#### Goldman, Respondent, vs. Fidelity *&*Deposit Company of Maryland, Appellant.

*May 6*

June *23, 1905.*

*Guaranty insurance: Employee’s dond: Pleading: Defenses: Warranties: Trial: Province of jury: Witnesses: Appeal and error: Bill of exceptions: Defenses: Notice: Waiver: Evidence.*

*1.*In an action on a bond given by defendant to secure plaintiff against the embezzlement of an employee, the falsity of written statements given by the employer as the basis of the bond applied for, whether representations or warranties, to be available must be expressly pleaded.

2. In such case plaintiff is not required, in the first Instance, to prove the truth of all his statements nor to negative all possible grounds for forfeiture. It is for the defendant to point out such of these as are depended on for defense.

3. It is for the jury to weigh and resolve inconsistent statements of parties and witnesses.

4. When an examination of the evidence discloses some which the jury might deem credible and sufficient to support their conclusions, their verdict will not be disturbed on appeal.

5. When the statement of an employer, in answer to questions-asked as a condition precedent to and as the basis of bonding an employee, declared that the largest amount of cash in the custody of the employee at any one time was “about $50,” such answer is so indefinite as to refute the idea that it was a warranty.

6. In such case an affirmative answer to a question of a special verdict: “Did the duties of said O., as G.’s employee, make him the custodian of a larger amount of plaintiff’s cash at any one time than about $50,” does not defeat a recovery by plaintiff,, since only a general conduct of business, whereby customarily a larger amount of money was allowed to be in the employee’s, hands, could have such result.

7. Error is not to be presumed but must be made to appear, and the supreme court will therefore assume that documentary evidence not appearing in the bill of exceptions supported the conclusion of the trial court.

8. In an action on a bond given to secure plaintiff from embezzlement by the employee bonded, a failure to give the surety the-notice required by the conditions of the bond is *held*waived. *391by taking the various steps stated in the opinion, and finally joining issue without predicating any defense upon such delay.

9. In such case the evidence, stated in the opinion, is *held*sufficient to warrant the jury in finding embezzlement to the amount of their verdict.

Appeal from a judgment of tbe circuit court for Brown county: Samuel D. HastiNgs, Circuit Judge.

*Affirmed.*

Action upon a bond conditioned for tbe reimbursing to tbe plaintiff such pecuniary loss as be might suffer by any act of larceny or embezzlement on tbe part of one O’Brien, bis employee; tbe complaint alleging an embezzlement to tbe amount of $470. Tbe bond was issued upon tbe application of O’Brien, but, before its issue, a statement from tbe plaintiff was obtained upon a written blank declaring tliat tbe company desired answers to tbe questions therein as. conditions-precedent and as tbe basis of the bond applied for, answers-to which questions were inserted by plaintiff and the same’ signed by him. Tbe bond provided it should become void if tbe employer should fail to notify tbe company of the discovery of any act which might be made tbe basis of any claim thereunder, immediately after it should come to tbe knowledge of tbe employer. Tbe plaintiff’s written statement; among other things, declared that tbe largest amount of cash in tbe custody of O’Brien at any one time was “about $50,” which would remain in bis control for about a week; that be would send in moneys every week and make regular settlement once a month; also that O’Brien bad been in plaintiff’s employ for about six months, .and that bis accounts bad been examined tbe month previous to-tbe application and found correct. Tbe answer alleged tbe falsity and failure to observe some of these declarations, and also failure of plaintiff to immediately file with defendant an itemized claim for certain embezzlements by O’Brien committéd between May 1 and June 18, 1902, and made the basis of this action. A special verdict was taken, in which tbe jury found (1) prior *392employment of O’Brien for six months; (2) examination of bis accounts the month prior to plaintiffs written statement; (3) that the duties of O’Brien as employee made him the ■custodian of a larger amount than about $50 of plaintiff’s ■cash at any one time; (4) that such amounts were not left in O’Brien’s hands longer than about a week; (5) that plaintiff did require of O’Brien monthly statements, and examined his books to ascertain their correctness; (6) that he did give immediate notice upon discovery of the fact of O’Brien’s conversion of money or goods; and (7) did immediately file his itemized claim, and that the amount of the embezzlement was $470.40. Before verdict, defendant moved for direction of verdict in his favor; after verdict, upon motion to change certain answers by the respective parties, the court changed the answer to the sixth question from “yes” to “no,” but held that the undisputed evidence showed a waiver of any forfeiture resulting from the omission to immediately notify defendant, and also held that the third answer, while not changed, had no evidence to support it, further than the fact that in the last interval O’Brien did obtain possession of $106 of plaintiffs money. He also held there was no evidence to support a finding of more than $398.54 as converted, and accordingly rendered a judgment for that sum, with interest and costs, from which the defendant appeals.

*Samuel H.*Gady, for the appellant.

Eor the respondent there was a brief by *Wigman, Martin <& Martin,*and oral argument by *P. H. Martin.*

Dodge, J.

Certain general views and conclusions will dispose of a considerable number of the very many objections raised by appellant to a recovery upon the guaranty bond, without the necessity of detailed consideration. Among such is the rule that neither falsity of any of the statements contained in plaintiff’s so-called “application,” whether they be deemed representations or warranties, nor any omission upon *393wbicb, under tbe bond, appellant might claim a forfeiture, •can be available except as they have been expressly pleaded. The plaintiff is not required, in the first instance, to prove the truth of all the statements contained in his application nor to negative all possible grounds of forfeiture. It is for the defendant to point out such of these as it elects to depend upon for defense. *May v. Buckeye Mut. Ins. Co.*25 Wis. 291; *Redman v. Ætna Ins. Co.*49 Wis. 431, 4 N. W. 591; *Benedix v. German Ins. Co. 18*Wis. 77, 47 N. W. 176; *Johnston v. N.*W. *L. S. Ins. Co.*94 Wis. 119, 68 N. W. 868; *Chambers v. N.*W. *Mut. L. Ins. Co.*64 Minn. 495, 67 N. W. 367; *Bank of Tarboro v. Fidelity & D. Co.*128 N. C. 366, 38 S. E. 908.

A careful examination of the evidence discloses some which the jury might have deemed credible and sufficient to support their findings upon the first, second, fourth, fifth, and seventh issues mentioned in the statement of facts. True, as to several of these, apparently inconsistent statements were made by the plaintiff, but such inconsistencies were for the jury to weigh and resolve, and in their judgment to reach the real truth of such matters, and we are unable to say that there was ■entire lack of credible evidence to support their conclusions above catalogued.

The only remaining pleaded defense is the alleged failure •of the plaintiff to limit the amount of his money in the hands •of O’Brien, at any one time, to about $50. On this question the jury found with the defendant. The trial court ignored that finding upon two grounds, stated in his opinion: First, that the statement in the application on this subject was so indefinite as to refute the idea that it was a warranty; but, •secondly, that the finding was not supported by the evidence in a sense to defeat recovery, for the reason that only a general conduct of the business, whereby customarily a larger amount of money was allowed to be in O’Brien’s hands, could have such result, and that there was no evidence that such *394larger sum bad ever been allowed to come into bis bands at any one time until tbe time of bis embezzlement, wbicb was sporadic and out of tbe ordinary course of events, and which immediately aroused plaintiff to activity to put a stop to such conduct by discharging O’Brien. In this view of tbe law we-think tbe trial court was correct. Tbe indemnity of this bond was against just such misconduct of tbe employee in breach of' bis instructions and of tbe customary precautions wbicb bis employer exercised, and tbe fact that, when be undertook to acquire to himself and embezzle bis employer’s money, be was able to make such attempts successful to tbe extent of' some $106 before bis delay in reporting and remitting bad aroused bis employer to suspicion and interference, was no proof that in tbe conduct of tbe business be bad been allowed to exceed approximately tbe sum of $50. Apart from this-one instance there is no proof in the record as to tbe amount of bis periodical collections wbicb occurred during one week in each month; but it does appear that certain itemized lists of such collections were introduced in evidence, and were, of’ course, before tbe trial court in rendering bis decision. These would very probably indicate, approximately at least, tbe amount wbicb O’Brien customarily obtained on each of bis monthly collecting tours. But tbe appellant has failed to-preserve in tbe bill of exceptions any copy of these statements from wbicb we can approximate that information. We must therefore, under tbe familiar rule that error is not to be presumed but must be made to appear, assume that- these statements served to support tbe trial court’s conclusion that there-was no evidence of a breach of this statement in tbe application, even if tbe same were deemed to be a warranty.

Another subject upon which much is said in appellant’s: brief is tbe failure of plaintiff to immediately notify tbe defendant upon discovery of O’Brien’s misconduct. His suspicions were not aroused until about tbe 18th of June, when-be immediately went and found O’Brien in an unintelligible-state of intoxication, made effort to regain from him tbe prop-*395orty in Ms hands, and, as soon as possible, to obtain information from him and to protect himself as far as he could against the loss, which effort seemed to have occupied him until the 5th or 6th of July, when he returned home, and on the 1th of July sent notice to the defendant. The court set aside the finding of the jury that this notice was given immediately, but held that the right of forfeiture which might be predicated upon such failure had been waived. This defense would seem to be unavailable to the defendant in any event because not pleaded, but, since it was treated as before the trial court, we should perhaps say that we agree with his conclusion of waiver. Defendant made no objection on this ground, but called on the plaintiff to make effort to get a settlement with O’Brien, then to make up his itemized claim or-proofs of loss, which were made about October 20th, and thereafter called upon plaintiff to take steps for the criminal prosecution of O’Brien in accordance with a provision contained in the bond, and later called upon him to aid an agent, of the defendant in an extended investigation of the accounts to ascertain the amount of the shortage. Defendant contends, that it could not be charged with waiver until it had knowledge of the delay in sending this notice. That may be conceded, but when in October it was furnished, with plaintiff’s itemfced claim, it would seem that it must have had such information, for that claim was required to give the dates of the embezzlements and other information. That itemized claim was in evidence, open to inspection by the trial court, but has not been included in the bill of exceptions, so that again wre must indulge in the presumption, if necessary, that it supplied facts upon which the trial court based its conclusion. If information was then conveyed to the defendant of this delay in sending the notice,' there can be no doubt that the calling on the plaintiff to' take various steps thereafter and finally joining issue in this action without predicating any defense upon such delay must be construed as a waiver thereof. *Cannon v. Home Ins. Co.*53 Wis. 585, 593, 11 *396N. W. 11; *Kidder v. Knights T. & M. L. Ind. Co.*94 Wis. 538, 69 N. W. 364; *Fraser v. Ætna L. Ins. Co.*114 Wis. 510, 90 N. W. 476.

The only remaining question is as to the proof of O’Brien’s embezzlement. On this subject his entries, reports, and statements made in the course of his duties in the guarantied employment are admissible against the surety. *Stephens v. Shafer,*48 Wis. 54, 65, 3 N. W. 835; *Clark v.*Wilkinson, 59 Wis. 543, 551, 18 N. W. 481; *Bank of Tarboro v. Fidelity & D. Co.*128 N. C. 366, 38 S. E. 908; *Lancashire Ins. Co. v.*Callahan, 68 Minn. 277, 71 N. W. 261. Proof was made of certain such statements and admissions from which, in connection with the accounts and records kept by plaintiff, he claimed to be able to state the amount, both of money and goods, which O’Brien had appropriated to his own use. Besides this, it was shown that defendant’s agent, upon mutual 'investigation of such accounts and records, concurred with plaintiff in finding the shortage as stated and allowed by the judgment. This was sufficient to warrant’the jury in finding embezzlement to that amount. We find no reason to reverse.

*By the Court.*— Judgment affirmed.