
    J. W. Matthews & Company, Respondent, v. The Employers’ Liability Assurance Corporation, Limited, Appellant.
    Second Department,
    June 5, 1908.
    Insurance—indemnity against larceny of agent — crime — retention of moneys by agent —conflict of laws — place of contract.
    A commercial salesman who, on the termination of his employment, deducts from moneys collected for his principal the amount of unfounded claims for arrears in salary and expenses is guilty of larceny. Such moneys are not appropriated under a claim of title but under a claim of indebtedness, and such reten- • tion is not excused by section 548 of-the Penal Code.
    Hence, one who has insured the principal against the fraud ¿r dishonesty of the agent amounting to “ embezzlement or larceny ” is liable on the policy.
    Where such policy is issued in this State to a resident thereof, the question as to whether the act of the agent was larceny must be determined under the laws of this State, although the act was done in another State.
    Appeal by the defendant,- The Employers’ Liability Assurance Corporation, Limited, from á judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Orange on the 1st day of June, 1907, upon the report of a referee.
    
      ' " Action on a fidelity policy of insurance issued in this state to the plaintiff a resident’ thereof. It - was issued on the employment of one Connolly as a commercial salesman by the plaintiff, and was an agreement to indemnify the plaintiff for any pecuniary loss the plaintiff should sustain by any “ fraud or dishonesty ” of the said Connolly in his employment which should amount “.to embezzlement, or, larceny ”. His employment required him to make collections on Ms sales and remit the same to the plaintiff.
    The employment was terminated in July, 1903. . In June the employe had made collections in Connecticut for goods sold :by him in that state amounting to $960.31. In terminating his employment he deducted therefrom $464.33, which he claimed was for arrears of his salary and expenses, and $38.12 for another item, and sent his check to the plaintiff for the balance, $457.86, with a statement showing how it was arrived at, as stated above. This action was brought to recover the sum of $502.45 thus retained, and the complaint alleges a larceny of it.
    .The referee before whom the pase was tried found that the plaintiff did not owe the said employe the' amount he so retained, but only $95.05, and thathis claim that it was owing to him was not made in good faith, but with intent to avoid payment to the plaintiff of certain sums he owed it.
    
      John A. Dutton, for the appellant.
    
      Henry Kohl [Benjamin McClung with him on the brief], for the respondent.
   Gaynor, J.:

The findings of fact sufficed to support the legal conclusion of larceny under the law of this state. Section 528 of our Penal Code makes it larceny for an agent or servant to appropriate to his own use any money or property which he has in his possession as such agent . or servant, “ with the intent to deprive or defraud the true owner of his property or of the use and benefit thereof ”. Section 548 provides that it is a sufficient defence that the “ property ” was “ appropriated openly and avowedly under a claim of title preferred in good faith, even though such claim is untenable ”. But the referee-found on sufficient evidence that the appropriation in this case was in bad faith. Moreover, such appropriation did not come under this latter provision. The money was not appropriated under a claim of title, but under a claim of indebtedness by the plaintiff to the agent; and it is provided by the last sentence of this same section, that the said section “shall not excuse the retention.of the property of another to offset or pay demands held against him”.

The claim that the question of larceny should be determined under the laws of Connecticut, where the money was collected and misappropriated, is not tenable, the contract of insurance having been made and delivered in this state to the plaintiff, a resident thereof. The contract was not a roving one but intended the laws of this state (Grand v. Livingston, 4 App. Div. 589; 158 N. Y. 688; Fidelity & Casualty Co. v. Wells, 49 App. Div. 171; Stumpf v. Hallahan, 101 id. 383 ; Monroe v. Douglass, 5 N. Y. 447; Union Nat. Bank v. Chapman, 169 id. 538).

The plaintiff complied with the condition precedent of furnishing particulars and proofs of loss.

The judgment should be affirmed.

Woodward, Hooker and Miller, JJ., concurred; Rich, J., not voting.

Judgment affirmed, with costs. , .  