Sunderland Roofing & Supply Company v. United States Fidelity & Guaranty Company
| Decision Date | 25 June 1909 |
| Docket Number | 15,573 |
| Parties | SUNDERLAND ROOFING & SUPPLY COMPANY, APPELLANT, v. UNITED STATES FIDELITY & GUARANTY COMPANY, APPELLEE |
| Court | Nebraska Supreme Court |
APPEAL fro the district court for Douglas county: WILLIAM A. REDICK JUDGE. Affirmed.
AFFIRMED.
Baldrige & De Bord, for appellant.
McGilton Gaines & Smith, contra.
ROOT J. REESE, C. J., absent and not sitting.
This is an action to recover on a fidelity bond and a renewal thereof. The district court directed the jury to find for defendant, and plaintiff appeals from the judgment rendered upon their verdict.
1. One Snyder in April, 1904, had been in plaintiff's employ for a year and two months as bookkeeper and cashier. Defendant had guaranteed Snyder's financial fidelity to plaintiff for the year ending April 1, 1904. April 25, 1904, Snyder applied to defendant for another bond for the benefit of his employer for the year ending May 1, 1905, and sent with his application plaintiff's certificate, stating, among other things, that his accounts were audited April 23, and were correct in every particular. Defendant desired further information, and sent plaintiff a list of printed questions, which were answered on the same instrument. Thereupon the bond first described in the petition was executed. In answer to said questions, plaintiff by its secretary stated that Snyder was its cashier; that he handled incoming money for it and collected in the city (Omaha); that he would not be authorized to pay out cash in his custody in any amounts on plaintiff's account, and that he accounted to the secretary of plaintiff daily for funds and securities. The following questions and answers also appear in the statement last referred to: Plaintiff was informed by defendant that its answers to said questions would be taken as the basis of the bond, if issued, and as conditions precedent for said undertaking and any renewal thereof. The bond recites that it is issued in consideration of the premium paid, and upon the faith of said statements, which plaintiff warrants to be true, and as a condition precedent to the employer's right to recover upon the bond; that if said written statement is in any respect untrue, the bond shall be void.
Defendant alleges that the statements made in the certificate sent with Snyder's application were each and all untrue, and that the foregoing answers were each false and untrue, for that at the time said statement was made and answers were given Snyder was short $ 100 in his accounts, which fact an examination of plaintiff's books would have disclosed. The evidence indicates that Snyder's books and accounts were correct and his conduct honest up to the month of April, 1904. On the 15th day of that month he falsely increased the footing of accounts payable in the cash book $ 100, and failed to account for that sum. That subsequent to May 1, 1904, Snyder embezzled continuously from plaintiff during that and the following year, and by false entries in the books under his control, by padded pay rolls and other devices, kept the general ledger in balance so that the monthly trial balances submitted to his employers, indicated a correct course of business, and that he had accounted for the funds in his possession or under his control. It seems to have been the course of business in plaintiff's establishment for Snyder to submit to the secretary and president trial balances about the middle of one month, to exhibit the condition of the corporation at the close of the preceding month's business. Accompanying this trial balance were sheets containing an analysis of plaintiff's accounts with individual customers, which indicated the name of every purchaser who was indebted to plaintiff, and, in a general way, the age and amount of each account. The secretary and general manager would examine those statements and the general trial balance. Under the circumstances it was impossible for them during the middle of the month, to count the cash that was on hand the last of the preceding month, and the trial balance could only be verified in the improbable event that all cash received on the last day of the month had been deposited in the bank that same day. The transcripts submitted showing the condition of plaintiff's affairs at the close of business March 31, 1904, were thus examined April 23, 1904; but the accounts kept by Snyder between those days were not examined until subsequent to the execution of the bond in suit.
It is argued by plaintiff that the thirteenth interrogatory did not call for an examination of Snyder's books, but of his accounts; that plaintiff's officer was not asked the last date in the accounts examined; and that Edgerly, the secretary, did not know nor believe that Snyder was dishonest or that his accounts were incorrect; that the statements were representations merely, were believed to be true, were not relied upon by defendant, and that the jury, and not the court, should determine the good faith of the secretary, the materiality of the statements made and whether or not defendant relied thereon. If the thirteenth interrogatory stood alone and was considered without reference to the purpose for which the information was sought, it might be construed as plaintiff argues, but, when contemplated in connection with the fourteenth interrogatory and with relation to said purpose, it cannot in reason be thus interpreted. The fourteenth interrogatory not only asks if the accounts were correct, but whether at "that time" there were securities and funds on hand to balance. "That time" is the date the examination was made. The funds and securities on hand one day would rarely, if ever, balance the accounts and books of any preceding day. Nor could an auditor ascertain by inspection and computation on the 23d day of a month the funds and securities that were on hand the last day of the preceding month. Furthermore, if the accounts were not to be inspected down to the date of the examination, there is nothing in the language employed to indicate that any particular antecedent day should be selected as the time for striking a balance and inspecting the cash and securities on hand. However much counsel may disagree upon the though embodied in the questions submitted, we do not think it possible for any unprejudiced business man to read them and come to any conclusion other than that they could not be answered truthfully, or so as to give the...
To continue reading
Request your trial