Carnegie Trust Co. v. Kress

Headnote

Carnegie Trust Co. v. Kress, 167 App. Div. 903 , affirmed.

Appeal, by permission, from an order of the Appellate Division of the Supreme Court in the first judicial department, entered February 19, 1915, which affirmed an order of Special Term granting a motion by plaintiff for judgment in its favor upon the pleadings. The action is brought by the superintendent of banks of the state of New York, acting in the name of the Carnegie Trust Company, by virtue of authority which he claims to derive from section 19 of the New York State Banking Law, against a former director of said trust company to recover an amount due upon certain notes. The complaint alleged that the defendant had failed to exercise his duties as director with care and prudence, but had on the contrary concurred in and connived at the procuring of the said notes and the disposition of the money for his own individual use and profit, and had failed to exercise good faith in and about the corporate affairs, well knowing that the securities for the loans were insufficient and well knowing that the makers were insolvent and irresponsible persons. Defendant demurred and claims that section 19 of the Banking Law is unconstitutional. The following question was certified: “Does the complaint state facts sufficient to constitute a cause of action ? ”