Nock v. Fid. & Deposit Co

• Court: South Carolina Supreme Court
• Writing for the Court: BONIIAM, Justice
• Citation: Nock v. Fid. & Deposit Co, 175 S.C. 188, 178 S.E. 839 (S.C. 1935)
• Decision Date: 04 March 1935
• Docket Number: No. 14010.,14010.
• Parties: NOCK. v. FIDELITY & DEPOSIT CO.

178 S.E. 839

NOCK.

v.FIDELITY & DEPOSIT CO.

No. 14010.

Supreme Court of South Carolina.

March 4, 1935.

Appeal from Common Pleas Circuit Court of Chesterfield County; H. P. Rice, Judge.

Action by John D. Nock, as assignee, against the Fidelity & Deposit Company. From the judgment, defendant appeals.

Affirmed.

W. F. Stevenson, of Washington, D. C, and P. A. Murray, Jr., of Cheraw, for appellant.

Eeppard & Leppard and M. J. Hough, all of Chesterfield, for respondent.

BONIIAM, Justice.

Cheraw Cotton Oil Company, Incorporated, brought its action against Fidelity & Deposit Company of Maryland as surety on the bond of John F. Cahill as assistant treasurer of Cheraw Oil & Fertilizer Company, alleging a loss to the company through the fraud, dishonesty, forgery, theft, embezzlement, or wrongful abstraction of said John F. Cahill. This action was begun October 3, 1027. The defendant served its answer to this complaint October 8, 1027. January 29, 1930, M. C. Thomason, as assignee of Cheraw Cotton Oil Company, Incorporated, by order of the court, was substituted as plaintiff in the stead of that company, with leave to amend his complaint, as he might be advised.

On or about June 16, 1931, by order of court, the North Carolina Bank & Trust Company, as administrator of the estate of M. C. Thomason, then deceased, was substituted as plaintiff in the place and stead of M. C. Thomason.

July 18, 1931 North Carolina Bank & Trust Company, as administrator of the estate of M. C. Thomason, deceased, assigned the bond, claim, and action to John D. Nock, who was thereupon, by order of court, substituted as plaintiff in the place of North Carolina Bank & Trust Company, as administrator of the estate of M. C. Thomason, deceased.

The complaint alleges the execution by the defendant of its policy of insurance whereby it undertook to indemnify Cheraw Oil & Fertilizer Company against loss of any money or personal property through the fraud, dishonesty, theft, forgery, embezzlement, or wrongful abstraction of John F. Cahill, assistant treasurer of said corporation, in a sum not exceeding $5,000; that, while this policy was in force, the Cheraw Oil & Fertilizer Company incurred a loss of $2,027.50 through the fraud, dishonesty, forgery, theft, embezzlement, or wrongful abstraction of John F. Cahill; that notice of loss was duly given the defendant, proper proofs of loss were submitted, and all the requirements of the policy of insurance on the part of the plaintiff were complied with, and demand made for payment by defendant of its liability, which defendant admitted and promised payment, but which it has neglected and refused to make, that the policy of insurance and all right, title, interest, and estate of the Cheraw Oil & Fertilizer Company thereon and in this action has, by successive mesne conveyances, for valuable consideration, been duly assigned to this plaintiff, who is now the legal owner and holder thereof.

The answer sets up a general denial; admits its corporate capacity and the execution and delivery of the bond of indemnity as alleged; admits on information and belief that John F. Cahill drew from the funds of Cheraw Oil & Fertilizer Company $2,027.50 with full knowledge of the company, as a bonus which had been promised him and all other employees by M. C. Thomason, the general manager and president of the company; admits that Cheraw Oil.& Fertilizer Company made some claim which defendant refused to pay; admits that the amount due by John F. Cahill to Cheraw Oil & Fertilizer Companywas transferred and conveyed to Cheraw Cotton Oil Company, but denies that any transfer was ever made to M. C. Thomason, and alleged that the attempted transfer of such claim by North Carolina Bank & Trust Company, as administrator of M. C. Thomason, deceased, unto this plaintiff, was a nullity and of no effect, and denies the plaintiff has any title to or interest in said account; it admits demand and refusal to pay, but denies that it ever promised to pay this claim, and denies liability thereon.

All the pleadings were duly verified.

The case came to trial before Judge Rice and a jury at the fall term of the court of common pleas for Chesterfield county November 20, 1933; the jury returned a verdict for the plaintiff in the sum of $2,909.36. Defendant's motion for directed verdict was overruled, as was the motion for new trial. This appeal followed; it is predicated upon twelve exceptions, but not so many questions are to be answered. The two cardinal questions for determination are these:

Did John F. Cahill take from the funds of Cheraw Oil & Fertilizer Company $2,027.50, without the knowledge and consent of the officers of the company, and in violation of the conditions of the bond of indemnity?

Is the plaintiff the lawful owner and holder of this claim?

Necessarily there are questions subsidiary to each of these main questions.

These significant allegations of the answer should be borne in mind as we consider the issues:

The admission "that John F. Cahill drew from the funds of Cheraw Oil & Fertilizer Company $2,027.50."

"This defendant admits that the account due by John F. Cahill to Cheraw Oil & Fertilizer Company in the sum of $2,027.50 as afore said, " etc.

Exceptions 1 and 4 allege error for that his honor admitted the testimony of the plaintiff, John D. Nock, to the effect that John F. Cahill had admitted in his presence that he had taken from the funds of Cheraw Oil & Fertilizer Company the sum of $2,027.50; and" for that he admitted the testimony of Samuel Want to the effect that John F. Cahill had admitted to him that he had taken these funds.

The specifications of error are that the admissions were not a part of the res gestae and were not admissible against the surety.

It may be premised that at the time the admissions were made in the presence of Mr Nock he was not then the owner of this claim and plaintiff in this action.

It appears from the record that Cahill's accounts had been submitted to an accountant, who reported the abstraction of the funds by him. The plaintiff, then the attorney of the Cheraw Oil & Fertilizer Company, was called to a conference with Thomason and Duval, officers of the company, at which John F. Cahill and the auditor were present. The plaintiff testified that John F. Cahill then and there made the confession that he had abstracted from the funds of the company the sum of money which the audit showed was taken.

The witness Samuel Want testified that John F. Cahill admitted to him in his office at Darlington that he was short in his accounts with Cheraw Oil & Fertilizer Company.

Was the testimony of these two witnesses admissible as a part of the res gestae? Was it admissible as against the surety?

There can be no doubt that the strictness of the rule of res gestae has been much relaxed of late years.

The specific contention of appellant is that, when Cahill made the statements objected to, he was no longer in the employ of the Cheraw Oil & Fertilizer Company, and his admissions related to past transactions. It appears from the record that, when the admissions were made, the Cheraw Oil & Fertilizer Company was in the hands of a receiver; this did not dissolve the corporation nor change the ownership of its assets. 23 R. C. L. 46; Pollock v. B. & L. Ass'n, 48 S. C. 65, 25 S. E. 977, 59 Am. St. Rep. 695; 53 C. J. 93-95.

Mr. Chief Justice Blease, in the case of Price v. Am. Agr. Chem. Co., 173 S. C. 518, 176 S. E. 352, 354, considering the rule of res gestae, quoted with approval from Jones' Commentaries on the Law of Evidence the following:

" 'The present attitude of the Courts, it may be said, is to regard primarily the circumstances. Although it appears that the particular declarations, explanations, or statements were made after the occurrence in question, if it also appears that the principal occurrence was such as would be likely to cause more than passing...