Rollstone National Bank v. Carleton , 1884 Mass. LEXIS 67 ( 1884 )

Morton, C. J.

This is an action against the principal and sureties upon a bond, given on February 4, 1871, for the faithful performance of the duties of the principal obligor, Carleton, as clerk of the Rollstone National Bank. The condition is as follows : “ Whereas the said William A. Carleton proposes to become a clerk of said bank, and also to aid in the conduct of the clerical business of the Worcester North Savings Institution, a corporation duly established by law, and having their place of business with said bank: Now if the said William A. Carleton shall faithfully discharge all his duties as clerk of said Rollstone National Bank, and shall well and faithfully discharge all his duties as clerk of said savings institution, so long as he shall be employed as aforesaid, without losing, wasting, embezzling, or in any manner misappropriating any of the funds of said bank or savings institution, or of any persons or companies for which said corporations may be answerable, which may come under the care or control of said Carleton, as clerk aforesaid, then this obligation shall be void, otherwise shall remain in full force and virtue.”

At the trial it appeared that, at the date of the bond, Carleton was elected clerk in the plaintiff bank ; that he continued in the service of the bank until April, 1881, when he left; and that, during the last eighteen months of his service, he was guilty of defalcations and embezzlements of the plaintiff's funds. The defendant sureties requested the court to rule, as matter of law, that, upon the evidence, there was “ such a change in the duties of said Carleton from those of a clerical nature to those of paying and receiving the money of the bank, and such a change in his official relation from clerk or bookkeeper to that of teller, which latter office has a well-defined meaning in law, as to materially increase the risk of his sureties, and that they were thereby discharged from their obligation, and cannot be held liable for an embezzlement after such change.”

This request presents a mixed question of law and fact. There is no doubt that, if the bank had elected Carleton to a new and different office, the sureties would not be responsible for the discharge of his duties in such office. Or if, after the bond was executed, the bank imposed upon Carleton new functions, not within his proper duties as clerk, as understood and contemplated when the bond was given, it would discharge the sureties. But it is partly a question of fact as to what the parties meant when they guaranteed the performance of “ all his duties as clerk of said Rolls tone National Bank.” The word “clerk” does not necessarily import a person who performs the duties of a mere bookkeeper. It is a general name which may embrace many duties.

The bond must be construed with reference to its subject matter and the known situation of the parties; and, in the absence of any provision defining the duties of clerk, it was competent to show what the office of clerk was, and what were its known duties. The evidence in the case clearly justified the presiding justice in finding that “ the duties as clerk,” contemplated in the bond, did not mean merely the duties of a bookkeeper, but that they embraced the duty of receiving and paying out money at the counter of the bank. Indeed, the bond itself shows this to have been the understanding of the parties, as it expressly speaks of misappropriating any of the funds of said bank “ which may come under the care or control of said Carleton as clerk aforesaid.” And the evidence shows that, from the beginning, he performed the duty, to a greater or less extent, usually performed by a teller, of paying and receiving money.

W. S. B. Hophins f F. A. Grashill, for the sureties. H. 0. Hartwell, for the plaintiff.

In January, 1873, a change was made in the officers of the bank, the cashier being elected president, and the assistant cashier being elected cashier. But no change was made in the office held by Carleton. Although in two or three instances he is spoken of on the books of the bank as teller, the evidence is undisputed that he was never elected teller. On the contrary, he acted continuously, during his whole term of service, under his appointment as clerk, made when the bond was given. After April, 1873, he was relieved from his work for the savings institution, and performed more work for the bank in receiving and paying out money than he had before done. If it be admitted that he performed substantially the duties of a teller, we think this did not discharge his sureties. He performed them as the propier duties of the office of clerk, to which the bond applied. They were not new duties inposed upon him, but were the duties which it was contemplated by the bond that he was to perform. The change did not affect the identity of his office, nor of the kind of duties he was to perform. We are of opinion that the presiding justice of the Superior Court was justified in his finding that Carleton continued a clerk, and that there, was no such change in his duties as to discharge his sureties on this bond. It follows that the plaintiff is entitled to judgment for the penal sum of the bond. Pub. Sts. c. 171,. § 9.

The question whether the former judgment recovered against Carleton is conclusive evidence of the amount for which the sureties are liable is not properly before us. This is an action upon the bond, and judgment must be for the penal sum. Upon a hearing in chancery to ascertain the sum for which execution should be awarded, the question may be raised if the parties desire it. On such hearing, the question will be open whether the two actions are for identically the same cause, and also the question whether the sureties may not impeach the former judgment as fraudulent, upon the ground that the plaintiff made up a judgment upon the default of Carleton for the full amount of his defalcation, knowing that he had repaid the bank a large part of it.

Judgment for the plaintiff.