178 So. 280 | La. Ct. App. | 1938
There was judgment below in favor of plaintiff, as prayed for, condemning the defendant to pay $1,000, with 50 per cent., or $500, as a penalty, and $250 attorney's fees. The defendant has appealed.
The plaintiff herein, the Inter-City Express Lines, Inc., a Louisiana corporation, was engaged in the business of hauling *281 freight by motortruck from the city of New Orleans to points within the State of Louisiana. It operated about fifteen motortrucks. Its main office was in New Orleans, where it had two employees, Robert Basil Martin, whose integrity had been underwritten by the defendant company, and Miss Leonie Schwartz (now Mrs. McCarter). The manner in which the business was conducted appears to have been as follows: Freight consigned to plaintiff would be picked up at the shipper's door and delivered to the headquarters of plaintiff in the city of New Orleans, where it would be assorted according to its destination and loaded on trucks for transportation. It was Martin's duty to take the shippers' dray receipts and figure the amount of freight due on the shipments, make out the freight bills, which would be entered by Mrs. McCarter in a book known as the "pro-register." This entry would indicate the date of shipment, the amount due, consignees, etc. Manifests and freightbills were then made out by Martin and delivered to the drivers of the trucks, who would collect the freight, if not prepaid, and amount of the C.O.D. shipments for account of the shippers. When the trucks returned to the city of New Orleans, each driver would deliver to Martin all cash or checks received from the consignees. It was Martin's duty to deposit all collections in the bank of his employer. Mr. George Montague, the general manager of plaintiff company, became suspicious of Martin some time in August, 1934, when one of the corporation's checks was returned by the bank upon the ground that there were insufficient funds to clear it, whereupon he employed a bookkeeper or auditor by the name of Baudier for the purpose of checking Martin's accounts. Following an investigation lasting two months, Baudier reported to Montague that there was a shortage of $2,041.27. As soon as Baudier finished his audit, Martin, evidently believing that he was under suspicion, left his employment and took his books or papers with him. Upon receiving Baudier's report, Montague called at the office of Mr. Wm. H. Talbot, a member of the New Orleans Bar, who had long represented the Inter-City Express Lines, Inc., and who happened also to be the attorney for the Hartford Accident Indemnity Company, Martin's surety. Mr.Talbot promptly communicated with Mr. Dell of Langbehn Dell, the general agents in the city of New Orleans of the Hartford Company, giving details concerning plaintiff's claim. Mr. Talbot, Mr. Dell, and Mr. Montague met in Mr. Talbot's office several times and discussed the claim. On January 18, 1935, about two months after the matter had been brought to Mr. Talbot's attention, Dell wrote to Mr. Talbot requesting that the Inter-City Express Lines formally notify the Hartford Accident Indemnity Company in writing. On January 21, 1935, Montague wrote the Hartford Company at its home office as requested, inclosed a copy of Baudier's report, and offered to furnish any further information that might be desired. Under date of February 2, 1935, the Hartford Company, through Dell, advised Montague that, since Martin denied the shortage, it would be necessary for them to go into greater detail, and requested that the Inter-City Express Lines take the matter up with Mr. Talbot and supply all necessary data. Under date of February 6, 1935, Dell wrote the Inter-City Express Lines acknowledging proof of loss, but stating that it was insufficient to establish the claim and suggesting further conferences with Mr. Talbot concerning the steps necessary to put the claim in proper shape for handling. About this time it was evident that there was not likelihood of a settlement of the claim, whereupon Mr. Talbot declined to represent either of his clients in the matter, and the parties respectively employed the present able counsel, who prosecute and defend this action.
We shall first consider whether there has been proof of misapplication of plaintiff's funds.
The coverage of the policy is as follows: "Within sixty (60) days after satisfactory proof thereof, such pecuniary loss as the Employer shall have sustained of money or other personal property (including money or other personal property for which the Employee is responsible) through the fraud, dishonesty, forgery, theft, embezzlement, wrongful abstraction or wilful misapplication committed directly or in connivance with others."
Martin handled all the cash receipts, and there was discovered a shortage of $2,041.-27. Baudier, plaintiff's auditor, after some hesitation based upon the belief that it was improper for him to do more than report his findings, stated that Martin was unquestionably responsible for the missing cash.
John A. Peyroux, Jr., a certified public accountant, testifying as an expert on behalf of defendant, declared that, if *282 the sources of Mr. Baudier's information which formed the basis of his report were correct, the loss could be attributed to Martin alone. Baudier's report was based upon the records of the plaintiff which are not challenged as incorrect, therefore, presumably correct. Martin is shown to have appropriated money belonging to the company for his personal use upon several occasions. It is also proven that checks payable to the Inter-City Express Lines were indorsed by Martin and the proceeds put in his pocket. While the investigation was in progress or shortly afterwards, Martin abandoned his job and took his books with him and did not appear as a witness in the case, though the record indicates that he was in touch with the defendant insurance company. The evidence is more than sufficient to prove that Martin was responsible for the shortage.
We shall next consider the point raised by the defense with respect to notice. The provision of the policy, or bond, concerning notice reads as follows: "Upon the discoverage by the Employer of any dishonest act on the part of any employee the Employer shall give immediate written notice thereof to the Surety at its Home Office. * * *"
It is first contended by defendant's counsel, though somewhat feebly, that it was plaintiff's duty to notify it when Martin was first suspicioned by Montague in August, 1934. This contention is without merit. Plaintiff was under no obligation to inform the defendant company of its suspicions but only of knowledge of fraudulent or dishonest conduct on the part of its employee which might involve the liability of the surety. American Surety Company v. Pauly,
As soon as Montague acquired definite knowledge of Martin's shortage, which was upon receipt of the report of his auditor, he communicated with Mr. Talbot, the attorney for the defendant as well as plaintiff's own attorney, and Mr. Talbot promptly notified Messrs. Langbehn and Dell, the defendant's general agents in the city of New Orleans. Several conferences between Dell, Talbot, and Montague followed with the apparent purpose of settling the claim. On January 18, 1935, Dell requested that his principal be notified direct. On January 21, 1935, Montague complied with this request. Dell, however, had been notified by Talbot about two months prior to that time and had been discussing the matter with Montague as has been stated. There was no suggestion at any time before January 6, 1936, ten days before suit was filed, and twelve months after defendant's agent had been informed of the loss, that notice of plaintiff's claim had not been properly and promptly given. On the contrary, there was every indication that the claim was to be settled as soon as the loss was established to defendant's satisfaction.
In Wheeler v. London Guarantee Accident Company,
In the case at bar actual knowledge of the claim of plaintiff was given the general agents as soon as the plaintiff had definite knowledge of the existence of Martin's shortage. Notice of the claim was given to the general agents of defendant by their local attorney on or about the 10th day of November, 1934. The claim was discussed in conferences held in the attorney's office on several occasions during a period of more than sixty days, and it was not until January 6, 1936, that it was rejected upon the ground that timely and proper notice had not been given. It is true the policy required the employer to give "immediate written notice * * * to the surety at its Home Office" and that *283 this was not done, but that provision of the policy, like the provision in the accident policy considered in Wheeler v. London Guarantee Accident Company, supra, could be waived and is waived when the insured is led to believe that a notice given its surety's general agent is all that will be required. Our conclusion on this point, therefore, is that the insurer has waived the policy provision with respect to notice being sent to its home office.
The final question is that relative to penalties. Act No.
The claim for penalties is resisted upon the ground that a penal statute should be strictly construed, consequently, the failure of plaintiff to give notice, by registered mail, to the head office of the company, as required by the statute, is sufficient to defeat the claim of plaintiff for penalties. It will be noted that the act requires notice, by registered mail, to be given to the head office "or to any duly authorized agent of the said bond company in the State of Louisiana." It was argued that the alternative requirement regarding notice to the authorized agent need not be in writing since the statute does not impose this condition upon the second form of notice. However this may be, we are of opinion that the notice by registered mail, being a stipulation in favor of defendant, may be waived and, in our opinion, it has been waived in this case.
In Shreveport Laundries v. Massachusetts Bonding Indemnity Company, La. App.,
"As stated, it is the detailed information which the statute required that the defendant should receive, and while the statute points out that such statement shall be forwarded to the defendant, by registered mail, yet, as we have already held, the defendant had a perfect right to waive that specified requirement and, in our opinion, it did so in this case when it sent its agents to the office of plaintiff company and secured the same information first hand from an inspection of plaintiff's records. This all took place more than sixty days prior to the filing of this suit.
"In view of these conclusions, we hold that defendant is estopped to complain of plaintiff's failure to furnish that notice in the particular way pointed out in the act."
This is not a case such as that presented in Slidell Savings
Homestead Association v. Fidelity Deposit Company,
For the reasons assigned, the judgment appealed from is amended by reducing the amount of attorney's fees allowed to $150, and as thus amended is affirmed. Defendant to pay costs of both courts.
*284Amended and affirmed.