
    Union Pacific Lodge No. 17, A. O. U. W., appellee, v. Bankers Surety Company, appellant.
    Filed October 3, 1907.
    No. 14,945.
    1. Evidence. In an action by a subordinate lodge of a fraternal beneficial association, tbe books and records of the lodge when properly identified are receivable in evidence against the members of the lodge and their privies. > ■
    
    2. Corporations: Insurance: Estoppel. Where a surety company issues an indemnity policy insuring a fraternal beneficial association from loss by larceny or embezzlement of its officers, the contract not being illegal, the company will be estopped from denying the legal capacity of the association in an action on the policy by the association against the company.
    Appeal from tlie district court for Douglas county; Willis G. Sears, Judge.
    
      Affirmed.
    
    
      E. M. Bartlett and W. N. Chambers, for appellant.
    
      Weaver & Ciller, contra.
    
   Jackson, 0.

The plaintiff had judgment in an action on an employer’s indemnity policy issued by the defendant for the protection of the plaintiff against loss by larceny or embezzlement of its officers. The financier and receiver are among the principal financial officers of the plaintiff. The contract of indemnity covered both of these offices. During the period involved in the transactions in suit, Henry McCoy was the financier and Ross 0. Rowley the receiver. It was claimed in the petition that both of these officers were short in their accounts, and judgment was asked to cover the default of both. The court directed a verdict in favor of the defendant as to the claim of shortage against the financier, and the case having been submitted to a jury as to the receiver a verdict was returned against the defendant, upon which the judgment involved in this appeal was entered.

The plaintiff is the subordinate lodge of a fraternal beneficial association, which issues certificates of indemnity on the lives of its members, who are periodically assessed to pay death claims. The accounts between the lodge and its members are kept in a ledger, where each member is charged with assessments for death losses and other demands incident to the conduct of the affairs of the lodge and the grand lodge to which it is subordinate, and credited with payments as they are made. This ledger or book of account is required to be kept by the fundamental law of the order and is one of the records of the lodge. The proceeding's of the lodge are recorded in a minute hook by an officer styled the recorder, in which the receipts and disbursements of the lodge are required to be entered. The financier receives the funds due the lodge, and keeps the accounts between the lodge and its members. The funds collected by him are required to be turned over to the receiver to be disbursed under the direction of the lodge. The financier is provided with blank books of receipts to be filled out by him and delivered to persons from whom funds are received. Stubs of receipts are retained in his office showing the purpose for which the receipt was issued, the amount received, and from whom. He also keeps a cash book, in which entries are made of cash received. At the trial the court received in evidence the minute book of the lodge, showing the receipts and disbursements, together with the ledger accounts between the lodge and its members, and an expert accountant testified to having made an examination of these books, and from the books to the condition of the accounts between the lodge and its financier and receiver. From the testimony of the plaintiff’s witnesses it appeared that the cash book kept by the financier and stubs of receipts could not be found, except for a period of two or three months of the latter part of McCoy’s term of office, and, except for that period, were not produced in evidence. The appellant complains of the admission of ilie minute hook and the ledger accounts, because it is said they are not books of original entry. The charges against the members are entered in the ledger only. The credits were entered both from the cash book and the memory of the officer, so that the ledger account is the only book of account showing the complete financial transactions between the lodge and its members, and for that purpose is a book of original entry. The'recorder ordinarily kept the minutes of the lodge in shorthand notes, which were transcribed into the record. This record appears to have been read in open lodge, and had the approval of its members. Both books were required to be kept by the law of the order, and were part of the records of the lodge, and as such, when properly identified, are admissible in evidence against the members of the lodge and their privies, in an action by the lodge.

The court instructed the jury as follows: “You are instructed that mere discrepancies in accounts do not constitute larceny or embezzlement, but that the larceny or embezzlement, if any, must be shown by the plaintiff as a material fact, and in that regard you may consider the accounts of the lodge, as shown by the books received in evidence, and as bearing upon the question as to whether or not the said Rowley did, as such officer, during said time covered by defendant’s bond, have plaintiff’s moneys in his possession that were not paid out according to the direction of the lodge, nor turned over to his successor in office.” It is said that this instruction is erroneous, because of a lack of evidence to show that the receiver had money in his possession that was not paid out according to the direction of the lodge or turned over to his successor in office, and that therefore there was no evidence of larceny or embezzlement. If the testimony of the expert accountant is to be believed, there is no merit in this contention, and the weight to be given ,to the evidence was a matter exclusively for the jury.

The defendant requested the court to instruct the jury that a surety is entitled to stand upon the strict terms of Ms contract; be is bound only to tbe extent and in the manner pointed out in bis obligation; and, further, that fraud is never presumed, but must be proved by the party asserting it by a fair preponderance of tbe evidence. Tbe court refused these instructions, and of this ruling tbe defendant complains. Tbe rules announced in tbe instructions requested are doubtless correct as abstract propositions of law, but our attention has not been called to any facts involved in this controversy which would make tbe refusal of the trial court to give the instructions prejudicial error, and it is not explained bow such instructions would have aided tbe jury to arrive at a different conclusion.

Tbe defendant produced, and sought to have introduced in evidence, a letter received by the plaintiff from tbe recorder of tbe grand lodge. On objection tbe offer was denied, and it is said that this letter discloses inaccuracies in tbe accounts of tbe lodge. Tbe trial court did not err in excluding this letter from tbe consideration of tbe jury. Tbe books of the lodge were in evidence, they were examined by accountants on behalf of tbe defendant, and tbe grand recorder himself was present at the trial and examined as a witness. If tbe books were inaccurate, the proof was at hand, and in any event there seems to be no theory presented by tbe record upon which tbe letter was admissible.

Many other rulings of tbe trial court on tbe admission of evidence are discussed in tbe brief. None of tbe rulings, however, are found to be prejudicial to tbe defendant.

Finally, it is urged that tbe petition does not show tbe legal capacity of tbe plaintiff to sue. The defendant is not favorably ' situated to raise this question. It contracted with tbe plaintiff, and tbe contract is not illegal. It is therefore estopped from denying tbe legal capacity of tbe plaintiff.

It is recommended that tbe judgment of the district court be affirmed.

Ames, C., concurs.

By the Court: For the reasons stated in the foregoing opinion, the judgment of the district court is

Affirmed.  