Opinion
June, 1905.
Leonidas Dennis, for appellant.
Ralph Nathan, for respondent.
The plaintiff, a corporation, on June 3, 1904, had itself insured as an employer against larceny or embezzlement by an employee, by the defendant, also a corporation, which issued its indemnity bond expressing, among others, as terms of the contract: that it, the insurer, should be notified in writing immediately after the occurrence of an act indemnified against "shall come to the knowledge of the employer;" that the insurer at its election might cancel the bond at any time on giving a month's notice, with a refund, pro rata of the premium paid; and that should the employee be guilty of an offense covered by the bond the employer should, on request, lay information of the facts before the proper authorities and aid in all ways, not pecuniary, in bringing the employee promptly to justice.
The employee kept the petty-cash book and received the petty-cash, the entries of which were checked up every week by one D., the employer company's secretary, superintendent, bookkeeper and acting cashier, as also one of its directors. D. on Saturday, November nineteenth, balanced the account and found the employee should have $308.91 but on examining the cash found only $168.91, thus exhibiting embezzlement of $140 by the employee to whom he said it was his duty to report the matter to the president; but this the employee begged off saying that he had taken the money and with it paid life insurance premiums and that he would make the money good. He did pay back $25. D. did nothing until on December seventh receiving a telegram that the employee could not be back that afternoon and discovering that $15 more was missing, he informed the plaintiff's president, who the same day notified the defendant in writing of the taking by the employee of $130, the sum for which this action was brought and a judgment had with costs.
The defendant-appellant objects to the judgment and asks that it be reversed because of failure of the plaintiff to notify the defendant of the loss immediately after its occurrence had come to its knowledge, i.e. November nineteenth, and so to perform a condition precedent to recovery. That objection is good and sufficient. The respondent, however, says the knowledge of the secretary is not the knowledge of the corporation. What is or should be knowledge of a corporation has not been exactly determined by the courts which differentiate the knowledge learned by a director when not in function from that acquired by him when acting as such (Atlantic State Bank v. Savery, 82 N.Y. 307) and recognize as corporate information the possible observation of a piece of ice upon the sidewalk by a patrolman (always on duty). Leaving aside whether the discovery of D. a director was that of the company, the knowledge of D. the secretary was the knowledge of an officer usually competent to receive notices affecting the corporation (Eggleston v. Columbia Turnpike R. Co., 82 N.Y. 282) and the information of D. the superintendent, bookkeeper and acting cashier was the knowledge of an agent intrusted with the management of its business and in transactions conducted within the scope of his authority. Cragie v. Hadley, 99 N.Y. 134. It was not necessary for the defendant to show that earlier notice might have helped toward the recovery of some of the loss, or affected its election as to cancelling the bond or aided in bringing the offending employee to justice. The judgment should be reversed.
SCOTT and DUGRO, JJ., concur.
Judgment reversed and new trial ordered, with costs to appellant to abide event.