4 Paige Ch. 127 | New York Court of Chancery | 1833
Although there is a general prayer for relief against the defendant M. Reed, the bill shows no ground of suit against him which could entitle the complainants to a decree. Besides, they precluded themselves from having any decree against him, by examining him as a witness in the cause. (Per Ld. Eldon, 3 Dow’s Rep, 150.) And in such cases, the complainant must pay costs to the defendant examined, although' he would not have been entitled to such costs if he had not been thus examined. (Har
The supplemental bill appears to have been unnecessarily and improperly filed, as it brings forward no new matter except such as had arisen before the commencement of the suit, and which therefore should have been introduced into the original bill by way of amendment. (Stafford v. Howlett &
The same answer must be given to the objection to the jurisdiction of this court, on the ground that the complainants, if the allegations in the bill are true, had a perfect and available defence at law to the suit brought against them by the canal companies. If improper and untrue allegations are inserted in a bill, for the purpose of preventing a demurrer, and to give apparent jurisdiction to a court of equity, the defendant may, by his answer, deny those allegations, and insist that as to the other matters the complainant has a remedy at law. Although such an objection, in an answer, will not save the necessity of a full discovery as to all the matters charged in the bill, it will, at the hearing, be sufficient to prevent the complainant from obtaining his relief in this court. The court of chancery is constantly burthened with the investigation of facts, upon written depositions and. at great expense, when from the face of the bill itself, or from the testimony in the case, it is perfectly evident that the complainant’s appropriate remedy was in a court of law, and not in this court. But if the defendant will not make his objection in season, he must be subjected to the extra expense of a litigation here. Where the objection is made in the answer, the complainant proceeds at the peril of costs, if that objection is sustained at the hearing. In this case there is no doubt that it would have been a perfect defence to the suit at law, if the complainants had established the fact that the money was drawn from the bank by authority of the canal companies, or that the companies had subsequently sanctioned the act, as alleged by the complainants in their bill. But as the question of jurisdiction was not raised until after the testimony had been taken
The canal companies are not entitled to recover on the ground of any special agreement, made with Cheesebrough 'as president and Brown as a director of the Fulton Bank, to receive the money in deposit' and to pay interest therefor. I have no doubt, from the testimony in the cause, that such an agreement was actually made by them. Although Cheesebrough merely gave a tacit assent to the agreement made by Brown, in his name and in his presence, yet if he had been authorized as president of the bank to make such an agreement, it would have been as binding upon the complainants as if the same had been made by him personally. But it was no part of the ordinary business of banking to receive deposits of money on interest; and the president of the bank had no right to make such an agreement without some special authority from the board-of directors. Neither is there any evidence here that Cheesebrough or Brown had any such special authority, or that any custom or practice existed in the banks of New-Ytirk from which such an authority can be inferred. The only use, therefore, which the defendants are authorized to make of the agreement, is to show that the president of the bank was apprised of the fact that it was not the intention either of the directors of the canal companies, or of their finance committee, that the monies should be immediately drawn out of the bank upon the checks of Brown. And if he was aware of the intention of Brown thus to obtain possession of the funds of the canal companies, he was a participator in the fraud, and rendered himself liable, either to the bank for a violation of his duty as president, or to the canal companies in his character of director and as a member of the finance committee. He was undoubtedly aware of the fact that stock had been subscribed in his name, and that he had been elected a director and a member of the finance committee. It appears by the minutes of the proceedings of the companies that he was present at a meeting of the directors on the seventh of September, 1825, when he was appointed a member of the finance committee; and he was present at a meeting of the
Without taking up time to refer at length to the testimony upon which the opinion is founded, I have arrived at the conclusion that the directors of the companies never intended to put their corporate funds under the control of Brown as president. Neither did the finance committee leave the funds in his hands, or authorize him to draw the same from the bank, either for the purposes of speculation or otherwise; but that, the money was drawn from the bank improperly and fraudulently, so far as relates to any actual or intended authority, from the companies or their authorized agents. I am also satisfied that they have done no act, subsequent to the withdrawal of the money, which can be considered as sanctioning the acts of Brown in withdrawing the money from the bank, or his subsequent misappropriation thereof. The cause must then turn upon the question whether the agents of the companies have so negligently conducted themselves in making this deposit as to justify the officers' of the bank in paying out the money on the checks of Brown, under the supposition, on their part, that he was authorized to draw for the same.
It is insisted on the part of the complainants that Brown, by virtue of his general powers as president of these companies, had a right to draw upon the bank for any funds stand- ’ ing upon their books to the credit of the companies, or of either of them. There is certainly nothing in the acts of incorporation giving the president any greater control over the property or funds of the companies than is given to any other
It is proved, however, that it was the custom of the banks in New-York, upon the opening a new account on a deposit in the bank, whether by a corporation or otherwise, for the person making the deposit or who was to draw the money, to leave his signature in the signature book, and that all payments were made upon checks with such signature. In this case it is left doubtful, by the testimony, whether the money was carried to the bank by Brown, or by some other person; though the probability is it was sent by Brown. I do not think, however, it is at all material whether the money was actually carried there by him or not; as there can be no doubt that he was there at the time the deposit was made, and gave directions as to the mode in which it was to be drawn out, in such a manner as to induce the officers of the bank to suppose he had the control of the fund. And as no objection was made by the person depositing the fund, and no certificate was required showing that the money was actually deposited by Mr. Cox as the secretary of the company, the deposit, for the purpose of settling the rights of the parties in this suit, must be considered to have been made by Brown, or under his direction. If, by the negligence of those who had the fund in their possession, it has been deposited in such a manner as to give the officers of the bank reason to suppose the deposit was made by Brown in his character of president, the canal com
It seemed to be conceded, on the argument, by one of the counsel for the complainants, that the president of the bank was present on the morning of the 8th of September, and was aware that Brown had left, his signature as president of the canal companies, and was about to commit a fraud, upon one party or the other by abstracting the money from the bank without authority. I did not, however, understand the counsel as admitting the existence of the fact, independent of what he supposed was established by the proofs. I have therefore been- obliged to look into the depositions, to see whether there was any thing authorizing, the court to draw such a conclusion, as against his clients. Cheesebrough was examined as a witness by the adverse party, and swore that he did not see Brown leave his signature in the signature book; and that he did not recollect being in the bank when the deposit was made, or of seeing Brown there. As Cheesebrough, from what had taken place the evening before, knew that Brown had no right to draw out the money, if he was present and cognizant of what was going on the next morning, he knew Brown was committing a fraud upon the bank or the canal companies ; and this of itself would make such an impression on the mind that it could not easily have been forgotten. I must therefore conclude that Cheesebrough was not present and knowing to these transactions, or that he has committed corrupt perjury, by a wilful suppression of the truth. He also swears positively that he did not know that those - funds had been withdrawn, previous to his leaving the institution; which was more than nine months afterwards. It is true, this part
The decree of the vice chancellor, except as to the costs of Reed, must therefore be affirmed. But as this was a joint appeal, by Reed and the other defendants, and as I have not given costs in his favor, against the respondents, on the reversal of
See Grandin v. Le Roy & Smith, (2 Paige’s Rep. 509;) and Rees v. Smith, (1 Hammond’s Ohio Rep. 127.)