Heig v. Caspary

Headnote

Conversion ■—■ corporations — action to recover proceeds of checks of corporation drawn by its treasurer and delivered by him in payment of his individual indebtedness.

Heig v. Caspary, 191 App. Div. 560 , affirmed.

Appeal from an order of the Appellate Division of the Supreme Court in the first judicial department, entered April 30, 1920, reversing a judgment in favor of defendant entered upon a dismissal of the complaint by the court at a Trial Term, a jury having been waived. Plaintiff sued as trustee in bankruptcy of the corporation known as Joseph Meyer & Co., Inc. The complaint in effect alleged that one Joseph Meyer, the president and treasurer of the corporation, was authorized to sign checks against the funds of the corporation for the purpose of its business, but in violation of his trust and duty as trustee of the assets of the corporation and in derogation of the rights of the creditors of the said corporation, while said corporation was insolvent used the funds of the corporation in payment of his debts and obligations to the defendant, a stockbroker, in connection with his account in his own individual name with the defendant for the purchase of stocks and bonds on margin. It was also alleged that the moneys were unlawfully and unauthorizedly withdrawn by Meyer from the bank account of the corporation by means of various checks made to the order of defendant and delivered to him by

Meyer and that the defendant received and accepted said checks with knowledge of the facts hereinbefore set forth and without proper inquiry and investigation, and converted and appropriated the proceeds of said checks to his own use, to the damage of the corporation and its creditors.