Williamstown Creamery Ass'n v. American Sur. Co. of New York
| Decision Date | 13 March 1928 |
| Docket Number | 38854 |
| Citation | 218 N.W. 474,205 Iowa 830 |
| Parties | WILLIAMSTOWN CREAMERY ASSOCIATION, Appellant, v. AMERICAN SURETY COMPANY OF NEW YORK et al., Appellees |
| Court | Iowa Supreme Court |
Appeal from Chickasaw District Court.--CARL W. REED, Judge.
Action upon a surety bond. The facts are stated in the opinion. There was a directed verdict for the defendant American Surety Company, and the plaintiff appeals.
Affirmed.
R Feyerbend and M. F. Condon, for appellant.
Geiser & Donohue, for appellee.
STEVENS C. J. DE GRAFF, ALBERT, MORLING, and WAGNER, JJ., concur.
The appellee T. B. Condon, during the month of December, 1924, and for several years prior thereto, was the treasurer of the appellant, Williamstown Creamery Association, Incorporated. As such treasurer, he executed a bond to the corporation in the penal sum of $ 5,000, with the appellee American Surety Company of New York as surety, indemnifying his principal against loss resulting from embezzlement. The material conditions of the bond were as follows:
"We, T. B. Condon, as principal, hereinafter called the 'employee,' and the American Surety Company of New York, as surety, bind ourselves to pay Williamstown Creamery Association, Williamstown, Iowa, as employer, such pecuniary loss, not exceeding five thousand dollars, as the latter shall have sustained of money or other personal property (including that for which the employer is responsible), by any act or acts of larceny or embezzlement on the part of the employee, directly or through connivance with others, while in any position or at any location in the employ of the employer; this suretyship to begin March 19, 1924, and to end, (a) with the date of the learning by the employer either of loss hereunder or of dishonesty on the part of the employee, or (b) with the date of the retirement of the employee from the service of the employer, or (c) with the date of termination of the suretyship by the surety or the employer in the manner hereinafter set forth in Clause 7."
Condon was also president of the State Bank of New Hampton, in which his account as treasurer was kept, in the name of the Williamstown Creamery Association. On December 28, 1924, the bank was closed, by order of the state superintendent of banking, who promptly took charge of its assets, as receiver. The bank was wholly insolvent, and has paid, or will pay, but a small percentage of the amount due to depositors. Condon was the manager and executive officer of the bank until April, 1924, when E. J. Armstrong, by order of the superintendent of banking, took practical charge thereof, and, with Condon, managed the bank until it was finally closed, in December. This action against the American Surety Company proceeds upon the theory that Condon received and deposited the funds of the appellant in his bank with full knowledge that it was bankrupt, and that, by reason thereof, he wrongfully, fraudulently, and feloniously converted the same to the use and benefit of the bank, and thereby committed the crime of larceny by embezzlement.
A motion to direct a verdict in favor of the appellee surety company was sustained by the court upon two grounds: namely, that the evidence was not sufficient to sustain the charge of embezzlement, and that appellant failed to give the notice to appellee at its home office in the city of New York of the alleged embezzlement within 60 days after learning thereof, as required by the terms of the bond.
First, is there any evidence from which the jury could rightfully have found that any portion of the funds of appellant were embezzled by Condon for his own use and benefit, or that of the bank? The applicable statute defining embezzlement provides that:
"If any officer * * * of any corporation * * * in any manner * * * embezzles or fraudulently converts to his own use, or takes and secretes with intent to embezzle or convert to his own use, without the consent of his employer, master * * * any money or property of another, * * * he is guilty of larceny." Section 13031, Code of 1924.
The method of depositing and handling the funds of appellant was for the president or secretary thereof to deliver or forward checks or drafts received by it to the bank for credit. When received or presented at the bank, the checks or drafts were indorsed in the name of the treasurer by...
To continue reading
Request your trial