which to base it. It assumes that there was testimony tending to prove that there was a dispute between the plaintiff and the defendant, when the first payment was made, either as to the amount that was due under the bond, or as to the liability of the defendant for some amount claimed by plaintiff, and that the sum paid by defendant was paid for the purpose of settling that dispute and was so accepted by the plaintiff. As we have already stated, while plaintiff at one time made a claim for certain items which were not included in the first payment made by the defendant, there is no testimony that this claim was considered or entered into the settlement. We hold that the court properly instructed the jury in...