41 N.J. Eq. 137 | New York Court of Chancery | 1886
The object of this suit is to establish and enforce the liability of the defendant to the depositors of the Mechanics and Laborers Savings Bank, in respect of sundry derelictions of duty on his part as treasurer of that corporation. He held the office from December 3d, 1869, to November 19th, 1877. The bill was filed August 31st, 1885. It states that the defendant was, during all the time that he held the office of treasurer, one of the managers of the bank; the by-laws providing that all of the officers should be elected from the board of managers; that he was negligent in the discharge of his duties with respect to certain illegal loans and advances, some of which were made by the managers upon the personal security of the borrowers upon promissory notes (and in one instance upon a chattel mortgage), and others upon real property; that he paid out, or suffered to be paid out, sundry sums as such loans or advances without any order of the board or of its finance committee, and without any authority, except his own judgment or the request of the president ; and that he was negligent in the care of the funds by
In the brief of the complainant’s counsel it is said that the theory of the bill is that the defendant was a trustee, under a special trust, of such funds as came to his hands, with duties as-to the due care of those funds, and the disbursing thereof only in certain authorized ways, by which trust the duties were created, and that they are evidenced partly by the meaning which the law attaches to the acceptance of the offi'de denominated treasurer, and partly by the express provisions of the by-laws and usages under which he took and held office; that so far as they rest upon or are defined by by-laws or practice, they are set forth in the bill; and that the trust is clearly as much of an express trust as is the similar duty on the part of the several managers-to take care of the funds to the extent of their respective functions. While it is said that the object of this suit is to charge the defendant in respect of his conduct as treasurer, it is manifest that that is but an imperfect and inadequate statement of the scope of the bill. The object is to charge him, in the interest of the depositors, with dereliction of duty, as a manager holding an office of special trust in the management. The liability which the complainant thus seeks to establish, is one cognizable-in equity alone. The complainant claims that the defendant, in paying out, as treasurer, money illegally lent by the board of managers, was not protected by the action of the board in lending it or directing him to pay it; but that, on the contrary, it was his duty, because lie was a manager, not to pay it, and to-refuse to co-operate in the illegal action of the board, and to-resist it; and that failure to do so rendered him liable to the-depositors for the amount of the illegal loans. This claim is manifestly wholly based upon the equitable obligation of the
The demurrer will be overruled.
