45 N.Y.S. 255 | N.Y. App. Div. | 1897
Lead Opinion
The action was brought to recover damages alleged to have been1. •sustained by plaintiff by reason of the negligence of the defendant, with reference to three certificates of stock which had been surrendered for the purpose of transferring the stock.
The defendant’s business consisted of the exhibition of wax figures and the giving of entertainments and concerts in West Twenty-third street, New York city. In 1891, Theodore Hillman was its president, Louis Windmuller was its treasurer and James W. Monk was its secretary. ■ ' ■
Ernest Andre Jurgens went into defendant’s employ in January, 1888, and was formally appointed superintendent of the Eden .Musee proper March IT, 1888, and had charge of the wax'figures and musical entertainments, and the defendant’s employees and books and of the office generally. Among the books in his charge were the check book, the stock certificate book and the stock transfer book, and his duty included the filling out of checks and certificates ■of stock, and making entries in the check book showing the moneys •deposited to the defendant’s credit in its bank of deposit. On May 8, 1891, he was appointed manager and remained in this position until he left defendant’s employ in October^ 1.891.
Frank W. Reynolds was in the defendant’s employ from 1884 or 1885 until October, 1891.
In April, 1891, the firm of Seligburg & Co., of which Hillman,defendant’s president, was a member, held four certificates of stock
These four certificates were not canceled by Jurgens or pasted in the stock certificate book at the time the new certificate was issued. Jurgens was the only person who had the combination of the safe. The four certificates were kept'in the safe until May 8, 1891, when Reynolds applied to this -plaintiff for a loan of $2,500, to himself and Jurgens, upon a note made by him and indorsed by Jurgens. Plaintiff refused to make the loan without security, and thereupon these four certificates which Jurgens took from the safe and delivered to Reynolds, for the purpose, were pledged to plaintiff as security for the loan. The loan ivas thereafter paid in part and renewed in part, and there remains unpaid thereon $1,800, besides some interest. In October, 1891, it was discovered that Jurgens and Reynolds had been misappropriating the moneys of the company, and they left its employ.
Hntil that time the company had perfect confidence in the honesty
This case has been twice tried. The first trial resulted in a judgment for plaintiff, which was affirmed by the -Supreme Court at General Term, but reversed by the Court of Appeals, a new trial being ordered. A good many things were determined-by the Court of Appeals which -were binding upon the referee upon the second trial, and which must be followed, here. The four certificates were not negotiable so far as to protect the plaintiff’s title as holder thereof acquired through Jurgens, who, in effect, stole them. Jurgens was in no sense the agent of, the defendant, authorized to negotiate the securities. The defendant is not chargeable with negligence, so as to render it liable for damages, suffered by the plaintiff by the unauthorized use of the certificates, based upon the fact that in violation of the by-laws 'it permitted the certificates to remain uncanceled and in its safe, to which Jurgens had access, and thereby enabled him to take and use them, or that the company neglected to exercise a proper supervision over its business and its employees ■ and committed to Jurgens the management of its affairs without special inquiry into the manner in wiiich he discharged his duties, unless it be shown that the defendant knew that Jurgens was dishonest or had reasons to suspect his dishonesty.
These propositions were established by the decision of the Court of Appeals in this case, and they left no opportunity for the plaintiff to establish a right to recover upon a second trial except by showing that the defendant knew, or had reason to suspect, that Jurgens was
We need not consider the evidence with reference to Jurgens’ dishonesty before he went , into the defendant’s employ and the defendant’s alleged information with reference thereto, because all that evidence was discredited and disregarded by the referee. We come to the precise ground Upon which the decision of the referee was based. We do no't understand it to be claimed that the defendant or its officers had actual knowledge of Jurgens’, dishonesty or actually suspected it before the certificates were misappropriated. The claim is that they had reason to suspect it.
It will be remembered that Jurgens entered the defendant’s employ in January, 1888, and was made superintendent of its property and business March 17, 1888. From that time down to March 1, 1891, three years, he served the defendant faithfully and was guilty of no dishonesty. About March 1, 1891, he began to misappropriate defendant’s moneys and continued to do this steadily down to the time discovery was made, in October, 1891. It seems that moneys received. for tickets of admission to the museum amounted to from $300 to $500 per day. These moneys came into the hands of Jurgens, who put them in the safe over night and then delivered them to Reynolds, whose duty it was to deposit them in the bank and have the amounts entered upon the bank pass book. This book was then delivered to Jurgens, who made the entries of deposits upon the check book. The man in the box office informed Jurgens each day of the amounts of the receipts for the day by sending him a slip with the amount thereon. The entries upon the check book were made to agree with the slip from the box office, but the deposits entered upon the bank pass book were less, by reason of the amount taken by Jurgens from the actual receipts of the box office before the money was sent to the bank for deposit. An examination of the bank pass book and the ' check book and a comparison of the entries therein of deposits for each day would
■ These are facts upon which the referee found' that the defendant had reason to suspect Jurgens of dishonesty prior to the time the certificates were taken and used, May 8, 1891. Jurgens had been honest and faithful to every trust reposed' in him from January, 1888, to March, 1891. He had then been dishonest from March till May. The officers of the' defendant did not actually know or suspect him of this dishonesty during this short time, and yet it, is said they had reason to suspect it. Why ? Because they might have discovered it if they had exercised more supervision over their employee' and the business he. was transacting. They might have discovered it if the books had been examined and the entries therein
We think there was no evidence which justified the referee in finding that the defendant had reason to suspect Jurgens of dishonesty, while it left the certificates in question in the safe which he had charge of. The officers had a right to rely upon the honesty of an employee who had served them faithfully for more than three years, and were not negligent because they did not look upon him
The judgment should be reversed and a new trial ordered, with costs to appellant to abide event,
Rumsey, Ingraham and Parker, JJ., concurred; O’Brien, J., dissented.
Dissenting Opinion
For reasons given by referee, I dissent.
.- Judgment reversed, new trial ordered. Costs, to .appellant to abide event. '