'.,48
QDlllRAL REPORTER,
vol. 63.
his experience' of"rthe .dQJlgets oI:dinarily incident to his calling. llutwe do not see that the doctrine in question has any special. applica'tion to the case at The plaintiff was an experienced brakeman, who had been in service, either as brakeman or conductor, for fully 17 years. It was shown that at least 10 doubledeadwood cars daily passed through the yards at the eastern terminus. of the defendant's railroad at St. Paul. It was further shown; by the. plaintiff's own admission, that he was familiar with one of the defendant company's rules, which contained the following warning to all of its employes: . "Groo.tcare must be exercised by all persons in coupling cars. Inasmuch as the coupling apparatus of cars or engines cannot be uniform in style, size or strength, and is liable to .00 .broken, and as, from various causes, it is dangerous to expose between the same the hands, arms, or persons of engaged in coupling, allemployiis are enjoined, before coupling cars or engines, to examine so as to know the kind and condition of the drawheads, drawbars, links, andCQupling and they are prohibited from placing 'in the train any car with a defe·ctive coupling until they have first its defective condition to the yardmaster or conductor."
Moreover, the trial court did not submit an issue to the jury, nor was it asked to do so, touching the question whether the plaintiff was entitled to special notice of the use by the company of double-deadwood cars by reason of his lack of experience in handling.such cars. On the contrary, and as heretofore stated, the case was subfuittedto the jury under instructions which, in our judgmerit,gave thefu full liberty to find that the company was at fault in receiving and using cars with double buffers, and upon this erroneous ground a verdict against the company in the sum of $10;000 evidently rests. The judgment of the circuit court must therefore be reversed, and the cause remanded, with directions to award·a new trial. It is so ordered.
SUPREME COUNCIL CATHOLIC KNIGHTS OF AMERICA v. FIDELITY; & CASUALTY CO. OF NEW YORK.l
(Circuit Court of' A.Pl?eals, Sixth Circult. May 8, 1894.) No. 162. 1. BOND FOB FIDELITY OF EMPLOYE-EXTENT OF REOEIPTS. OF
On the reappointment of the treasurer of a beneficial association ,for a new term, a surety company gave to the association its bond to make good "such yecuniary IQss, if any, as may be. sustained by the employer by reason of fraud or dishonesty of the employed. in connection with the duties referred to, a:Qlountlng to emoozzlement or larceny, which Waf committed and discovered' during the continuance of said term, or any renewal thereHeld, that entrle$, receipts, and reports made by him dUring the life .ot tM bond, in the ordiIl&ry. course of his as treasurer, charging himselt with certain items, were not conclusive against the surety as to the 'time when such items were received, there being no circumstances creating an estoppel in pals. . .1
Rehearing denied.
SUPREME COUNCIL CATHOLIC K. OF A. t1. FIDELITY &; CASUALTY CO.
49
2. SAME-USE OF FUNDS TO MAKE GOOD EMBEZZLEMENTS OF FORMER TERM.
Obligations of the association, which should have been paid by the treasurer during his former term, were carried forward by him into his new term, and paid out of current receipts. Held that, as such obligations were not discharged when assessments were made sufficient to meet them, but continued obligations until paid, their payment out of funds of the association did not amount to embezzlement or larceny committed during the new term, and the surety was not liable for the misappropriation. Such bond recited that the association had delivered to the company certain statements relative to the duties and accounts of the treasurer, which it was agreed should form the basis of the contract 'expressed in the bond. Held; that, if such statements involved no misrepresentation or concealment, the contract could not be affected by loose parol statements, or concealment of facts about which no inquiry was made, or conduct on which no reliance was placed; nor by conversations, as to laws of the association, with its vice president, at the time of application for the bond, it not appearing that he had authority to make any representations on the subject; nor by the fact that at the time of such application the treasurer was in default to the association, there being no representation to the contrm'y in the statements delivered, and nothing to show that at that time the fact was known to any officer of the association. Such bond recited that it was made July 1, 1891, and stated that it was for a term ending July 1, 1892, and an indorsement on its back stated those days to be the dates of the bond and of its expiration; but the bond was dated July 10, 1891. The premium received covered one year. Held, that the bond was properly construed as in effect from July 1, 1891, without regard to evidence as to when it was accepted. a plea seeking to avoid the bond, as procured by misrepresentations as to the previous state of his accounts by the employer, averred that the was then a defaulter, and that 'he employer knew it, or could have known it by the exercise of diligence. Held, that this was bad, as a double plea. In an action on a bond to make good loss by embezzlement of an em-
S. SAME-MISREPRESENTATION AND CONCEALMENT.
4.
SAME-CONSTRUCTION-Tum OF TAKING EFFECT.
&.
PLEADING-DuPI,ICITy-FRAUD IN PIWCURING BOND.
6.
ApPEAL-ASSIGNMENTS OF ERROR-STRIKING OUT PLEAS.
An assignment that the court erred in striking out pleas to plaintiff's declaration is too general, under a rule of court requiring each error relied upon to be set out separately. Errors assigned in admission or rejection of evidence cannot be considered where a rule of court requiring such assignments of error to quote the full substance of the evidence admitted or rejected is not complied with. An objection to a bond as evidence, because it varies from the one declared on, whoce no exception was taken, and the variance-merely a clerical error in the declaration, in stating the date of termination of the bond-is not pointed out, will not be considered on appeal. V ARrANCE.
'1.
SAME-RULINGS ON EVIDENCE.
8.
SA;ME-OBJECTION8 NOT RAISED BELOW -
9.
SAME-EVIDENCE SUBJECT TO EXCEPTION.
Where a party consents to treat a document as read in evidence subject to exception, but no ground of objection is stated, and no exception is taken afterwards, no objection thereto can be presented on appeal. SAME-HARMLESS ERROR-c-iSTHlKJ::<rG OUT PLEAS.
10.
Striking out pleas to the declaration is not prejudicial where any evidence competent under them would have been equally competent under other pleas. mxclusion of evidence tending 1xl show frand in procuring the bond su.ed on is not prejudicial where neither the pleas stricken out nor those on which the case was tried were sufficient to present any issue ot fraud gO'ing to the validity of the contract. v.63F.no.1-4 SAME-REJECTION OF· EVIDENCE.
11.
".50 .,., ("
J'EDERAL. REPORTER,
vol. 63. . .
12.TItIAL-INBTRUCTlONB-SuFFJCrENCY,OP EVIllENCE.
";.fThere is no error in withdrawing,from the consideration of the jury a
parueular defense, where there Is nO competent evidence in' support of it, oD::whlch a verdict could be based.
Circuit Court of the United States for the Eastern the Supreme Council Oatholic Knights of :against the Fidelity & Casualty Company of New York At the tvial the jury found for plaintiff. Judgment for ente,red on the verdict. :Both parties brought error. Wheeler and Thomas McDermott, for plliintiff. Creed. F., Bates, Charles C. Badal, Edwin R. Thurman, and J. Washingtqu Moo-re, 'for defendant . Before '1':A,FT and LURTON, Circll-it Judges, and BARR, District Judge. LURTON, Circuit'Judge. The appellant here and plalntiff,below ,is theSupl'eme Oouncil Catholic Knights of America; a corporation under'the'1aws of Kentucky. In general terms'it maybe described :as a fratett.al and of the memberS of the Oatholic ChurclJ.., It!!! ,cl;l,idpurpose seems to havel;>een the establishment .and maintenance of a life insurance feature, by; means of,which a sum not exceeding $5,000 was to be paid to the family of each member out of fup.d,s,raised,l;>Y death an.dpaid into the com· Plon treas1.p:y" andtben, under tbe .laws of the order, paid to the The defendant corporation, the Fidelity & (Jasualtyr'OOmpanyof New York,is a corporation of the state of New York, and is engaged in the business of guarantying the fidelity officers, , This was an action on a bond for $50,000, executed by the de· fendant company to the plaintiff corporation; insuring the fidelity and honesty of ¥ichael J. O'Brien as supreme treasurer of the Catholic Knights of America. So much of said l:)()D'd as in the questions presented by the assignment of errors is as follows: "This, ,!>ond; )nade the first day of Ju1r, in the year of our Lord one thou· "Sand eight liUndtedandninety·one, between the Fidellty and Casualty Com· J pany of New hereinafter called 'the company,' of the first part, and Michael J.O'Brlenl of Chattanooga, Telln., hereinafter. called the 'employed,' of the second part, and Supreme Council Catholic Knights of America, hereinafter called 'the employer,' of the third. part. Whereas, the employed has been appol1lted s1;Ipreme treasurer at Chattanooga, Tenn., in the service of the employeriia.nd has applled to the company for the grant by them of this bond, andwbereas, the. employed has heretofore delivered to the company certain statements and a declaration relative to the duties and accounts of theemployed,lI.Ild:other matters, it ,is hereby understood and agreed that those statements' and sueh declaration, and any subsequent statements or declaration hereinafter required by or lodged with the company, shall constitute an essential part and form the basis of the contract hereinafter ex· pressed: Now,. 'in. consideration of the sum of three ,hundred md seventy. five dollars,as a premium for the term ending on the first day of July, eight-een hundred lll1dlllnety-two, at 12 o'clock noon, it is hereby declared and .agreed that during such term, or any subsequent renewal of such term, and
SUPREME COUNCIL CATHOLIC K.OF A. V. FIDELITY. & CASUALTY CO.
51
subject to the conditions and provisions herein contained. the company at the expiration of three months next after proof satisfactory to its officers of a loss as hereinafter mentioned, make good and reimburse to the em· ployer, to the extent of the sum of fifty thousand dollars, and no further, such pecuniary loss, if any, as may be sustained by the employer by reason of fraud or dishonesty of the employed in connection with the duties referred to, amounting to embezzlement or larceny, which was committed and discovered during the continuance of said term or any renewal thereof, and within three months from the death, dismissal, or retirement of the em· ployed: provided, that on the discovery of any such fraud or dishonesty as aforesaid the employer shall immediately give notice thereof to the company, and that full particulars of any claim made under this bond shall be given in writing. addressed to the company's secretary, at its office in the city of New York, within three months after such discovery as aforesaid, and within three months after the expiration of this bond, and the company shall be entitled to call for, at the employer'S expense, such reasonable particulars and proofs of the correctness of such claim, and of the correctness of the statements made at the time of effecting this bond, or made at any time of the payment of any renewal premium, as may be required by the officers of the company, and to have the same particulars, or any of them, verified by statutory declaration; and any claim made under this bond, or any renewal thereof, shall embrace and, ,cover only acts and defaults committed during its currency, and within twelve months next before the date Of the discovery of the act or default upon which such claim is based, and upon the making of any claim this bond shall wholly cease and determine, and shall be surrendered to the company on the payment of such claim. And this bond is entered into on the condition that the business of the employer shall be continued to be and the duties and remuneration of the employed shall remain in accordance with the statement.<> hereinbefore referred to; and'if, during the continuance of this bond, any circumstance shall occur or, change be made which shall have the effect of making the actual facts differ from such statements, or any of them, without notice thereof being given tp the company.at its office in New York, and the consent and approval in writing of the company being' obtained, or if any wlllful suppression or misstatement be made in any claim umier this bond, or any fact affecting the risk of the company at anytime, or if the employer shall fail to notify the company of the occurrence of any act of dishonesty on the part of the employed as soon as it shall have come to the knowledge of the employer, or shall continue to intrust the employed with valuable property after such discovery, tbis bond shall be void from the beginning."
O'Brien succeeded himself as treasurer, having held the same office for· two preceding terms of two years e.ach. The defendant company was surety only from July 1, 1891, the date when his third and last term began. O'Brien acted under defendant's bond only from July 1, 1891, to September 10, 1891, when he abandoned his trust and fied the country. There was a jury and verdict against the defendant, as surety, for $15,722. From the judgment on this verdict both the plaintiff and defendant have sued out writs of error. The principal question arising upon the plaintiff's assignment of error is as to the liability of the surety for certain items of receipt, aggregating $21,000, and with which O'Brien charged himself as of various dates between July 1 and 10, 1891. The contention of the defendant was and is that the charges so made by O'Brien against himself were misdated; that the moneys so charged were in fact received and paid out before Jllly 1st, and were not, therefore, embezzled by O'Brien during the currency of its bond. The contentionof'the plaintiff was and is that the charges so made by O'Brien against himself were made during the life of the. bond, and in the
52
l!'lllDERAL REPORTER,
vol. 68.
course of his duty as treasurer, and are therefore conclusive iIpq1r:him and upon his surety. Evidence tending tosl\ow that these items had been received duro ing the latter part of June, and paid out before July 1st, was admit· te,d over objection. There was also evidence tending to show that O'Brien had a habit of datiI\g his' entries, letters of advice, and receiptsabout 10 days after' the date of actual receipt. The court, in substance, instructed the jury that while admissions, entries; receipts, reports made to other officials of the order during the life of the bond, and in the usual and ordinary course of his duty as treasurer, would be evidence affecting O'Brien's surety, yet such admissions or reports would not be conclusive, and might be contradicted. and explained, and that it was for tbe jury to say, upon the evidence subm.itted to them, .whether the items in controversy had been received before or after the execution of the bond in suit, and before or after the beginning of his third term; that, on the evidence, it was ,for them to say whether the sums so received were· paid out before. the currency of defendant's bond. The court also charged that the defendant surety would not be liable for any moneys received by O'Brien before July 1st, which were not in his hands wheIl. the defendant became bo.und as his surety; that for any defalcation' before July 1, 1891, .the defendant surety could not be made liable under the bond exhibited. There has been a wide difference of opinion entertained by American·· courts as to the conclusiveness of official reports, or entries made by public o:OO.Cials in the ordinary course of official duty. There is a respectableJlne of authority, beginning with the case of Bakerv. Preston, 1 Gilmer, 235, holding that such entries and reports are conclusive both upon the official making them and the sureties upon his official bond. That case involved the liability of the sureties upon the bond of a state treasurer who at the beginning of a second term had on hand, according to his own books, a large bal· ance brought forward from a preceding term. The sureties were held concluded by the book balance thus brought forward, and not suffered tosbow that in fact the balance on hand was much less, by reason of a defalcation committed during the former term, and not appearing upon the b'ooks.. The decision was by a divided court. Judge White dissented in a very able opinion, based upon the total want of authority to slipport the conclusion of the court. The dedsion has been much criticised in sUbsequent opinions of the Virginia supreme court. Munford v. Overseers, 2 Rand. 314; Craddock v. Turner's Adm'r, 6 Leigh, 116. It has been followed in State v. Grammer; 29' ,Ind. 530; Morley v. TOwn of Metamora, 78 Ill. 394; City of Chicago v. Gage, 95 Ill. 593; Boone Co. v. Jones, 54 Iowa, 699, 2 N.'W.987, and 7 N. W. 155,..:.-and perhaps others. The doc" trine has 'beeri repUdiated, and Fluch reports and entries held to be only prima facie evidence, and operitocontradiction, by a decided weight u; S.v. Eckford: 1 How. 250; U. S. v. Boyd, 15 Pet. 187, U. S. v. Boyd, 5 How. 29, Arkansas v. Newton, 33 Ark. Saxton, 66N. Y. 55; Mann v. Yazoo.'City, 31 Miss. 574; Hateh v. Attleborough,,91 Mass. 537; Nolley v; Calla·
SUPREME COUNCIL CATHOLIC K. OF A.
v.
FIDELITY & CASUALTY CO.
53
way Co., 11 Mo. 447; Nevada v. Rhoades, 6 Nev. 352;'rownsend v. Everett, 4 Ala. 607; Vivian v. Otis, 24 Wis. 518. Undoubtedly, there may occur cases in which the official should be estopped by his entries and reports, in consequence of special circumstances appearing constituting an estoppel in pais. In such cases the surety would be bound by the evidence which concluded his principal. . But such estoppel could only arise under bonds conditioned for the faithful of the duties of the office. Some of the cases cited above as following Baker v. Preston were in part based upon facts constituting estoppel in pais. So, under bonds obligating the surety for the faithful discharge of official duty by his principal, the evidence offered to show fabricated entries or false reports may show such official dereliction or fraud as in itself would constitute a breach of the obligation of the bond. Such was the case of U. S. v. Girault, 11 How. 22,-a case which counsel for plaintiff have urged was in conflict with U. S. v. Boyd, 5 How. 29. The opinion in each case was by Mr. Justice Nelson, and, when rightly understood, is in harmony and in accord with the earlier case of U. S. v. Eckford, 1 How. 250. In the case last cited the suit was upon the bond of a collector who had succeeded himself, and stood charged, when the bond in suit was given, with large balances, which were carried forward in subsequent reports as cash on hand. As to the effect of such charges, the court said: "The amount charged to the collector at the commencement of the term Is only prima facie evidence against the sureties. If they can show by ciror otherwise that the balance charged, in whole or in part, has been misapplied by the collector prior to the new appointment, they are not liable for the sum so misapplied."
In the Boyd Gase, which was an action on the bond of a receiver .of public moneys arising from sale of the public lands, it appeared that during the term of the bond he reported in his official reports the receipt of large sums as from the sale of public lands. Upon default his sureties were sued for the sums so reported. Their defense was that Boyd had never received the money so reported; that the charges so made were for lands which Boyd had entered in his own name, or in the name of others for his benefit, after his term of office began, but before the execution of his bond; that the lands so sold had never been paid for, Boyd simply charging- himself as receiver in his accounts, as if the money had been paid, and carrying forward these charges in his subsequent reports. It was contended in that case, as in this, that any evidence contradicting the entries against himself and his official reports should be excluded as incompetent. Upon that point the court said: "It haS been contended that the returns of the receiver to the treasury department, after the execution of the bond, which admit the money to be then in his hands to the amount claimed, should be conclusive upon the sureties. We do not think so. The accounts rendered to the department, of money received, properly authenticated, are evidence, In the first instance, of the Indebtedness of the officer against the sureties, but subject to explanation and ·contradictlon. They are responsible for all the public moneys which were in his hands. at the date of the bond, or that may have come into his hands afterwards,and not'properly accounted for, but not for moneys which the officer
"FEDERAL
68. "
In r1lhe government'.''1'he'suretles cannotbe,oonduded by a fabMCB;tAA of their principal with his may also Inquire ilitoW'ereaUty and truth of rl-ltfstingbetWeen them. Th&princtple iwbeen asserted by this oo\lrt In ilaVeral C8$9S." ,
It witl be, observed thatiri the Boyd Case by which without the actualplljrilieJl,t of the entry prohibited by law-pad been committed before '. obligation of his sureties began.. 'Tb,ey, were therefore a Vioration of ,law committed before his bond was given:",'.,'.",· In GimnWs Case, was 'also a receiver,the facts were the same as in the Boyd Case, with this important distinction: Girault's. fraud in entering lands without actual payment was committed during the currency of his bond. The bond was conditioned that he, discharie. the duties of his .office. While the suretieidvere not estopped to show that in fact he had received no money, and that his reports, to the contrary were false and untrue, yet the PtoQ1' which', establi'shed this fact established, a fraud for which; his liable.' .,' In Girault's Case the question arose upon the:sufflciencyot a plea" which setout .the, manner in ,which Girault'haddefrauded the government, and the circumstances under which he bRdt charged himselt''tor money which in fact he,had never received. The plea was held bad because, as the cotlrt said: .lThe conditlbn oftbe bond IS that Girault shall faJthtWIYeXecute and discharge tM duties Of his ofIice as, a ,receiver of the pubUc mOneys, The defend'antshaivebound themselves fO,rthe fulfillment of those duties,andare, , of, course, IfOt1 the very, traudcommlt.ted by that ofIi:cer, which 111. sought to be set up here in bar of the action on the bond:'
Proceeding, the court distingUishes the case from Boyd'shy saying: ':' , ' '!Thel'e tHe receipts [whlcb had boon returned to the treasury department", upon which:'the'bldebtedness was founded, 'and which had been given on enotthepubUc in fraud of the government, were lll1, given before the execution of the otIl.cial bond upon which the, sUlt,wll,!l brou,ght. Their sureties', were the['et0J,'e not, resllonsible for the· fraud, iuld It was those tranSllct!ons On the part of the receIve[' which had transpired anterior to the time when th,e sureties became answerable tor the 'fai,thful execution of his {]utles. ,In respect to which It was held that they could not be eBtoppedby bis returns to the government" 11 How. 30.
The bond now in suit is not the bond of a sworn public official. In a more important pal'ticular still is it distinguishable from the bdn:ds involved in all the caseseited abOve. It is this: All those' bonds boUtulthe, sureties for the 'faithful discharge of the duties of the office occupied by their principal. The bond in suit isremarl,ra}:}lein the only obligatioJl'ot the 81lrety is that it "such pecuniary loss, ffany, may by r,eason, of fraud ()r dishonesty Of" be the, with; the duties referred to,amounting, ,larceny, WhICh maybe committed and dis over.edduMIlgthecontinuance of 'said termor any r¢newal thereof, ;Within 'three mp,J:l;'t;hs from the death; Qr retirement. ,. . ;' ",
'.",
,','
SUPREME COUNCIL CATHOLIC K. OF A. V. FIDELITY & CASUALTY CO.
55
of the No' circumstance tending to make out any estoppel in pais appears in the case. The general secretary of the order, who audited claims and drew drafts on the treasurer for their payment, was not dependent alone upon the reports of the treasurer as to either amount or date of his receipts. Under the laws of the association the subordinate lodges, called "branches," sent to the secretary duplicates of all letters of remittance to the treasurer on printed forms required to be used. From these duplicate notices the treasurer was enabled to learn when and what remittances had been received by O'Brien. The insistence of the plaintiff is barren of all circumstances which would tend to move the oonscience of a court, and is, in substance, this: "It may be true that the $21,000 with which I seek to charge you, in addition to the sum adjudged against you, did not come to O'Brien's hands during the term covered by your bond, and that he in fact embezzled that sum before you undertook to guaranty his honesty, yet he has made entries on IIl,V books, and executed receipts and written lettcl."S of advice, while you were on his bond, wllereb3' he admitted this snm did come to his hands during the currency of the bond, and you should not be now allowed to show that he did not receive and embezzle that money at the dates he has admitted he received it." .
There is neither sound morals nor natural justice in this effort to shut out the truth and fix a liability upon the defendant for a defalcation occurring before it became obligated as a surety. Neither is there any principle of public policy or of settled law which would close the door to the truth under a bond such as that here involved. We pass to another question: During O'Brien's preceding term he failed to pay certain drafts drawn during that term. These drafts were carried forward into the new term, and then paid out Qf current receipts. The contention of plaintiff is that these drafts should have been paid out of balances which should have been in his hands at the end of the preceding term; that, if the funds which ought to have been in his hands for that purpose had been theretofore embezzled, he could not make good a former defalcation out of the funds of his new term; and that the payment of these obligations out of the funds which came to his hands during the new term was in itself such a misappropriation as fixes the liability of his surety for the new term. The business of this association was not conducted in such a way that the obligation of the order was discharged when an assessment was made sufficient to meet it. Assessments were made, from time to time, of amounts deemed ilufllcient to meet death losses accrued, pay expenses, and provide a sinking fund. The liability of the order was not extinguished by the misappropriation of the fund thus assessed to meet accrued and fixed obligations. The funds coming to O'Brien's hands were not so earmarked as to amount to an appropriation of a particular dollar to the payment of a particular claim. If assessments were made sufficient to meet certain death claims, and the fund came to the hands of O'Brien, these claims were not thereby extinguished. If O'Brien embezzled the fund so appropriated, the association was not thereby reUeved of liability. The claims were ob·
FEDERAL REPORTER,
vol. 63;'
ligations of the; order, and continued to be 'obligations until paid. When these obligations were paid out of subsequent funds of the order, it was' only a case where the debt of the association was paid out of its own funds. No species of reasoning can make the application of the plaintiff's own money to the payment of its own obligations either embezzlement or larceny. The fund which had been provided for the payment of these claims had been already embezzled. The loss thus sustained should be borne by the bond in force when the default occurred. For that loss the new bond is not responsible. It is assigned as error that the circuit judge, in his charge, referred to certain deposit tickets as having been "put in bank by O'Brien." The error assigned is that there was no evidence "that he did see or ever saw these slips, or that they are in his hand· writing, or that he ever authorized it to be done." Neither plaintiff's assignment nor brief points out the evidence relating to these slips. reply brief of the defendant is equally barren in citation of the record on this point. The result is that a needless labor has been imposed upon the court, only to find that the assignment is bad. .The testimony of the accountant, Goodwin, and of the bank cashier, Davies, makes it circumstantially clear that the slips in question were the usual memoranda made by depositors, accompanyingadeposit. They were produced as deposit slips, which came to the bank in the usual way, with evidence that they corresponded with O'Brien's account on the books of the bank. No objection was made below that they were not slips made by O'Brien, or authorized by hini, and the court was entirely justified in referring to them as it did. We find no errors of which the plaintiff can complain. The defendant's first assignment of error is too general, and violates the eleventh rule, which requires that each error intended to be asserted and relied upon shall be set out separately and particularly. The assignment is in these words: "The court erred in striking out the pleas to plaintitr's declaration. They were competent and proper, and available under the statute as notices of de.fense, at least."
Any evidenCe which would have been competent under the first and fifth pleas atricken out would have been equally competent under the second and third pleas, and in point of fact all the evi· dence offered on the part of the defendant which was competent under either of these pleas was admitted under defendant's second and third pleas. By the.fourth, sixth, and seventh pleas,matters were presented presumably for the purpose of avoiding the bond, as having been procured through fraud and misrepresentation. The sixth plea was clearly bad, in that it did not connect the defendant by any averment with the alleged fraud or concealment or misrepresenta· tion.The seventh plea, in addition to other objections, was bad as a double plea, presenting two defenses: First, that plaintiff knew O'Brien to be a defaulter; second, that if it did not so know, it <mght to have known. The fourth and seventh pleas, stricken . out, were as follows:
57
"(4) The defendant for further plea says that, at and before the execution and acceptance of the bond sued on, said O'Brien was a defaulter to plaintiff, which fact was known to them and concealed from the defendant, wherefore said bond is void, and of this it puts itself upon the country." "(7) For further plea, defendant says that plaintiff represented to defendant that it had examined O'Brien's accounts as supreme treasurer at the time the bond sued on was executed, and found them correct, when in truth he. was a defaulter then-, and plaintiff knew it, or could have done so by the exercise of diligence, wherefore the bond is void, and of this it puts itself upon the country."
The bond refers to certain "statements and declarations" relative to the "duties and accounts" of O'Brien, which it recites had been "heretofore delivered to the company," and constitutes and "forms the basis of the contract hereinafter expressed." This statement so referred to and made a part of the contract was in writing. It consisted of a series of questions and answers propounded to Mr. Coleman, as president of the plaintiff association, and answered by him. Thus the parties put in writing the statements and declarations of the plaintiff, which were to be treated as the basis of the contract. Neither of the pleas above set out undertakes to make any issue upon the representations so elicited, and made a part of the agreement. If that statement involved no misrepresentation or fraudulent concealment, then the contract would not be affected by loose parol statements, or by concealment of facts about which no inquiry was made, or by conduct upon which no reliance was placed. Neither plea presented in proper form any material defense, and there was no error in striking them out. The second assignment is bad. When the bond in suit was offered to be read, the following colloquy occurred: "Mr. Wheeler: I desire to read the bond. Mr. Bates: We object until it is proven, and because the bond offered varies from one declared on. Court: Any plea of non est factum? Mr. Wheeler: No, sir. Court: Read it."
No exception was taken, and the variance was not pointed out. The assignment now undertakes to point out that which should have been definitely stated when the objection was made. The alleged variance is as to the termination of the bond, the declaration stating July 1, 1893; and the bond showing that it ran until July 1,1892; a clerical error in drafting a declaration, which could have been easily corrected if counsel had conformed to the wellunderstood rule, which requires that when an objection is made to evidence the ground of the objection must be specifically stated. This ruling carries with it the twentieth assignment of error. Mitchell v. Marker (decided May 8, 1894) 62 Fed. 139. The third assignment is bad for the same reason. When the plaintiff offered its charter in evidence the counsel for defendant said, "I suppose we might treat it as read, subject to exception." No exception was afterwards made, and it must be regarded as read by consent. It is too late to present an objection now, or assign a ground for objection not pointed out in the first instance. Defendant's fifth assignment of error is in these words: "The court erred in excluding the evidence offered, by defendant that the
58
, FEDERAL' :REPORTER,
vok .83. ') ,
by plaintiff, in Cincincourt construed this bond as 1st day ot Jqly, The rE;!cital hi the bond is that;lit,was "made July 1st, 1891." iThe back of the bond is t'Amountinsured,flfty thousand dollars; an· $375.00;, datebf bond, July 1;1891; expires July 1, 1892.' . '"The bond is dated July 10, 18ot. The clear presumption is that the defendant company undertook to indemnify the plaintiff ag3cinst loss from embezzlement from the time the bond purports to have been made, July 1, 1891, for the term of (jne yMt'. It rec'eived.a premium from the plaintiff covering one year expiring July 1, 1892. With reference to bonds of this kind, executed upon a consideration', and by a corpdi'l'dion organized to make 'such bonds fdr profit, the rule of COJistruction applied to ordinary sureties is not The bond is in the terms prescribed by the surety, and any'doubtful language should be construed m<>st strongly against thesuretY,and'in favor of theindemnity which the assured' had rea· stmaolegI'<>und' to expect. The rule applicable to contracts of fire'and" life in'snrance' is the/rule, by analogy" most applicable t(), a contl'Mt likl:! that in this case. We think the learned circuit judge 'was not in error in holding this bond as relating to the date when it purported to have been 'made, July 1, 1891, and that evidence as to' when it was accepted was immaterial. The twenty-second assignment of error is as to the instruction of the court as to when this bond went into effect, and is likewise overruled. The twelfth, and thirteenth assignments of error may be consid· ered together. They are as follows:
of July,
presented and
"(12) The court erred in refusiIig to allow Mr. Hall, superintendent of de· fendant company, to detail the conversation had with 'r. J. Larkin, vice president of the defendant at the time of making application for the bond in question, as to the laws of the order, recently amended, mentioned by President Coleman in his letter"and to which defendant's attention was called by plaintiff. (1$) The court erred in excluding from the jury the testimony of Hall, superintendent of the. company, that the company refused to execute the bond for O'Brien unless the certificate should be required from the cashier of the bank 'where the order's accounts were kept, to be furnhlhed to the supreme secretary of the order every Monday morning, showing the amount OJ;l hand at the close of business on the preceding Saturday night."
The contract in question must speak for itself. The only declarations and representations which the parties chose to make a part of or the basis of contract were the representations and declarations contained ill the written, questions propounded to Mr. Ooleman, as president of the Oatholic Knights, and his written answers thereto. Besides, it nowhere appears that Mr. Larkin, the vice president of the OatholicKnights, had any authority whatever to make anycon7 tract or make any representations with regard to the methods of business in the treasurer's office, nor in regard to the legislation of the order concerning assessments and disbursements. We think the court was not in eVrOr in ruling that conversations with Mr. Larkin were not admissible to change or modify the contract in any way.
SUPREME COUNCIL GATHOLICK.
oil' A.
tI. FIDEI,ITY & CASUALTY CO.
69
The fourteenth and fifteenth assignments of error' are dependent 'upon a like questiun. The defendant company offered to show that {)I:arien was short on the 25th of Aprill 1891, about $40,000. It also offered to show that O'Brien was short in' the funds of' the order $61,000 at the time of the application for this bond. Upon objectionthe evidence was excluded. If this condition of O'Brien's dail'S was unknown to the plaintiff order at the time this bond was applied for and accepted,' such evidence would have been wholly immaterial. The only representation made by Mr. Coleman, and referred ro in the contract as being the basis of contraet, was in answer to question 13 of the statement delivered to the defendant company. That question was this: "When were the accounts last examined, and were they in every respect correct?" To this question Mr. Coleman answered: "May, 1891, and reported correct by ·examinel's,-three supreme trustees." This evidence tended in no 'way to show that Mr. Coleman's answer was untrue. His represen'tation was that three examiners had examined O'Brien's accounts, and reported his accounts correct. Now, if such an examination was made, and such a report was made to the council of the order, Mr. Coleman's representation was in no respect untrue. The par'ticular offer covered by this exception embraces no offer to show that Mr. Coleman, or any other officer of the order, at the time this bond was applied for, knew that 1\11'. O'Brien was a defaulter. The nineteenth assignment must be overruled for the reasons above stated, as well as for the additional reason that the testimony sought to be elicited from Albright was hearsay. It was not shown that Mr. O'Brien was present, and the members of the committee making the examination, which it is alleged showed a defalcation, was the best evidence of the fact. It was incompetent for Albright to say what he heard a member of that committee say, especially in the absence of Mr. O'Brien. The three assignments last me,ntioned are likewise bad, because there was no issue presented by the pleas for the purpose of avoid· ing the contract as procured through fraud. In ruling upon the as· ;signment alleging error in striking out certain pleas, we have shown that in our judgment none of the pleas stricken out tendered any issue of fraud going to the validity of the contract. Neither of the pleas upon which the case was tried made any such issue, .and the evidence excluded, and made the subject of assignments 14, 15, and 19, was immaterial. The twenty-third assignment of error is in these words: "The court erred in charging the jury: 'But did the officers know-did -the representatives of this plaintiff know-that O'Brien was committing these defaults? And, if so, were they known during the currency of this bond. that is, during the time this bond was In force? I may say to you that I -think the proof faUs to show any SUch thing. Some complaints were made, but. upon investigation, complaints )Vere found to be without foundation. 'fhere were not a great many complaints during the term of this bond, which Is from the 1st of July to the 10th of September; and there Is no evidence, as I can conceive, indicating that these plaintiffs knew that there was any defalcation during that period,-during the currency of the bond.-so far ;as O'Brien was concemed.' Defendant's counsel insist this was the point ,proof was excluded upon; that it was for the jury to detE"rmine whether
p.
",.. tJ..tl:J e.w of, O'Brien's defaults: and that.. as presented, the charge was ,lal .. . . '.
error in No cOJPpetent evidence, upon which f.l,verdict could. have been based, was submitted to the jury, which would have justified a verdict based upon the failure of, the officers of the Knights to prompt communication to the defendant of a(lts of fraud or dishonesty in O'Brien, :discovered during the life of defendant'sb9nd. Neither was. aD;y material or competent evidence excluded, so far as is pointed out by valid ex<;eption and proper assignment of error, which should have been admitted as bearing upon such a defense. It was not improper for the court tQ withdraw that defense fr.om the consideration of the jury. The defendant's fourth, ninth, eleventh, seventeenth, and eighte.enth. l:lSsignments of error are insufficient, in that they are not ill compliance with rule 11 of this court, which requires that, "when error alleged is to the admission or rejection of evidence, the assignment of error should quote the full substance of the evidence aqmitted or rejected." r,rhe remaining assignments have. been examined and are overruled. They are either immaterial, or not well taken. To rule upon them in detail would extend this opinion to an unpardonable length, and prove of no particular interest. The judgment must be affirmed. Each party will pay one-half the costs of this court. McDONALD v. CITY OF TOLEDO.
(Circuit Court, N. D. Ohio. June 23, 1894.)
t.
MUNICIPAL CORPORATIONS-OBSTRUCTED STREETS-SNOW AND ICE.
A city situated in the latitude of northern Ohio is not bound, as a matter of law, to remove, even from its principal streets, snow which fell, during an unusual storm, to the depth of four feet: and the fact that the snow has remained a week, and has been piled .up by the street-car companies, in clearing their tracks, and become frozen and hard, is notice to the pUblic, as well as to the city authorities, of its dangerous condition, and therefore the public is bound to exercise care in driving. Chase v. City of Cleveland. 9 N. E. 225,44 Ohio St. 505, applied.
2.
BAME-PERSONAL INJURIEs-PLEADING.
In an action for injuries sustained in driving upon a street obstructed with snow and iee, plaintiff averred that the accident was caused because, in turning from one street into another, it was necessary to pass round a street car standing upon its track in the latter street, and that in so doing his horses were frightened by the sudden starting of the ear, and drew his buggy over the ice, and overturned it. Held that, in the absence of any further averment on the subject, it shoUld be assumed that the car had merely stopped to take on or discharge a passenger, and that, therefore, it was not necessary for plaintiff to drive around it
This was an action at law by McDonald against the city of Toledo to recover damages for petsonal injuries sustained in and driving upon the streets. The city demurred to the petition for want of facts sufficient to constitute a cause of action. Hurd, Brumback & Thatcher, for plaintiff. O. F. Watts, City 801., for defendant.