GR L 2686; (November, 1906) (Digest)
G.R. No. L‑2686
November 8, 1906
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FACTS
– C. Heinszen & Co. (plaintiffs) contracted with Samuel C. Samuels to act as their fiduciary agent.
– The contract required Samuels to account for all property delivered to him and to furnish a $6,000 bond guaranteeing performance against loss by larceny or embezzlement.
– The Fidelity and Deposit Co. of Maryland (defendant) issued the bond in favor of the plaintiffs, acknowledging Samuels’ fiduciary obligations.
– While the bond was in force, Samuels received ₱15,419.97 (Mexican pesos) worth of merchandise from the plaintiffs and failed to account for or return it, effectively appropriating the value.
– Plaintiffs sued the defendant to enforce the bond and recover the amount up to the bond’s limit.
– The Court of First Instance awarded the plaintiffs $6,000 (≈ ₱12,000) with statutory interest, ordering payment by the defendant.
– The defendant appealed, alleging (1) error in the judgment against it and (2) error in denying a motion for a new trial; it further contended that Samuels’ loss was not covered by the bond and that no larceny or embezzlement occurred.
ISSUE
1. Whether the bond issued by the Fidelity and Deposit Co. is enforceable to compensate the plaintiffs for the loss caused by Samuels’ failure to account for and return the delivered merchandise.
2. Whether the lower court erred in affirming liability and in refusing the defendant’s motion for a new trial.
RULING
– The Court held that the bond was valid and expressly conditioned on Samuels’ faithful performance; the loss of ₱15,419.97 was directly attributable to Samuels’ breach (misappropration), which falls within the bond’s scope.
– The plaintiff proved the missing merchandise and Samuels’ refusal to account, satisfying the bond’s requirement for compensation.
– Consequently, the lower court’s judgment is affirmed; the defendant must pay $6,000 (₱12,000) with 6 % annual interest from May 5, 1903, plus costs.
– No error was found in the denial of a new trial.
Disposition: Judgment of the Court of First Instance affirmed; execution ordered.