Haydel v. Morton

THE COURT. Appeal from a judgment in an action for malicious prosecution.

Defendant Morton was the owner of Morton hospital in San Francisco, and plaintiff was his accountant and office manager but lacked authority to draw checks on defendant’s bank account. Defendant was absent from San Francisco during the months of June and October, 1929. In June, plaintiff received from one Fernandes three checks on account of the latter’s indebtedness to the hospital, and in October another on the same account. The dates and amounts were June 3, 1929, $300; June 12, 1929, $500; June 17, 1929, $250, and October 4, 1929, $500. Each was made payable to the plaintiff and was deposited by him in his personal bank account. The plaintiff, according to his own testimony, was a skilled accountant, experienced in business and familiar with business methods. He also testified that he had no authority to deposit hospital moneys in his own account, and that he was instructed to keep a complete record of all transactions of the hospital.

In the latter connection it appears without dispute that the hospital records consisted of a duplicate receipt book and a duplicate bank deposit book, also a daily cash receipt book, permitting a permanent record to be kept of all cash received. While this system was not of the most approved kind the testimony shows without question that it was sufficient to enable an accountant to keep a complete record of all ordinary transactions. Plaintiff failed to notify the defendant that he had procured the checks or had deposited the same in the .manner stated, although the duplicate receipt book showed [699]the issuance of receipts to Fernandes for the three June checks. Upon the defendant’s return in June the plaintiff procured a check for $250.50, representing that he was entitled to reimbursement to that extent for moneys he had expended on account of the hospital. In April, 1930, an auditor, employed to audit the books of the hospital, discovered the fact that the plaintiff had received the cheeks and informed the defendant. The plaintiff then claimed that he had expended these amounts for hospital expenses, or had placed part of the proceeds in the cash drawer at the hospital, but no record was made of such deposits. He admitted that he had destroyed all his canceled checks and memoranda showing the particular dispositions which he claimed to have made of the money. His personal account with the bank, however, showed the deposits and certain withdrawals at different times. Defendant notified the company which had issued a bond guaranteeing plaintiff’s .fidelity, and also his own attorney. A representative of the company after interviewing the plaintiff reported to the defendant that he had failed to receive an explanation except as above stated, and advised that a claim be filed against the company. The attorney likewise interviewed the plaintiff, and upon receiving the same explanation stated to the defendant that in his opinion a crime had been committed. Following this the defendant delivered the canceled checks to the district attorney, who filed a complaint, which was sworn to by the defendant, based upon the check of October 4th. Plaintiff was arrested and held to answer to the superior court, and upon his trial was acquitted. Following the acquittal the district attorney advised the defendant that the verdict was improper and that complaints based upon the other checks should be filed. These were prepared by the district attorney, sworn to by the defendant and filed. The complaints were afterwards, without the knowledge or consent of the district attorney or defendant, dismissed by a judge of the municipal court. Upon the advice of the district attorney new complaints were filed, which are still pending.