183 A. 806 | Pa. | 1936
Argued January 10, 1936. Appellee contracted to pay appellant all direct pecuniary losses sustained by the latter through "any act or acts of fraud, dishonesty, larceny, embezzlement, forgery or wrongful extraction" committed by any of appellant's employees. It was in the business of financing the purchase of automobiles by dealers who were to repay the amounts loaned to them promptly when sales were made. In order to ascertain whether any cars had been sold without repayment of the amount loaned, an employee, Gregory, was charged with the duty of checking the cars at the dealer's place of business. Gregory recorded the results of his inspection on a wholesale car check report, signed by him, which contained the printed statement: "I have personally seen and checked the auto numbers on the cars listed above, and certify that the information given is correct." The facts show that Gregory relied on the dealer for his information and did not personally check the cars, with which the dealer was charged, to see whether they were on hand. On April 20, 1931, it was discovered that Kennedy, a dealer, had sold a number of those which Gregory had reported as unsold, and appellant thereby suffered a loss.
The court below charged the jury that while the terms "fraud and dishonest" as used in the bond embraced acts not necessarily criminal in nature, there must, nevertheless, be a showing of a design or intent upon Gregory's part to circumvent his employer by cunning or deception in order that his acts might constitute fraud and dishonesty under the terms of the bond, and that mere carelessness, laziness or neglect would not entitle plaintiff to recover. The jury found for appellee and, on the entry of judgment, this appeal was taken. *211
The theory of appellant's case here is that the bond covered "legal" fraud and that, therefore, the court below should have directed a verdict for the appellant since the undisputed documentary evidence (reports submitted by Gregory) showed a false statement by Gregory in that he asserted that he had seen and checked the cars when, in fact, he had not done so. Obviously, if appellant is correct, it was entitled to a verdict and judgment.
The construction of the language quoted above presents a novel question in this jurisdiction. In other states it has been held that fraud and dishonesty are not shown as a matter of law by the fact that an employee pays out funds in violation of his instructions: World Exchange Bank v. Commercial CasualtyCo.,
We must be guided by the terms of the bond itself (Equitable Trust Co. v. National Surety Co.,
The charge of the court was correct and, since the nature of Gregory's acts had to be judged from oral evidence, it became a question for the jury: Nanty-Glo Boro. v. American SuretyCo.,
Judgment affirmed.