Amer. Telegraph Co. v. Lennig ( 1891 )

OPINION,

Me. Justice Cl abe:

This action was brought by the American District Telegraph Company of Philadelphia against Ambrose T. Secor and George G. Lennig, upon a bond dated May 3,1882, for $500, conditioned that Ambrose T. Secor “ shall and will faithfully perform the duties of the office or employment of book-keeper, to which he has been appointed in the service of the said company, so long as he continues in said office or employment, and shall faithfully account for and pay over to the said company any and all moneys which may come into his hands, as the agent, employee, or officer thereof,” etc.

The plaintiff in its statement avers (1) that Secor, at various times between May 31, 1884, and May 8, 1886, whilst performing the duties of his office of book-keeper for the plaintiff, made certain false entries on the plaintiff’s books, by means whereof the plaintiff was defrauded of large sums of money, in the aggregate amounting to $4,000, and upwards; and (2) that about June 9, 1884, Secor was by the plaintiff requested to assume, and he did assume, the duties of cashier of the company, in addition to his duties as book-keeper, which latter position he continued to occupy, and that in his said office of cashier he embézzled other sums of money, amounting to $1,000, at various dates prior to May 8, 1886, when he fled the country.

When the testimony was closed at the trial, the court instructed the jury that, upon the evidence, their verdict should be for the plaintiff, for the amount of the bond, and interest; and a verdict to that effect was accordingly entered. This peremptory instruction of the court is the error assigned.

Although the condition of the bond is, not only faithfully to perform the duties of book-keeper, but also to account for and pay over to the said company all moneys which may come into his hands “ as agent, employee, or officer thereof,” Lennig, the surety, is held only for the peculations of Secor as book-keeper, and not as cashier, of the company. We agree with the appellant that, when one becomes surety upon a bond which recites that the principal has been appointed to a particular office, mere general words in the condition of the bond will not, in the absence of a clear intent to the contrary, extend the liability of the surety to acts of the principal, after a change in that office. The recital in the bond, undertaking to express the precise intent of the parties, controls the condition of the obligation which follows, and does not allow it any operation more extensive than the recital, which is its key, and it has been so held in many cases: National Banking Ass’n v. Conkling, 90 N. Y. 116, and cases there cited.

It is a well-settled principle of law, that the obligation of a surety cannot be extended by implication, beyond the terms of his contract. He is bound only to the extent, and in the manner, and under the circumstances pointed out in his obligation; and if the principal parties, without his consent, change the contract in a material part, so as to affect the nature and extent of his responsibility, he is discharged. It follows, that where there is a bond of suretyship given for the faithful performance of the duties of an office, and the duties and responsibilities pertaining to the office are by tbe obligee materially changed, so as to affect the surety, the bond, as to him at least, is thereby discharged. But the surety will not, in general, be relieved from responsibility merely because the act of his principal which occasioired the loss was not strictly in the line of the duties of his office, or was done in the course of a temporary or casual performance of other duties, at the request of his employer: German Bank v. Auth, 87 Pa. 419; Detroit Bank v. Ziegler, 49 Mich. 157; Rochester Bank v. Elwood, 21 N. Y. 88; Mayor, etc., v. Kelly, 98 N. Y. 467. The duty of Secor, as book-keeper, was to keep the books of the company; but if, in the temporary absence of Mr. Wood, the secretary and assistant treasurer, he should for the time being act for and in behalf of that officer, and receive moneys from the collector, as it is alleged in frequent instances he did, it cannot be doubted, that, as this was merely incidental to his regular employment, Mr. Lennig would be held for his faithful application of the money. So, too, if the book-keeper, taking advantage of the trust reposed in him as an officer of tbe company, had stepped aside from his ordinary and proper duties, and rifled the money drawers, or otherwise appropriated to his own use the company’s money, although the books were in eve^ respect correctly kept, the responsibility of his surety for the money taken would not be questioned, for the import of the surety’s obligation is that the book-keeper was entitled to trust and confidence, and that he will be honest and faithful.

But it is not charged that any false entries were in the company’s books, or that the company was defrauded of any money by Secor, until on and after May 31,1884. There is some proof of a lead-pencil addition in the plaintiff’s ledger, which it is now contended may have been made about April 30,1884; but this is not set forth or specified in the plaintiff’s statement of claim, to which, of course, the case is necessarily confined. The first fraudulent entry complained of, as we have said, was made by Secor on May 31, 1884, in the account entitled “ Lesyeas District Collection Account.” By that entry it is charged, and the evidence tends to show the fact, that Secor falsely set forth in figures that the sum total of credits due by the said Lesyeas amounted to $16,760.77, whereas in truth these credits amounted to $16,202.49 ; that he falsely stated the debt of Lesyeas to be $3,772.15, whereas in reality it was $4,330.43 ; and that by this means he fraudulently concealed his own embezzlement of $558.28 of the company’s money; and, further, that this false entry was continuously carried through all the subsequent accounts under that title. But whether this was a false or fraudulent entry, whether it was made by Secor whilst he remained in the company’s employment as a book-keeper, and whether the plaintiff was damaged or defrauded thereby, as alleged, were matters of fact, we think, which under proper instructions should have been submitted to the jury.

It appears that in the early part of the month of May, 1884, Mr. Wood resigned his position as secretary and assistant treasurer, to take effect on the 16th of May in that year. On that day his resignation was accepted, and, under instructions from the president, he turned over all the money, books, papers, etc., to Mr. Secor, whom the president on the same day appointed cashier pro tempore. Secor from that date was the acting cashier until June 9, 1884, when, by the action of the board of directors, be was formally appointed cashier of tbe company. Prior to this, the company had no officer of that name. His duties as cashier do not appear to have been defined, but, as the duties of that office are commonly understood, he was put in charge of the money, with superintendence, perhaps, over the payments and receipts of the company. The president may not have had the general power of appointment, but, as the executive officer of the company, it was his duty, and he had the power, to provide for the emergency and until a meeting of the board might be conveniently had.

From Majr 16,1884, therefore, until he absconded, Secor held an office entirely distinct in its duties and responsibilities from that of book-keeper, and it is plain that Mr. Lennig was not held upon his bond for the fraudulent acts of Secor as the cashier; the question is, whether or not he remained liable for his acts as the book-keeper.

Of course, if the effect of Secor’s appointment to the new office, by the terms of that employment, or from the nature of the duties to be performed, had been to terminate his office as book-keeper, the liability of his surety would thereby come to an end: National Banking Ass’n v. Conkling, 90 N. Y. 116; Pybus v. Gibb, 6 El. & Bl. 902. But, if there was merely an addition of duties, different in their nature from those which belonged to the office for which the bond was given, and these duties were undertaken as a new, distinct, and additional employment, which did not interfere with the performance of the duties of book-keeper, it seems plain that no increased responsibility or risk would thereby be imposed on the surety, and the new appointment could not, therefore, have the effect to discharge the bond, given as a security for the performance of the duties first assumed. Neither the imposition of additional, distinct, and consistent duties, nor the appointment of the principal to an additional office, would necessarily relieve the surety on his bond, if the new duties or the new office have no such connection with the old as to interfere with or affect the original employment: Mayor, etc., v. Kelly, 98 N. Y. 468; Rochester Bank v. Elwood, 21 N. Y. 88. The testimony on this branch of the case, it must be conceded, is vague and unsatisfactory. The keeping of the books would not ordinarily fall within the scope of a cashier’s employment; and yet Seeor, who was the cashier, at the same time acted as the book-keeper. The question was for the jury, and we think the court erred in assuming the material facts of the case to'be undisputed or admitted, when they were seriously in dispute, and in giving binding and peremptory instructions to find for the plaintiff.

The judgment is reversed, and a venire facias de novo awarded.