This record has been reconsidered with reference to the matters discussed in the brief in support of the application for rehearing. The court continues satisfied with its original conclusion that "the bonding company's obligation was to indemnify the employer, to the extent of $5,000, for losses resulting to it from the infidelity of Hunter within the terms of the contract;" that the fact, if so, that this employer may have had, or may have, an enforceable claim against the Selma National Bank for the sums deducted from the employer's account with that bank on checks drawn upon the account by Hunter ascashier, when he was not the cashier of the employer, is immaterial, and without effect to qualify the contractual right of this employer to enforce the indemnity promised it in the defendant's bond, as was soundly ruled in Champion Ice Co. v. Amer. Bonding Co., 115 Ky. 863, 75 S.W. 197, 103 Am. St. Rep. 356, 362, and that there is no merit in the defendant's contention that the second notice of claim under the bond effected to contradict or to waive the aggregate of the net sum asserted in the notices and in the complaint to have been lost; particularly since it is apparent that the second notice of claim was but supplemental to that originally given the defendant on the day previous. It is hardly necessary to repeat that if the plaintiff suffered losses aggregating as much as $5,000 through the infidelity of Hunter within the period covered by the bond and for causes described in the bond, the defendant, as indemnitor, was and is liable therefor in this action, unless such right to recover was waived or extinguished, which is not shown; and hence there is no room for recourse to the rule for the application of payments of which specific account was taken in the original opinion.
It is urged that error affects our ruling on the question of the propriety of the trial court's action in permitting the auditor, Pettiford, to testify "that certain specific amounts of money alleged to have been embezzled by Hunter were not noted or accounted for in any manner on the books of the bank." It was affirmatively shown that Hunter's duties included the duty to make and keep records from which the institution's bookkeeper would, under the system prescribed, transfer the entries to the more permanent books used to perpetuate the bank's daily operations. In these circumstances it was proper to admit the negative testimony indicated, it being impracticable, because of the volume of the book matter, to present evidence to this negative effect otherwise than through the means of the advised statement of a witness who had examined the books. Burton v. Driggs, 20 Wall. 125, 136,22 L.Ed. 299; 2 Ency. of Ev. pp. 284, 285. There is no merit in the criticism that it was not shown, as a condition precedent to the competency of this character of evidence, that the books inquired about, to quote the brief in support of the application for rehearing, "were kept *Page 345 by or under the direction of Hunter, or that they were correctly kept." The first alternative of the criticism was answered by the indicated evidence showing Hunter's affirmative duty to make the appropriate entries. The other branch of the criticism is based upon an objection directed against the auditor's conclusion, of a negative nature, from a number of books, one at least of which it was Hunter's affirmative duty to keep. It was hence unsupported by the predicate for its assertion. But aside from that, the issue of Hunter's infidelity, under the indemnity sued on, was open to be established by evidence tending to show breaches of his duty in making records or entries that, if made, would have disclosed his infidelity or have hindered the promotion or accomplishment of his criminal purposes.
Since the records to be made by the bookkeeper were, under the system prescribed, to be taken from the original records or entries made by Hunter in the discharge of his duties, the books regularly kept by the bank's bookkeeper, presumptively correctly, were matters admissible, though in a sense collateral to the particular inquiry, viz. Hunter's infidelity vel non in the premises. If the auditor's conclusion was ill founded in respect of his statement, of a negative nature, that a record of certain of Hunter's transactions did not appear on the books of the bank — were not noted, even, on the original record his duty required him to keep — the defendant had ample opportunity and facility from the books themselves to refute the auditor's stated conclusion.
There was credible evidence, including the admission, detailed in the testimony as having been made by Hunter himself, that the bank lost the amount represented by the checks made upon or drawn against the plaintiff's account with the Selma National Bank. Notwithstanding Hunter employed a part of these sums to discharge demands against the plaintiff bank, the evidence justified the trial court's conclusion that the failure to note these disbursements on the books of the plaintiff bank laid the premise for the misappropriation by him of the amount of excess thus created, thereby permitting, in that connection, a balance between the books and the monetary assets of the bank. As the trial court found, it was inferable from the evidence that $2,490 recovered from Hunter was of the funds extracted after his defalcation was discovered. The supplementary statement of loss, itself, recited that the stated sum was of the sum so extracted. There was no effort on defendant's part to restrict the efficiency of this recital to show that such was the fact. This recital was some evidence of the fact it affirmed, and, no objection to it or effort to limit it being made or interposed, was due to be considered by the court as evidence of the fact it purported to recite. The text of 4 Cooley's Briefs on Ins., pp. 3437, 3438, concludes nothing to the contrary; that text being predicated of decisions that considered the admissibility of statements in proofs of loss where objections thereto were made on the trial.
The points pressed in the application for rehearing are, in our opinion, without merit.
The application is denied.
ANDERSON, C. J., and SAYRE and GARDNER, JJ., concur.