Piggly Wiggly Yuma Co. v. New York Indemnity Co.

California Court of Appeal Sep 10, 1931 No. Docket No. 412.Published

Before: Allen

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Holding. The court held that the defaulting employee's confession was admissible against the surety and that the employee's execution of a promissory note did not constitute a settlement of the loss under the bond's terms.

Issues

Whether the defaulting employee's confession of embezzlement was admissible against the surety.
Whether the employee's execution of a note for the embezzled amount constituted a settlement of the claim under the bond.
Whether the plaintiff's business books were admissible to prove the amount of loss.

Disposition. Affirmed

Quotations verified verbatim against the opinion

“The testimony offered was the statement made by the defaulting employee at the time he was first accused by plaintiff of his embezzlement.”

“Without some evidence to show that the parties intended that the note be a payment of the debt and a settlement, the court was justified in holding that it was given as evidence of a debt rather than a payment.”

ALLEN, J.,

pro tem.

The defendant in this action appeals from a judgment on a bond which it issued to plaintiff. On February 25, 1927, defendant issued this bond indemnifying plaintiff against any loss it might sustain after February 9, 1927, by reason of any act of larceny or embezzlement by any of its employees set forth in the schedule attached thereto, of which the employee named in the complaint was one.

On December 23, 1927, the employee was called before a meeting of the officers of plaintiff, where he confessed to a shortage of four small items and made a general statement that, to the best of his knowledge he had appropriated to his own use the total sum of $6,240. Appellant complains that the trial court erred in admitting the statements of the employee made by him after his employment ceased. There is no testimony to show the discharge of the employee prior to the conversation testified to.

Section 1850 and subdivision 7 of section 1870 of the Code of Civil Procedure set out the law governing the admission of such testimony between the parties to the suit, while section 1851 of the Code of Civil Procedure lays down the rule as to the statements of third persons. The testimony offered was the statement made by the defaulting employee at the time he was first accused by plaintiff of his embezzlement. His appropriation of plaintiff’s funds was the foundation for this suit and his statement in relation thereto comes within the rule announced.

In the case of

Butte County

Morgan,

76 Cal. 1 [18 Pac. 115, 117], wherein a suit was instituted against Morgan, who held both offices of county treasurer and tax collector and his bondsman for misappropriation of county funds, it was held that there was no error in the admission of a receipt to him by the auditor. This receipt contained on admission against interest - by Morgan and was held admissible against him and his bondsman. The court said:

“He accepted without any question, the certificate of the auditor, which contained an express statement that he then

[543]

Piggly Wiggly Yuma Co. v. New York Indemnity Co.

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ALLEN, J.,

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