Austin v. Daniels

4 Denio 299 | N.Y. Sup. Ct. | 1847

By the Court, Beardsley, J.

There is no error in this case of which the defendant can complain, and none is alleged on the part of the receiver.

It may be collected from the report of the referees, although the evidence is not stated with much detail, or particularity, that Hatch and the defendant, the president and cashier of the bank now represented by the receiver, were engaged in 1839 or 1840, in establishing a new. banking institution, called the Union Bank, under the general banking law of 1838. That with a view to this object a purchase was made, on credit, of stock of the state of Illinois, for which they assumed to give the security of the bank of which they were such officers. For this no authority existed. The bank had no power to deal in state stocks, and the president and cashier had as little to pledge its responsibility, such as it was, for their individual engagement. Subsequently, and in order to pay for this state stock, the defendant made a purchase of Illinois canal and rail-road stock, in doing which this sum of §11,250 appears to havebeen taken from the Commercial Bank and used by him. It was done by the assent of the president, who had the principal charge and management of the bank: but this, although it may show that the president was equally liable with the cashier, can afford no protection to the latter. The money was not received by him for any purpose connected with the proper business of the bank; but was taken, without the semblance of lawful authority, to be used in the private and individual business of these parties. True, there was an effort to mix up the concerns of these two institutions, but it was merely colorable, and being, as to the Commercial Bank at least, entirely unauthorized, the rights of that institution, and the liability of the parties by whom that effort was made, were in no degree affected thereby.

As far as I comprehend the principle on which this defence was supposed to be available, it must have been that while bank officers assumed or pretended to be acting on behalf of, and for the benefit of the institution of which they were officers, they could, in no case, be held responsible to the corporation for what was done. But this is a point of doctrine to be 'established, and which has not yet been done. Bank officers are but agents of the corporation, and if they transcend or abuse their powers are as much responsible to their principal as are the agents of an individual. This ought to be regarded as too plain to require argument or authority, and I shall offer neither.

In this case it was not denied that the defendant had received the sum in question. He received it either to be used for the Dank in the purchase of canal and rail road stock, or to be used for the benefit of the owners of the Union Bank—“ the concern,” as designated by. one of the witnesses. The first was an illegal object, and the second was at least equivalent to a loan of the money to the person who took it. And in either aspect the defendant was responsible for the money.

Motion to set aside report denied.