40 Mo. 209 | Mo. | 1867
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 fulfil the trusts reposed in him, and well and truly, at all times, when thereunto required, account for and render over all
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 cashier 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
On motion, the court struck out all that part of the answer which related to the non-observance by the bank of its rules and by-laws, and also which set up as a defence the concealment by the officers of the bank that Atherton had been suspected of appropriating to his own private use money belonging to the Bank of the State of Missouxd.
The trial was before a jury, and on behalf of the defence Armstrong offered to px'ove by Atherton that the embezzlement or abstraction of the moxxey took place whilst he was acting as teller under a previous appointment and before the giving of the bond on which Armstrong was security. The evidence was rejected by the court on the ground that Atherton was a co-defendant and therefore incompetent. The jury rendered a vex'dict in favor of the plaintiff for 16,666.66, being one-third of the amount of the penalty of the bond on which judgment was entered. It is now insisted that the court erred in striking out part of the defendant’s answer ; that the release of West and Cax’r, the co-secui’ities, discharged the defendant from all liability on the bond; that Atherton was a competent witness, and that improper and conflicting instructions were given.
We cannot accede to the first propositioxx of the counsel for the defendant, that he is exonerated by reason of the negligence of the cashier and directors of the bank in failing to make frequent examinations of the affairs of the bank, to count the money, inspect the books, and generally to watch over its concerns. Their duties were,- perhaps, not as dili - gently performed as they ought to have been, but the rules and by-laws were simply directory. They were intended to px'escribe the duties of the cashier and dix’ectors, and a faithful compliance with them would no doubt result indirectly in favor of the sureties, by tending to an early and speedy disclosure of fraud; yet a failure to comply with them cannot be held as a pi’ecedent condition to the sureties’ liability.
The pxdnciple contended for would have the effect to de
Provisions by law that agents shall account and honestly and faithfully perform their duties, or bonds taken by corporations for the same purpose, are made by the government or by corporations for their own security ; but they constitute no part of the contract with the surety, nor can he take advantage of a neglect or a breach committed by others.
The release by the bank of West and Carr did not discharge Armstrong from his obligation on the bond. The two former had paid two-thirds of the debt, the amount for which they were liable, and their release did not enure to the exoneration of Armstrong from liability.—R. C. 1855, p. 873, § 14; Dodd v. Winn, 27 Mo. 501. Nor do we think that the omission of the bank, through its officers, to inform Armstrong that Atherton had been suspected of abstracting or appropriating money while connected with the Bank of the State of Missouri, constituted any defence.
It is not pretended that the imputation amounted to anything more than a bare suspicion, perhaps an idle rumor, destitute of tangibility or substance, and we, canúot perceive that any moral or equitable obligation rested on the bank to mako the disclosure. Had the charge assumed positive criminal form and shape, and had it been fraudulently con
■ The question of the competency of Atherton’s evidence .is next to be determined. The constant tendency of legislation has been to alter the rules of evidence so as to modify or abolish the many grounds that existed at common law to render witnesses incompetent to testify in many cases and for many reasons, till, at last, nearly all the barriers are thrown down. The act of 1855 destroyed the disability on account of interest, but still disqualified parties to the record. By the bill supplementary to the act concerning witnesses, approved December 1, 1855, (Sess. Acts 1857, p. 181,) it is provided that a party may be examined as a witness in behalf of his co-plaintiff, or of a co-defendant, as to any matter in which he is not jointly interested, or liable with such co-plaintiff or co-defendant, and as to which a separate and not joint verdict or judgment can be rendered. The construction of this act has been several times before this court, but the best considered and most satisfactory case that we have found is Robertson v. Findley, 31 Mo. 384. That was a case very similar to this; the principal and security were jointly sued on the bond ; the principal failed to answer and let judgment go by default, and the security offered him as a witness in his behalf to prove a fact which tended to release him from liability. The court held him a competent witness, and said that the defence relied on by the security concerned him alone, went to his personal discharge, and was one in which his co-defendant was not jointly interested or liable with him.
The matter set up, if sustained, would not affect the liability of the principal; the transaction, as to him, would remain -unimpeached, and his obligation would remain in full force. Atherton’s liability was admitted on the record, judgment had gone against him by default, and, so far as he was concerned, the transaction was past and completed. Whatever might be the liability of Armstrong, Atherton could not
The second instruction given for the plaintiff asserts, in substance, that if between the 21st day of March, 1859, and the 25th day of April thereafter, and while Atherton was teller of the Southern Bank of St. Louis, he, as such teller, received on deposit in said bank from various parties, mentioned in the petition, sums of money; such sums of money, from the time the same wese received on deposit by him as such teller became the money and property of the bank, and he and his securities on his bond under the bond were bound to the extent of the penalty of the bond for a proper use and application of the money ; and that although the defendant Atherton, before the 21st day of March, 1859, and before the execution and delivery of the bond sued on, had, under a former appointment and bond as teller for the said bank, committed frauds on the bank and secretly become a defaulter, and was so at the time of the execution and delivery of the bond sued on, yet that, if after the said 21st day of March, 1859, and while Atherton was still teller for the bank, he withheld from entry on the books of the bank divers sums of money received by him and deposited in the bank as such teller, and withdrew the said sums of money so deposited, and secretly applied the same to conceal his previous defalcations, such conduct was a fraud within the conditions of the bond sued on, and Atherton and his sureties were liable for the same, not exceeding the penalty of the bond.
The last instruction given for the defendant was, substantially, that if, from the manner in which the business and accounts of the bank was conducted, the precise amount of the defalcations, if there was any at all, during the period of Armstrong’s liability from the 21st of March to the 25th of April, 1859, was impossible to be ascertained, the defend
"We shall not comment on the evidence as to whether the facts show that Atherton, after the 21st day of March, 1859, from which time he was acting under the last appointment, actually abstracted and appropriated any of the money to his own use, or whether his delinquencies consisted in using the money so deposited for the purpose of concealing prior defalcations and embezzlements, though the case was argued at the bar, by the counsel on each side, solely on the latter hypothesis. Where an officer proves a defaulter, and has held the office under different appointments with several sets of sureties, it must now be conceded by established precedent that the sureties will be responsible who were on the bond at the time the defalcation occurred—Draffin v. Boonville, 8 Mo. 395; Todd v. Boone County, id. 431; State v. Smith, 26 Mo. 226; Smith v. Paul’s exec’rs, 21 Mo. 51; Drury v. Drury, 36 Mo. 281.
The law, as laid down by the above authorities, was given by the court, but there is a direct inconsistency and conflict between the two instructions which we have referred to. One must be wrong; they cannot both be right, and it is impossible to tell on which the jury predicated their verdict. There may be different hypotheses of fact, but there can be but one theory of law. The instruction for the plaintiff tells
The counsel for the plaintiff, to sustain the instructions of the court below, principally rely upon the case of Ingraham v. Maine Bank, 13 Mass. 208. It appears in that case that one Hale was reappointed cashier of the bank, but before such reappointment he had been guilty of frauds on the bank, and afterwards, previous to an examination by the directors into the state of their cash, he borrowed money as such cashier from other banks, giving the checks of the bank for the same and placed it in the vault to conceal prior defalcations, and after the examination he took out the money
There has been another point made here about the admissibility of certain evidence that was received on the trial, but we have seen nothing objectionable in the action of the court in admitting evidence.
For the giving of wrongful and conflicting instructions, and refusing to permit Atherton to testify, the judgment will be reversed and the case remanded.