Mishnah 8 in the ninth chapter of tractate Bava Kamma is a direct continuation of the last case in the previous mishnah. There we dealt with an unpaid watchman who did a favor for his friend and guarded his item, and the item disappeared, and at the time of the claim the watchman claimed that it was lost. Our mishnah comes to discuss a case where the claim is not that the item was lost, but that it was stolen.
The Torah law - one who claims the item was stolen:
When the watchman claims that the item was stolen, and it turns out that he himself took it, he is liable for double payment: he does not merely return the stolen item, but pays double - he pays an additional amount equal to the value of the item at the time of the theft. This is a Torah penalty, since the watchman is considered a thief, and thus the Torah requires that he be liable just like a regular thief.
The language of the mishnah:
"Heichan pikdoni" - the depositor claims from the watchman the item he gave him to guard.
"Amar lo nignav" - the watchman claims that the item was stolen, unlike the previous mishnah where he claimed that it was lost.
"Mashbiacha ani, ve'amar amen" - the depositor makes him swear that the item is not in his possession, and the watchman swears and confirms his claim.
"Veha'eidim me'idim oso shegenavo" - witnesses come and testify that the watchman himself stole the item.
"Meshalem tashlumei kefel" - he must return double, for he made the claim of a thief and is considered a thief in all respects.
He admitted on his own:
If, before the witnesses came and incriminated him, the watchman admitted on his own that he lied and that the item was not stolen - "meshalem keren vechomesh ve'asham". Instead of double payment, after he admitted that he swore falsely, he must return the principal - what he stole, add a fifth to it in order to achieve atonement, and bring a guilt offering for robbery.
The witnesses came and afterwards he admitted:
Here there is an interesting twist: if the witnesses first came and testified against him, and only afterwards he admitted that he took the item, he pays neither the double payment nor the fifth. The reason is technical: one can only be liable for one of the two obligations - the witnesses make him liable for double payment, and his admission makes him liable for a fifth - and since the two obligations apply to him at once, he does not pay either of them. Ultimately: he returns the item, admits his guilt, and does not pay double, but brings a guilt offering for robbery to achieve atonement.
In summary: In this mishnah we learned the law of an unpaid watchman who claims that the item was stolen. Once he swore falsely and witnesses came and testified that he himself stole it - he pays double payment just like a thief. If he admitted on his own before the witnesses came - he pays the principal and a fifth and brings a guilt offering for robbery. If the witnesses came first and only afterwards he admitted - he pays neither double payment nor a fifth, but returns the principal and brings a guilt offering for robbery for atonement.