State ex rel. Sourthern Bank of St. Louis v. Atherton

• Decision Date: 31 March 1867
• Citation: 40 Mo. 209
• Parties: STATE OF MISSOURI TO THE USE OF THE SOUTHERN BANK OF ST. LOUIS, Respondent. v. GEORGE O. ATHERTON AND D. H. ARMSTRONG, Appellants.
• Court: Missouri Supreme Court

40 Mo. 209

STATE OF MISSOURI TO THE USE OF THE SOUTHERN BANK OF ST. LOUIS, Respondent.

v.GEORGE O. ATHERTON AND D. H. ARMSTRONG, Appellants.

Supreme Court of Missouri.

March Term, 1867.

Appeal from Jasper Court of Common Pleas.

The court gave the instructions asked by each party, as follows:

Plaintiff's instructions.--1. If the jury believe that defendant Atherton, as teller of the Southern Bank, on the 25th of March, 1859, received as such teller from Archibald Gamble, on deposit in said bank, the sum of $744, and then entered the same as a deposit in the pass-book of said Gamble; and afterwards, and at different days and times between that day and the 25th April, 1859, and while he was still teller, and as such teller, he received from other persons and parties mentioned in the petition, in like manner, on deposit, large sums of money, amounting in the aggregate to over $40,000; and having as such teller so received all of said sums on deposit in said bank, he withheld and withdrew said sums from the bank, and applied the whole amount thereof to his own use, or to purposes not those of the bank,--in such case said Atherton and the securities on his bond became liable and bound in the penalty of the bond for the sums of money so deposited by said parties and withheld and withdrawn from the bank by said Atherton.

[For 2d, see opinion.]

Defendant's instructions, given:

1. Under the issues made by the pleadings, the burden of proof rests on the plaintiff to prove that the money sued for was embezzled or appropriated by G. O. Atherton after the bond read in evidence was made, and unless the plaintiff has shown in evidence to the satisfaction of the jury that said Atherton did embezzle or appropriate to his own use the money in question after the bond sued on was made, the jury should find for defendant.

2. Although the jury may find from the evidence that Atherton, while acting as teller, embezzled or appropriated to his own use some of the money of said bank, yet if the jury find that he embezzled or appropriated said moneys before the bond sued on was made, then as to such moneys the defendant Armstrong is not liable, notwithstanding the jury may also find from the evidence that said Atherton continued in the manner mentioned by the witnesses to elude or delay the discovery of his embezzlement or appropriation of money until after the bond sued on was made.

3. The burden of proof is on the plaintiff. The defendant Armstrong is only responsible for the amount of bank deposits appropriated by Atherton to his own use after the date of the execution of the bond sued on--that is, 21st March, 1859, and before the 25th April, 1859--and it devolves on the plaintiff to establish this amount in evidence to the jury. If the jury are satisfied from the evidence that the entire sum of money, as claimed to have been abstracted from the bank by Atherton upon the final settlement of accounts between him and the bank, had been used by Atherton in his private speculations before the defendant Armstrong became his security, they will find for the defendant Armstrong.

[For No. 4, see opinion.]

To the giving of instructions asked by plaintiff exceptions were duly taken.

Atherton having conveyed property to the bank, by which a large proportion of the defalcation was restored; and Carr and West, who were with Armstrong on the bond, and who had also been securities on the former bond, and were therefore, in any view of the facts, liable, having paid what the bank esteemed their proportion of the balance, and been released, a judgment was rendered against Armstrong for $6,666.66.

Napton and Krum, Decker & Krum, for appellants.

For the reversal of the judgment, reliance is altogether placed upon the two points raised by the instructions, and the exclusion of Atherton as a witness.

I. The instructions are conflicting and irreconcilable, and assume two opposite and contradictory theories of the law. This will be apparent upon a perusal of the 2d instruction given for the plaintiff and the last instruction given for the defendant, which are precisely the antipodes of each other. The only question which could admit of discussion in reference to the point, is, which of these conflicting theories of the law is the correct one? The position of the instruction for the plaintiff is, that if the public officer, during his second term, wrongfully and contrary to his duty withholds entries from the book for the purpose of concealing defalcations or embezzlements of money made during his first term, the securities on the second bond are responsible for the amount abstracted under the first. Our instructions assume the reverse of this to be the law, and assert that each set of securities are responsible for the actual losses or abstractions occurring during their respective periods of securityship; and, as we supposed, all the decisions of this court proceed on this latter hypothesis. The subject has been five times before this court, and in all the cases this is assumed to be the law where there are different sets of securities. Indeed, upon the theory which prevailed in the trial of this case, where defalcations have occurred, the last set of securities must always be responsible whether the money was abstracted during their securityship or that of their predecessors;--a doctrine that would render altogether superfluous and useless all the investigation made in the cases heretofore decided by the court in reference to the time when defalcations occurred, when each breach of trust occurred, and what amount of damages would be chargeable to each set of securities--Draffin v. City of Boonville, 8 Mo. 395; Todd v. Boone Co., 8 Mo. 431; Nolte v. Callaway Co., 11 Mo. 447; State v. Smith, 26 Mo. 226; City of St. Joseph v. Merlatt, 26 Mo. 233; State to use, &c. v. Paul's exec'rs, 21 Mo. 51.

II. Atherton was a competent witness under the act of February 12 1857--Sess. Acts, p. 181. This act provides that where one of several defendants has a defense peculiar to himself, and a separate judgment may be rendered, the co-defendants are competent witnesses for him in reference to such defense. This law has been before the court in five cases.--Garnier v. Lebeau, 30 Mo. 229; Schoeffer v. Kilmans, 30 Mo. 232; Vaughn v. Scade, 30 Mo. 205; Kleinmann v. Boernstein, 32 Mo. 314; Alexander v. Shortridge, 33 Mo. 349; Finley v. Robertson, 31 Mo. 384. The same law is copied from the New York Code, No. 397, and the case of Finn v. Gaston, 4 Smith, N. Y. 382, is a decision upon its construction.

III. Atherton was a competent witness after he was defaulted. See Garrett v. Ferguson, 9 Mo. 126; Conn v. Green, 9 Mo. 200; Hawley v. Levy, 8 Mo., and Brown v. Burns, 8 Mo., on this point of default.

WAGNER, Judge, delivered the opinion of the court.

This was an action on a bond in the penal sum of twenty thousand dollars, executed by the defendant Atherton as principal, and Armstrong, West and Carr as sureties to the plaintiff. The bond was dated and executed on the 21st day of March, 1859, and approved on the same day, and conditioned that Atherton should execute and discharge the duties of teller of the Southern Bank of St. Louis with integrity and fidelity, and well and faithfully perform and fulfill the trust reposed in him, and well and truly, at all times, when thereunto required, account for and render over all moneys, goods and chattels that might come into his hands or possession, so that no default, fraud or failure should happen or be occasioned by neglect or failure on his part to perform his duties as said teller. Under the appointment for which this bond was given, Atherton entered on the discharge of his duties as such teller on the 21st day of March, 1859, and continued to act till the 25th day of April next succeeding. The petition alleges a breach of the conditions of the bond, and states that said Atherton, while acting as teller under the appointment, abstracted and appropriated to his own use large sums of money belonging to the bank, and was a defaulter in a sum in excess of the penalty of the bond.

Atherton entered his appearance, and judgment was taken against him by default. West and Carr exhibited a release from the bank showing that they had paid two-thirds of the amount of the bond, and the suit was dismissed as to them. Armstrong alone defended, and in his answer denied that the money was abstracted or the defalcation occurred whilst Atherton was acting as teller by virtue of the last appointment; that is, between the 21st of March and the 25th of April, and during the time that he was one of the sureties; and averred that the money was taken and the fraud committed by Atherton when he was acting under a prior appointment, previous to the 21st of March, 1859, and before defendant was security on his official bond. For further answer he stated that before and at the time he signed the bond sued on, the bank had in force a rule or by-law, by which it was provided that the casher of the bank should carefully observe the conduct of all officers or persons employed under him; that he should daily examine the settlements of the cash accounts of the bank and take charge of the same, and whenever the actual account should materially disagree with the balance of the cash account, he should report the same to the president and directors of said bank without delay; and that it was his duty to ascertain by personal examination how the account stood, and to exercise a general and superintending control over the individual accounts and the affairs of the bank. He also alleged that the bank had another rule or by-law in force at the time he signed the bond sued on, whereby it was provided that a committee of three directors of the bank should be appointed by the board of directors, whose duty, among other things, should be suddenly, and without previous notice, to count the teller's cash book at least once in each month and as much oftener as they might deem...