Security Bank of Elvins v. Natl. Surety Co.

• Decision Date: 03 August 1933
• Docket Number: No. 30877.,30877.
• Citation: 62 S.W.2d 708
• Parties: SECURITY BANK OF ELVINS, a Corporation, Appellant, v. NATIONAL SURETY COMPANY, a Corporation, and WILLIAM BRYAN COZEAN.
• Court: Missouri Supreme Court

62 S.W.2d 708

SECURITY BANK OF ELVINS, a Corporation, Appellant, v. NATIONAL SURETY COMPANY, a Corporation, and WILLIAM BRYAN COZEAN.

No. 30877.

Supreme Court of Missouri, Division One.

August 3, 1933.

Appeal from Wayne Circuit Court. — Hon. E.M. Dearing, Judge.

AFFIRMED.

Davis & Damron and Thomas T. Fauntleroy for appellant.

(a) New trial should not be granted unless error was prejudicial to the substantial rights of the complaining party on the merits of the case. Ittner v. Hughes. 133 Mo. 679. (b) If the evidence is such that no verdict would be allowed to stand in favor of the party securing the new trial, the appellate court should reverse the trial court and remand with directions to enter judgment on the verdict Lead & Zinc Mining Co. v. Webster, 193 Mo. 351. (c) In such case the error of the trial court in sustaining the motion for new trial is an error of law. Alexander v. Allison, 224 S.W. (2d) 50.

Fordyce, White, Mayne & Williams and Edgar & Banta for respondents.

(1) The appellate court will sustain the action of the lower court in granting a new trial. Wise v. Rubenstein, 24 S.W. (2d) 203; Riche v. City of St. Joseph, 32 S.W. (2d) 578, 326 Mo. 710; Wight v. Mo. Pac. Railroad Co., 20 Mo. App. 481; Carnthersville v. Lloyd, 240 S.W. 838; Shovey v. Phillips, 7 S.W. (2d) 296; Walsh v. Telephone Co., 52 S.W. (2d) 839; Harris v. McQuay, 242 S.W. 1011; Fitzjohn v. St. Louis Transit Co., 81 S.W. 907, 183 Mo. 74; Birdsong v. Jones, 30 S.W. (2d) 1094, 225 Mo. App. 242; Glidewell v. Railroad Co., 204 S.W. 37; Barth v. Boyer, 27 S.W. (2d) 499; Chase v. American Press Brick Co., 31 S.W. (2d) 246; Collier v. Shelbyville, 219 S.W. 713; Stewart v. Carrothers, 37 S.W. (2d) 498; Lorenzen v. United Railways Co., 155 S.W. 30, 249 Mo. 182; Guthrie v. Gillespie, 6 S.W. (2d) 886, 319 Mo. 1137; Best v. Equitable Life Ins. Co., 299 S.W. 118; Pearce v. Rogers, 15 S.W. (2d) 874; Galeener v. Derris, 20 S.W. (2d) 167. (2) The giving of plaintiff's instruction was error. (3) Appellant could not recover in any event under the terms of the bond. First Nat. Bank v. Nat. Surety Co., 127 N.E. 479, 228 N.Y. 469; Hartford Accident Co. v. Tabler, 44 Fed. (2d) 780; American Bonding Co. of Baltimore v. Ballard County Bank's Assignee et al., 165 Ky. 63; Goffe v. Nat. Surety Co., 9 S.W. (2d) 938; Queen Incubator Co. v. Nat. Surety Co., 239 N.W. 815; Thompson v. American Surety Co. of N.Y., 42 Fed. (2d) 953.

ATWOOD, J.

The Security Bank of Elvins sued its former cashier, William Bryan Cozean, and the National Surety Company, maker of his surety bond, and obtained verdict and judgment against both defendants for $7624.49. Defendant National Surety Company filed motion for a new trial and from the circuit court's order sustaining this motion plaintiff has appealed. We quote as follows from appellant's statement of the facts which counsel for respondents say "is substantially correct and is satisfactory to the respondents herein":

"On July 29, 1921, plaintiff was engaged in the banking business at Elvins, Missouri, and the defendant William B. Cozean was its cashier. On the date last mentioned the defendant, National Surety Company, bonded Cozean as such cashier in the sum of ten thousand dollars ($10,000), and by renewal of annual premiums the bond remained effective until July 29, 1925.

"The insuring clause of the bond protected plaintiff against any loss occasioned by embezzlement and other specified acts of Cozean `until all his acts with the bank shall have been fully settled and satisfied.'

"Clause two required plaintiff to give immediate notice to the defendant at its head office in New York City of any defalcation or dishonesty on the part of Cozean and within sixty days after discovery of any loss to file with defendant an itemized statement thereof.

"Clause seven of the bond provided `the surety's liability hereunder shall terminate immediately (a) upon discovery by the bank or any of its officers of any default hereunder on the part of the employee; (b) when employee leaves the service of the bank; (c) fifteen days after receipt by the bank of written notice from the surety of its desire to withdraw as surety for said employee; and the surety shall not be liable for any claim hereunder unless it be presented to the surety within six months after the liability of the surety hereunder terminates.' (All italics ours.)

"Plaintiff remained in the banking business till March 1st, 1929, and Cozean remained its cashier till that date when it was discovered that he had defaulted, and then his employment with the bank as cashier was immediately terminated. On the next day, March 2nd. plaintiff's president gave notice by telegram and by letter to defendant at its head office in the City of New York that Cozean had defaulted as cashier in the approximate sum of $23,000. and called defendant's attention to the bond covering Cozean.

"The plaintiff, receiving no reply to its telegram and letter of March 2nd, and in order to timely furnish an itemized statement of its loss, on or about March 19th following, secured an accountant at an expense of $125 to audit Cozean's accounts with plaintiff. The accountant completed his audit in a few days, whereupon, on March 28th following plaintiff furnished defendant with a copy of an itemized statement of the loss. The original was sent to the prosecuting attorney of St. Francois County.

"Afterwards, on April 3rd, defendant acknowledged receipt of plaintiff's communication of March 28th `with enclosures' and wrote it was `referring this matter to our Kansas City, Missouri, office who will give same their prompt attention.' On April 3, 1929, Mr. James H. Moore, the defendant's adjuster in Kansas City, wrote plaintiff as follows:

"`In Re: Claim 167096 — W.B. Cozean. "`Security Bank of Elvins.

"`Your letter dated March 2nd, in regard to the above matter has been forwarded to the writer for attention.

"`We note that the term of your bond under which you are filing claim, expired in 1925. You will note that your bond provided for a term of six months after discovery in which you may file claim under same. As the six months time provided in your bond has long since expired, I am sure you will appreciate that we will be unable to assist you in this matter.

"`We are very sorry indeed, that this situation has arisen and trust that we will be able to assist you some time in the future.'

"The bank records indicated that while defendant's bond was in effect, viz: from July 29, 1921, to July 29, 1925, Cozean had embezzled on July 29, 1924, $4000; on April 14, 1925, $2,490.67; on June 27, 1925, $2,000. Plaintiff made up a formal itemized statement, claim and proof thereof for these sums, and furnished same to defendant April 20, 1929. Defendant held the document for some time and returned it to plaintiff.

"Defendant refused to pay and plaintiff sued for the three items mentioned above, and on the trial used Cozean as a witness to establish the claim. He testified he embezzled the first and last items in the exact sums mentioned above, but as to the second item he testified that he embezzled only $1,624.29 instead of $2,490.67, as charged; that he embezzled the sums during the bond period. No other witness testified as to his embezzlements and no witness denied them. The amount of the verdict coincided exactly with the amount embezzled as testified to by Cozean.

"After the term of this bond expired Cozean was covered by a bond in another company for $10,000, and also defaulted under it to the extent of over $15,000. This latter default occurred after July 29, 1925, and prior to March 1, 1929. This latter bond was paid to plaintiff, and Cozean made restitution to plaintiff of property of the value of $3.420, all of which was applied on his shortages that were made after July 29, 1925, and during the coverage of the latter bond. After applying the amount of the bond collected and amount of property restored, the Bank still had a loss on the shortage occurring after the bond in suit expired, and nothing to apply on the shortages made while the bond in suit was in force."

Counsel for appellant contend that the trial court erred in sustaining the motion for a new trial "because both the facts and the law preclude a recovery by defendant, and there was no error in the trial;" while counsel for respondents insist that we should sustain the action of the trial court, that the giving of plaintiff's instruction was error, and that appellant could not recover in any event under the terms of the bond.

[1, 2] Since the trial court failed to specify any ground upon which it sustained the motion for a new trial, it will be assumed that the motion was sustained on each and every ground stated therein. [Gray v. City of Hannibal (Mo.), 29 S.W. (2d) 710, 713.] One of the grounds so stated was "because the verdict is against the evidence and against the weight of the evidence." Regardless of the seeming weight of the evidence opposed to the action of the trial court in setting aside a verdict of the jury on this ground, we do...