
    The City Trust, Safe Deposit and Surety Company of Philadelphia, Respondent, v. The Fidelity and Casualty Company of New York, Appellant.
    
      Guaranty against loss by reason of “the personal dishonesty or culpable negligence” of an employee—reinsurance against a pm'tion of the risk —facts creating a presumption of “ culpable negligence” — a question for the jury—payment of the loss — notice thereof.
    
    In an action brought by a guaranty company, which had insured a railway company against loss by reason of “the personal dishonesty or culpable negligence ” of its collector-general, to recover from another guaranty company, which had reinsured a portion of the risk, its proportionate share of a loss paid by the first-mentioned corporation, arising out of the fact that a canvas bag of bills was taken from the possession of the collector-general, evidence was given tending to show that the collector drove up to a bank for the purpose of depositing six bags of coin and one of bills; that he unlocked the money box, which was located back of the seat, and placed the bags of coin in the front of the wagon by the dashboard; that he then locked the money box and placed the canvas bag containing the bills behind him on the lid of. the money box and handed the driver two bags of coin'; that after the driver had carried the bags of coin into the bank the collector gave him two more, having meanwhile seen that the canvas bag was safé; that after the driver had gone into the bank with the second set of bags a man approached the wagon and said something to the collector, which he was unable to understand; that the collector again looked and saw the bag of bills and then handed the driver the two remaining bags of coin; that he then turned and discovered that, the bag of bills had disappeared..
    The wagon was so constructed that a person taking the;bag must have climbed upon the wheel and into the wagon and reached by the collector over the seat to where the bag was placed and have escaped without attracting the collector’s attention. No charge was made of dishonesty on the part of the collector.
    
      Held, that the fact of the disappearance of the bag under the circumstances raised a presumption of “ culpable negligence; ”
    That the question whether the collector was guilty of culpable negligence was properly submitted to the jury, and that their verdict in favor of the plaintiff should not be disturbed;
    That it was not error for the court to charge that if, “with a lack of watchfulness, which he should have exercised,” the collector " permitted his attention to be diverted for one instant upon any pretext, he was guilty of negligence; ”
    That the fact that the guaranty company did not pay the loss to the railroad company “ at the expiration of three months next after due and satisfactory proof of the loss herein mentioned shall have been furnished,” did not affect the reinsurer’s liability;
    
      That the objection that the insurer paid the loss without notice to the reinsurer was of no force, notice of the loss having been promptly given as required by the contract of reinsurance and notice having also been given that payment had been made.
    Appeal by the defendant, The Fidelity and Casualty Company of Hew York, from a judgment of the Supreme Court in favor o£ the plaintiff, entered in the office of the clerk of the county of Hew York on the 14th day of October, 1899, upon the verdict of a jury, and also from an order entered in said clerk’s office on the 17th day of October, 1899, denying the defendant’s motion for a new trial made upon the minutes.
    The action was brought on a contract whereby the defendant agreed to reimburse the plaintiff “ to the extent of Twenty thousand dollars ($20,000), or 50-lllths of any such sum or sums as the ‘ Reinsured ’ may become liable to pay, and pay under or by virtue of v its bond of insurance issued to the Metropolitan Street Railway Company, guaranteeing and indemnifying against any loss by reason oE “the personal dishonesty or culpable negligence” of its employee George S. Wickham. The reinsurance agreement also covered expenses incurred in investigating, settling and resisting any claim made, and provided that if a claim were made “ the ‘ Rein-surer ’ shall at once be advised and consulted before the admission or payment by the ‘ Reinsured.’ ” Reference is made to the insurance bond given by the plaintiff, which, among other things, provides that the surety company “ shall not be liable * * * for any act or thing done or left undone by any employe in obedience to or in pursuance of any instruction or authorization received by him from the employer * * * nor for any mere error of judgment, nor any injudicious exercise of discretion * * * wherein he shall have been vested with discretion * * * and it is expressly understood and agreed that the company shall in no way be held liable hereunder to make good any loss by robbery that the employer may sustain unless the same be occasioned by or with the connivance or culpable negligence of some one or more of said employes.” The surety company agreed to reimburse the employer for loss sustained under conditions stated, “at the expiration of three months next after due and satisfactory proof of the loss herein mentioned shall have been furnished.”
    
      These contracts being in force, demand was made upon the plaintiff by the Metropolitan Company on January 27,1897, for payment -of a loss alleged to have been sustained on January 18,1897, through the culpable negligence of George S. Wickham, from, whose possession a canvas bag containing $5,817.15 was taken while he was in ■the discharge of his duties of conveying the money of the company "from the Broadway station to the Pacific Bank. Mr. U. Parsons, plaintiff’s superintendent of claims, at once gave notice to the defendant of the demand made, and consulted and acted with defendant’s Tepresentatives in investigating the loss, one of whom made a sketch -of the wagon used by Mr. Wickham xvhen the money disappeared. On March 13, 1897, the plaintiff wrote defendant that “ after an exhaustive and complete investigation of all the known circumstances connected with the loss ” it was entirely satisfied that, the said loss was occasioned by or with the culpable negligence of George S. Wickham, and that it is liable for and must pay for such loss. Demand was made that the defendant bear its proportionate share. ' On March seventeenth the plaintiff paid the claim in full, and the defendant refusing to pay any part thereof, this action xvas ¡brought against it, and the defense relied upon is that the facts do mot show that the loss was occasioned by the “ culpable negligence ” •of George S. Wickham.
    It was admitted on the trial that in addition to the $5,817.15 paid by the plaintiff to the Metropolitan Company, the additional -expense incurred by the plaintiff in investigating the claim, etc., was- $820.44, so there is no dispute as to the amount due from the -defendant^ if any sum is due.
    The sketch put in evidence and the testimony given show that -the wagon used by Wickham was like the covered delivery wagons used by dry goods stores, provided with windows at the back and .on the sides, but having no entrance except over the seat in front. The bed was built very high, resting on springs which brought the footrest directly over the front wheels, and as there was no step on the side nor any shaft — two horses being used with the wagon — it was necessary to step upon and over the wheel to get in. The seat was txvo feet from the dashboard and was but three feet four inches long and eighteen inches wide, and was provided with a hinged back which was let doxvn to reach into the' rear of the wagon. The bed comprised a “ money box,’’ having lids opening upward against the sides of the wagon and was provided with a lock for which Hr. Wickham held the key.
    The evidence shows that Mr. Wickham was officially known as. “ the Collector General ” and made the rounds of the various stations every day, taking the money in bags, labeled for deposit in various banks. Accompanying him was Hr. Battey, the driver. Both men had been employed for several years in this work without mishap. The story of what occurred is to be gathered entirely from their testimony.
    Hr. Wickham says that he had received six bags of coin from the station at Broadway and Fiftieth street, each weighing about fifty or sixty pounds, and a canvas bag containing $5,817.15 in bills With* the exception of the cents. This bag, it is admitted, was twenty-two inches long, twelve inches in height and eight inches wide at the bottom. All the bags, Mr. Wickham says, were put in the money box back of the seat and locked up and not opened until the Pacific Bank at 470 Broadway was reached at about twelve o’clock. The wagon was driven up beside the curb and stopped so the front of it was opposite a short flight of stairs which led to the bank. There were then ■ a number of people in the street. Mr. Battey went up the stairs through a corridor into the bank and brought a small truck to the head of the stairs where it could be seen from the wagon, and then came down to get the money. Mr. Wickham unlocked and opened the money box (and may, he says, have got into it) and threw the bags of coin to the front of the wagon down by the dashboard. He then locked the money box and placed the canvas bag containing the bills “behind him” on the lid of the money box and handed out to Mr. Battey two bags of coin. Mr. Battey carried the bags up the stairs to the truck and came back for two more. These were given him, Mr. Wickham having meanwhile seen that the canvas bill bag was safe'. After Mr. Battey had gone up with the second set of bags, a man approached the wagon and said something to Mr. Wickham which he says he could not understand. Mr. Battey saw this man while coming down stairs and says that his lips moved and he gesticulated and then moved along and at that time if any one had attempted to enter the wagon from the other side, he would certainly have seen him. Mr. Wickham states that he looked back again for the bag and it was there and he then handed Hr. Battey the two remaining bags of coin and 'Hr. Battey went np the stairs with them. . Turning then for the canvas bill bag, which he intended to take himself into the bank after Hr. Battey had delivered the coin and returned, Hr. Wickham discovered that the bag of bills had disappeared. . He saw no one and had no knowledge whatever of its being taken. Hr. Battey says he heard Hr. Wickham make an outcry as though something was wrong and he ran down the steps and learned that the bag of bills was gone. The bags of coin were then carried in and deposited and the two men, though there were policemen near at hand, said nothing to them, but went to the office of the treasurer of the railroad company and reported the loss. Both Hr. Wick-ham and Hr. Battey say they saw np suspicious person other than the man who spoke to Hr. Wickham and had no intimation that a theft was committed. Inquiry in the neighborhood also failed to elicit any clue as to the cause of the disappearance of the money.
    The court submitted to the jury the question whether the money was lost “ through the culpable negligence’’ of Hr. Wickham, and in its charge said that if he performed that duty “ imprudently or with a lack of watchfulness which he should have exercised, and permitted his attention to be diverted for one instant, upon any pretext, he was- guilty of negligence.” To the latter part of this charge exceptions were taken, and the trial judge pointed out that he had said “ with a lack of watchfulness, permitted his attention to be diverted.” The court also charged that “ in order to enable plaintiff to recover in this case the jury must find from the evidence that the loss of the bag of money in question was by or through the culpable negligence of George S. Wickham ; ” and defined culpable negligence as “ an extreme degree of negligence * * * stronger and greater than is meant by the ordinary term 1 negligent,’ and in case the- jury find that George S. Wickham was not guilty of such a degree of negligence the verdict must be for the defendant.” Further, the court charged that “ if the jury find that George S. Wickham performed the duties with which he was charged at the time when this loss occurred, in pursuance of his judgment, and that such loss occurred solely by reason of the judicious exercise of discretion on Ms part * * * wherein he was clothed with discretion either by instructions or by the rules and requirements of the Company,” then the verdict must be for the defendant. The court refused to charge again as to culpable negligence, or the defendant’s liability in case of the exercise of discretion, and exception was taken to the .refusal to charge as requested by defendant in these matters.
    The jury returned a verdict in favor of the plaintiff, and from the judgment so entered, and from the order denying the motion for a new trial, the defendant appeals. ,
    
      Charles C. Nadal, for the appellant.
    
      Frederic J. Swift, for the respondent.
   O’Brien, J.:

The charge of the court, that if Mr. Wickham “ permitted his attention to be diverted for one instant, upon any pretext, he was guilty of negligence,” was erroneous ; and if not subsequently corrected, would .be ground for reversal. An examination of the whole chai’ge, however, shows that the court connected these words with what preceded, “ with a lack of watchfulness which he should have exercised ; ” and immediately after the court stated that only for culpable negligence on his part could there be a recovery, defining correctly the term culpable negligence.” Any wrong impression was, therefore, removed. Nor was it error for the court to refuse thereafter the requests to charge respecting culpable negligence,” and the exercise of judgment and discretion, for tnese matters had been exactly and carefully covered by what the court had already charged.

It is suggested that the plaintiff did not carry out its agreement to pay “ at the expiration of three months,” but this clearly was an option given the plaintiff for protection merely,and upon being fully satisfied that the loss must be paid, it was at liberty to disregard the time limitation. Nor is there any force in the contention that the amount was paid without notice to the defendant. Notice of the loss was promptly given, as required by the contract, and notice was given that payment had been made.

The real question, therefore, was whether the facts show that the payment was justified under the policy, or, in other words, whether it appeared that Mr. Wickham was guilty of culpable negligence, which occasioned the loss of the money. It is argued that there is no specific evidence of such negligence or any negligence; that, taking his story as true, and there is no evidence to the contrary, there was nothing shown .that he did or left undone which was an act of negligence, and, moreover, that the testimony proves that everything that he did was in accordance with the custom and rules of the company as to such work. It is not claimed, however, that there was any defect in the manner in which the work was done so far as the method of doing it is concerned, and the case must. turn, therefore, on whether, from the version given, the inference could be drawn that Mr. Wickham was guilty of culpable negligence.

It was unnecessary to prove that Mr. Wickham, who occupied such a respectable position of caring for the money of the company, deliberately left the wagon or was directly implicated in the theft. AH that plaintiff was required to prove was that he was culpably negligent. Culpable negligence, however, may be inferred from the circumstances under which, according to Mr. Wickham’s version and the undisputed facts, the loss occurred. He says he put the canvas bag behind him and that he occupied the seat, and- from there handed out the coin bags to Mr. Battey. At such time, he says,, the bag was taken. As the wagon bed was above the front wheels, and there was no step, and the seat was but three feet and- four inches, and it was eighteen inches wide and had a hinged back behind on which the bag was resting, it will be seen that any one to have taken it must have cfimbed upon the wheel and into the wagon, which rested on the springs, and reached by Mr. Wickham, through the narrow space he did not occupy, over the seat and back to where the large and heavy bag had been placed. All this the thief must have done and escaped with the bag without attracting Mr. Wick-ham’s attention, for he says he never knew of the loss until the last minute, though he saw the bag but a short interval before.

It is inconceivable that the bag could have thus been taken without the culpable negligence or dishonesty of Wickham. Ho direct charge is made that he was dishonest, but the only fair and reasonable inference is that he was culpably negfigent. The fact of the disappearance of the bag under the circumstances described raises-a jiresumption of culpable negligence. As said in Fairfax v. N. Y. C. & H. R. R. R. Co. (67 N. Y. 11,14), where a portmanteau was lost while in defendant’s charge: When the plaintiff demanded the article it had disappeared, and no account is given of the cause of such disappearance. This is, prima, facie evidence of negligence.”

The probability of a deliberate plan being conceived by dishonest persons to obtain large sums of money, should they be able' at. any time to outwit those charged with making deposits for the street railway company at the bank, imposed upon the employees of the company the duty and necessity of exercising active vigilance and care. The mere recital of how that duty was performed on the day of the loss, in our opinion raises a presumption that care and vigilance were not exercised. The question of whether upon the evidence Wickham'was guilty of culpable negligence, was properly submitted to the jury, and, after an examination of the record, we think that their verdict should not be disturbed.

The judgment and order accordingly should be affirmed, with costs.

Van Brunt, P. J., Rumsey, McLaughlin and Hatch, JJ., concurred.

Judgment and order affirmed, with costs.  