Court Opinion

ID: 4941147
Source: CourtListenerOpinion
Date Created: 2021-09-24 01:26:51.765432+00
Date Added: 2024-06-11T08:14:53.988276
License: Public Domain

Murchie, J.,
concurring in result. I concur in the opinion of the majority of the court that under the particular fidelity bond, discovery by the employer, after the beginning of the suretyship period, that an employee had embezzled funds prior to the commencement thereof, did not terminate the bond as to that particular employee. Such decision seems to come within the established rule that any ambiguity in the contract of a compensated surety shall be construed against the insurer. According to my view, however, the action of the plaintiff in diverting a part of the subsequent earnings of the employee to the liquidation of his prior default would have been, if properly pleaded, a pro tanto defense to any recovery for subsequent defalcations.
The case is absolutely without precedent in this, or any other, jurisdiction. The record discloses that the employee had stolen approximately $1,050 when the bond was written, and $73.95 in about seven months thereafter before discovery of his earlier dishonesty. The employer, upon such discovery, arranged to retain $20 per week from his salary, and an indeterminate amount in commissions, to apply upon his unbonded defalcations. In the ninety-six days following, and while $3.33 per day (disregarding commissions) was being diverted from his earnings, he stole an additional $363.16. His peculations in the seven-month period averaged about thirty-five cents per day, and in the ninety-six day period about $3.75 per day.
Recital in the majority opinion is that the employee “paid” whatever amount was recovered against the old default in the ninety-six day period. I do not so read the record. The facts as stated in the court below were that the plaintiff “took a note . . . and agreed to deduct. .. weekly ... a certain amount.” In the bill of exceptions the statement is that the “plaintiff . . . *94took a note ... and thereafterwards ... did deduct the sum of $20 per week.” To my mind there is a distinction between such facts and payment. The plaintiff was unwilling to trust the employee to make an agreed weekly payment out of his earn-ingsj yet was willing to trust him, at the risk of his insurer, to handle money not his own. Had he been trusted to handle his own earnings and made voluntary payments on his old default, I would be in entire accord with the opinion, but I cannot subscribe to the view that a party insured can trust an employee at the risk of an insurer when unwilling to do so at his own.
The defendant having elected, however, to plead the action of the plaintiff as a termination of liability rather than in mitigation of damages, and having assented before the court below that if the plaintiff should be found entitled to recover for defaults subsequent to the discovery aforesaid, the amount of the recovery should be $443.11,1 join in the mandate

Exceptions overruled.