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Sanitary Can Co. v. Mullins

86 A.D. 450 Court N.Y. App. Div. English

Delivered by Jenks, J. :

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p. 450
Sanitary Can Company, Appellant, v. Robert F. Mullins, Respondent.

Headnote

Conversion — ihe withdra/wdl from a bank of money of a corporation deposited by its treasurer to Ms credit as treasurer contrary to its by-laws.
Id an action in which the issue litigated was whether the defendant, as the treasurer of the plaintiff corporation, had converted the proceeds of a check • received by the defendant from, a debtor of the corporation, it appeared that the defendant deposited the proceeds of the check in the bank to the credit of "Robert F. Mullins, Treas.that he made withdrawals from the deposit by checks thus signed and applied the money to various purposes. The defendant contended that such purposes were legitimate, while the plaintiff denied it. Held, that the refusal of the court to allow the plaintiff corporation to prove that one of its by-laws provided that checks should be drawn only when signed by the president and countersigned by the treasurer constituted prejudicial error, as, if the defendant deposited the money and thereafter drew it out contrary to the rules formulated by his principal, such act would tend to prove a conversion.
Appeal by the plaintiff, the Sanitary Oan Company, from a-judgment of the Municipal Court of the city of New York, borough of Brooklyn, in favor of the defendant, entered on the 27th day of February, 1903, dismissing the plaintiff’s complaint.
Louis L. G. Benedict, for the. appellant.
Louis L. Fawcett, for the respondent. - .

The issue is whether the defendant, who was treasurer of the plaintiff corporation, converted its funds. The funds were the proceeds of a check received' by the defendant from a debtor of the corporation. The defendant deposited them in a bank to the credit of

p. 451
“ Robert F. Mullins, Treas.” He made withdrawals therefrom by checks thus signed, and applied the money to various purposes. He contends that those purposes were legitimate, and the plaintiff denies it. The learned counsel for the appellant asked an officer of the plaintiff: “ Is there any by-law which provides how the company’s money shall be withdrawn from any depositaries % ” This was met by a general objection. In answer to a question by the court as to its materiality, the counsel stated that there was a bylaw which provided that the checks should be drawn only when signed by the president and countersigned by the treasurer. The court thereon excluded the question as not material. I think that this was error which requires a reversal of the judgment. The defendant, as treasurer, was a mere depositary, without title to the corporate funds in his possession, charged with the duty to keep them and to disburse them in accordance with the directions of the corporation. (Taylor v. Taylor, 74 Maine, 582.) If the defendant deposited the money, and thereafter drew it out contrary to the rules formulated by his principal, such an act would tend to prove, a conversion. (Laverty v. Snethen, 68 N. Y. 522 .)

The judgment should be reversed and a new trial ordered, costs; to abide the event.

Goodrich, P. J., Bartlett and Woodward, JJ., concurred.

Judgment of the Municipal Court reversed and new trial ordered, costs to abide the event.

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