Court Opinion

ID: 7993034
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:33:29.422799+00
Date Added: 2024-06-11T16:35:26.581982
License: Public Domain

Ethridge, J.,
delivered the opinion of the court.
The Laurel Oil & Fertilizer Company manufactures cottonseed oil and meal in Laurel, Miss., and maintains agencies for the buying and selling of its products in other places. Among the places at which it maintains an agency is Rassfield, in Jefferson Davis county, Miss., where, in 1914, it operated a cotton gin and seld hulls, cottonseed meal, and phosphates, and exchanged such products for cottonseed, and ginned and wrapped cotton for hire. *291Among the employees of this company ivas B. C. Cook, who was manager of its gin and its agent at Bassfield. The Laurel Oil & Fertilizer Company took out an indemnity policy with the appellant the Maryland Casualty Company, and among other employees whose fidelity was guaranteed was the defendant B. C. Cook. The policy as written provided that the insurance company, the appellant, would indemnify and reimburse the employer, the appellant, for all loss of money, securities, or other personal property of the employer which shall have been sustained by reason of any act or acts constituting larceny or embezzlement by any employee for which the insurance company is surety. It further provides that the employer shall, if so required by the company, and at the cost and expense of the company, use all diligence in prosecuting any employee guilty of an act entailing liability upon the company, civilly or criminally, as may be allowed under the existing, laws, and to give all information at its disposal and all of the assistance in its power to bring the employee to justice, and to aid the company in any suit brought by the company to obtain reimbursement from the employee or any one else in the premises for moneys which the company may have paid or become liable to pay by virtue of the bond. It was further provided that if at any time during the life of the bond the employer shall discover or in any way learn of any act or fact or receive any information tending to indicate that any employee is or may be intemperate, or that any employee may be gambling or indulging in other vices, the employer shall immediately give notice thereof by letter addressed to the company; that any condoning of any such acts, or compromise of any loss shall not be made by the employer without the written consent of the company, and that the company shall not be liable for any loss subsequently incurred through the act of such employee, unless the company shall Consent in writing. ■ As an exhibit to the declaration was an itemized account of the money sought to be recovered, for cash, meal, and phosphate, bagging *292and ties, and gin and bagging tie fees. The declaration alleged that two thousand and forty-six dollars was furnished the employee Cook, and that only one thousand eight hundred and twenty five dollars and twenty-seven cents was accounted for; that Cook had converted the balance to his own use, and demand had been made upon Cook for the money, which he had failed to pay.
The defendants demurred to the declaration, which demurrer was overruled, and pleaded the general issue and numerous special pleas. Among the special pleas filed the third alleged that the application for the bond for Cook contained a question to explain fully the duties of the said employee, and that the answer to this question was “Agent for the purchase of seed and handling our products ; ’ ’ and that the insurance company had no knowledge of the defendant’s managing a gin or operating a gin in addition to the duties described in the application. To this plea it was replied that the operation of the gin was a mere incident to occupy the time of Cook while acting as agent and handling the plaintiff’s products at Bassfield, and only required a small portion of his time. The fourth plea alleged that the contract of indemnity contained a warranty providing that “the employer shall, if so required by the company and at the cost and expense of the company, use all diligence in prosecuting any employee guilty of an act entailing liability upon the company under this bond, civilly or criminally as may be allowed under the existing laws, and give all information at its disposal and all the assistance in its power to bring the employee to justice, and to aid the company in any suit brought by the company to obtain reimbursement from the employee or his estate, or any one else in the premises, for moneys which the company may have paid or become liable to pay by virtue of this bond,” and that the Casualty Company made written request of the Laurel Oil & Fertilizer Company to prosecute at the cost and expense of the casualty company the said Cook for any act of larceny 'or *293embezzlement under its contract, and that the said Laurel Oil & Fertilizer Company declined to prefer charges and prosecute the said Cooli criminally, when requested so to do by the appellant casualty company. The plaintiff demurred to this special plea on the ground that this provision was contrary to public policy and void, and that the clause referred to does not require the plaintiff, appellee, to prosecute Cook criminally, but only requires the company to give such assistance and information to the defendant as it has at its disposal. The manager for appellee testified to furnishing Cook with certain supplies and moneys contained in the account made an exhibit to the declaration, and testifies that Cook did not pay for the supplies furnished, and that Cook admitted that the account for two hundred and twenty dollars and seventy-three cents was correct. The manager did not testify to any act or fact that showed that Cook had actually converted to his own use the property consigned to him, but merely testified that he admitted the charge or amount due under the account was correct, but did not testify that he confessed to any embezzlement or larceny or the personal taking for his own use of property of the company. The traveling representative of the Oil & Fertilizer Company went to Bassfield and checked over the accounts with Cook, and procured Cook to. sign a statement that the account exhibited was true and correct; but neither the manager nor the traveling representative testified to any act showing that Cook actually used or converted any of the money, to his own use, or that he made any confession of theft or embezzlement; the traveling representative merely stating that Cook said he could not account for the difference; that he thought he was entitled to some credits. Cook testified that he was not a bookkeeper and that he did not know whether the accounts of goods shipped him was correct or not, but he testified that on one occasion the building where the products of the appellee were stored was broken into and some of the products carried away. He *294further testifies that he did not have sufficient help to run the gin and wait on customers, and that on some occasions he permitted customers to load their own wagons and weigh them, and that in certain instances the bagging for wrapping cotton would overlap or become torn and have to he replaced, and that this occasioned some shortage. In this attitude of the record the circuit court granted a peremptory instruction for the Laurel Oil & Fertilizer Company, except as to seven dollars and fifty cents embraced in the account, which the proof showed was furnished to Cook’s wife.
We think there was error in granting this peremptory instruction, because, if Cook’s testimony was true, a shortage did not come about by any act of larceny or embezzlement on the part of Cook.
The court also committed error in excluding certain testimony offered by witness Cook, stating that he had not embezzled or stolen any of the property.
We think it was error to sustain the demurrer to the plea of defendant that the Oil & Fertilizer Company refused to file an information and prosecute Cook, though requested in writing by the Casualty Company to do so. Jt is not contrary to the public policy of this state for a citizen to make an affidavit charging another citizen with crime who is guilty thereof. It is rather the public policy of this state to have crime prosecuted, and each citizen of the state has a right to make an affidavit of any offense against the public law coming to his knowledge. It certainly is not contrary to public policy to prosecute criminals, and it is a reasonable contract where one party is insuring against acts constituting larceny or embezzlement to stipulate that the assured shall give information and institute prosecutions, where required to do so, of all offenses on the part of the employee insured against.
We do not deem it necessary in this case to pass upon the question whether it was lawful for the Laurel Oil & Fertilizer Company to operate a gin after the passage of *295chapter 162, Laws of 1911, nor what effect that law would have upon the contract rights in a suit of this kind. The appellant filed a plea setting up these facts, but withdrew the plea, and though he made the motion to strike out the evidence and grant a peremptory instruction, basing this as a ground therefor, we think the- court had a right to treat this defense as having been abandoned with the withdrawal of the plea. If the plea had remained in the file and been insisted upon, it might have been answered, and certain testimony might have been introduced which would not be relevant under the issues made by the present pleadings.
For the errors indicated, the judgment will be reversed, and the cause remanded.

Reversed and remanded.