Columbia Bank v. Gospel Tabernacle Church — 38 N.Y. St. Rep. 915

Majority

p. 915

Columbia Bank, App’lt, v. The Gospel Tabernacle Church, Resp’t.^[1]

(Court of Appeals, Second Division,

Filed June 23, 1891.)

Headnote

1. Appeal.

Where at the close of plaintiff’s' case defendant’s counsel moves for a non-suit, which was granted and exception taken by plaintiff, and then the plaintiff proposes and requests findings of facts and questions of law which were passed upon by the referee, an appeal becomes one from the judgment upon the merits as directed by the referee and not as a judgment of non-suit, and plaintiff’s relief from having it so treated was obtainable by a motion to correct the record in that respect.

2. Religious corporation—Bank account of treasurer.

Where the treasurer of a religious corporation opens a bank account in his name as treasurer without the consent, knowledge or authority of its board of trustees, and deposits its funds therein without the authority or direction of the corporation, it is his individual account, and the corporation is not responsible for any dealings by him with the bank not authorized by its board of trustees.

Appeal from a judgment of the general term of the superior court of the city of New York affirming a judgment entered upon the report of Hamilton Cole, Esq., referee, to whom was referred all the issues to hear and determine, dismissing the complaint on the merits.

The cause of action stated in the complaint is substantially that the defendant, a religious corporation, was a depositor in plaintiff bank, and kept an account therein from which it drew out, and deposited moneys arising from receipts of money by defendant and proceeds of discounts for defendant, and that the defendant drew out an excess of $3,428.25 over its deposits, and further that the plaintiff on November 1, 1886, received from defendant a certain promissory note dated November, 1, 1886, made by the Tribune & Farmer Company, Limited, for the sum of $3,500 at four months from its date; said note, when so received, was duly endorsed by said payee thereof and by defendant, and was received by plaintiff as collateral security for such credits, loans and advances, or for some of them made, as aforesaid, to defendant ; that plaintiff held said note until its maturity, when it was duly presented for payment and payment demanded, but no part of the same was paid, and the same was duly protested, all of which defendant was duly notified. The plaintiff still holds said note and offers to surrender the same to defendant.

The demand is for judgment for $3,428.25, the amount of the alleged overdraft, and not for the amount of the note, with interest.

_ The answer denies the material allegations constituting the liability; and further, that said note and loans and discounts were without the authority and beyond the power of defendant,

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and were in fraud of defendant, and of all of which plaintiff had notice.

One Sniffen was the treasurer and one of the trustees of defendant. He as such treasurer opened the account and had all the transactions with plaintiff out of which the liability of the deis claimed to have arisen. The referee finds that the defendant was not aware of the opening of the account or of these transactions, and that they were unauthorized by the defendant. The referee, after an examination and consideration of the evidence, made full findings of fact, and as a conclusion of law that the defendant was not liable, and dismissed the complaint upon the merits.

Other facts will be found in the opinion.

Adolph L. Sanger, with Louis Marshall, for app’lt; Edward S. Clinch, for resp’t.

The plaintiff claims the right to treat the case as a question of law simply arising upon a judgment of nonsuit, and that as there was some evidence of plaintiff’s claim, it would have had the right to go to a jury, or, in the absence of a jury, to have the court or referee pass upon such evidence.

The answer is that the plaintiff, by proposing and requesting findings, consented to and did in fact treat the case as one where the whole evidence was to be passed upon and which was in fact passed upon and findings made for plaintiff as well as defendant, and so the referee properly dismissed the case upon the merits.

These facts appear from the case upon appeal; that at the close of the examination and cross-examination of plaintiff’s witnesses, that the- defendant’s counsel moved for a nonsuit, which was granted and an exception taken by plaintiff.

It further appears that the referee proceeded to take the testimony and proofs offered, and having considered the same and the arguments of counsel thereupon, etc., and that the plaintff duly submitted to the referee the following, as to which he made the rulings as they respectively appear:

“ The plaintiff submits the following statement of the facts which it deems established by the evidence, and of the rulings upon questions of law which it requests the referee to make.”

The plaintiff prepared twenty-six findings of fact, a part of which were found and the rest refused or were found as modified, and four findings or conclusions of law, and also took twenty-eight exceptions of -fact and to the refusal to find the conclusions of law.

It should be also stated that the defendant’s counsel examined and cross-examined all the witnesses called by plaintiff and some of them at great length and among the witnesses so examined were some of the trustees and the pastor of the defendant.

Hnder these circumstances, it seems to me that this court should treat this appeal as an appeal from a judgment-upon the merits as directed by the referee, and not as a judgment of nonsuit, and that the plaintiff’s relief from having the judgment so treated was obtainable by a motion to correct the record in that respect.

p. 917

The two cases cited relied upon by the appellant to support its contention in that regard are Scofield v. Hernandez, 47 N. Y, 313 , and Forbes v. Chichester, 30 N. Y. State Rep., 370, but they are, in some essentials, unlike the case at bar. Both cases were claims presented against the estates of decedents, and were referred under the statute. The proceedings in such cases are statutory and special. Roe v. Boyle, 81 N. Y., 305 ; Mowry v. Peet, 88 id., 453 .

In the former case, 47 N. Y., supra, the referee, at the close of plaintiff’s or claimant’s evidence and upon motion of the defendant, granted a non-suit, to which plaintiff duly excepted and the referee afterward made findings. It does not appear that the defendant or the plaintiff submitted or requested the referee to make any findings or took any step in that direction. It moreover appears from the recqrd that the case cited was a judgment of non-suit and not upon the merits."

In the case of Forbes v. Chihcester, supra, the defendant at the close of plaintiff’s case made a motion for a non-suit and the referee reserved his decision. He then wrote an elaborate opinion based upon the plaintiff’s evidence at the conclusion of which he said: “ I think the defendant’s motion should be granted.” After this the case was opened and the plaintiff put in further evidence and again rested and the defendant renewed his motion for a non-suit. The defendant offered no testimony. The referee reserved his decision, but later made findings of fact and granted the defendant’s motion for non-suit.

It will be observed that the defendant did not in the cases cited, as was done in the case under consideration, propose or request any findings whether of law or fact and did not file any exceptions to the findings. The record in the case at bar shows an ordinary action at law and contains the requests and findings upon the part of both plaintiff and defendant and exceptions upon the part of the defendant, and also, that the judgment was for the defendant upon the merits. Besides the defendant in this case by an examination of plaintiff’s witnesses proved affirmatively, among other facts, the fact that the defendant had no knowledge that Sniffen as its treasurer had opened an account with the plaintiff; that the defendant’s board of trustees never authorized or ratified the discounting of any notes for defendant; that the proceeds of the discount of the note in question made by “ The Tribune & Farmer Co., Limited,” and endorsed by Sniffen as treasurer, was applied at plaintiff’s bank to pay two notes given by Weed to Sniffen for his personal use and the balance of the proceeds, $628.25, were paid to Hubbard, plaintiff’s cashier, on account of a personal tranaction between him and Sniffen.

From the practice of the counsel upon the trial and evidence before the referee, and upon which he made findings, and defendant took exceptions, the character of the referee’s report and the character and provisions of the judgment, I am very clear that the judgment was, and was intended to be, a judgment upon the merits, and should be so treated upon the consideration of this appeal. Van Derlip v. Keyser, 68 N. Y., 443 .

It might very properly be suggested in this connection, that as

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the form of the judgment, being a judgment upon the merits, that the plaintiff should have moved to set the same aside for irregularity, if the conduct of the counsel and proceedings upon the trial did not call for such a judgment, or if such judgment, was not intended or expected.

That would have been the ordinary and proper proceeding, and would, no doubt, have relieved this court from its present embarrassment in relation to that question, and would also have changed very materially the line of argument of counsel upon this appeal.

(The one course required a strain of argument, and the other a strain of affidavit.)

If these views are correct, this appeal is to be considered and decided as an appeal from a judgment upon the merits, and not as a judgment.of nonsuit.

The case of The People's Bank v. St. Anthony's R. C. Church, 109 N. Y, 512 ; 16 N. Y. State Rep., 856, clearly settled these propositions of law in relation to religious corporations created under the act of 1813 (chap. 60), and render any further discussion of them unnecessary, viz.: “ The trustees of a religious corporation, organized under the act of 1813 (chap. 60, Laws of 1813), as amended in 1863 (chap. 45, Laws of 1863), have no separate or individual authority to bind the corporation, and this, although a majority, or the whole number acting singly, assent to the particular transaction; only when acting as a board, can they make or authorize acts binding on the corporation.

“ Proof that a promissory note, purporting to be made by a religious corporation, was signed by its president and secretary, does not show that it is the note of the corporation, without proof that it was made by its authority. An agency can neither be created nor proved by the acts or declarations of the assumed agent alone.

“ In an action against a corporation, the presumption that its officers have done their duty, does not stand for proof of authority, in a matter outside of their official duties, and where special authority must have been conferred to justify the act.

The referee has found, upon abundant evidence for that purpose, that the account between the plaintiff and B. Duncan Sniffen, treasurer of the defendant, was not opened with the consent, knowledge or authority of the defendant or its board of trustees, and that defendant had no knowledge or connection with the Wyckoff, the Weed or the note in suit, and that none of them, or the transactions with which those notes were used, have been ratified by the defendant, and that they were personal transactions between Sniffen and the cashier of the plaintiff and Wyckoff and Weed. These were affirmative findings, based upon the evidence introduced upon the trial.

It would have been quite sufficient for the defense to the action, that the plaintiff was bound to show that the defendant- authorized the acts of Sniffen, out of which the alleged liability arose. This case is so obviously and unmistakably like the case of the People's Bank v. St. Anthony's Catholic Church, that further discussion would prove but a waste of time.

p. 919

That case was upon an obligation to repay money borrowed by the defendant evidenced by the signatures respectively of its president, secretary and treasurer and pastor.

The defendant in that case, upon an examination of the plaintiff’s witnesses, proved that the signatures, though really made by its officers, were made while acting separately. and not at the same time or place, or while assembled as a board of trustees.

It was sought in that case, as in this, to sustain the action upon the powers presumptively incidental even to religious corporations to borrow money for the promotion of its objects. But the court declined to sustain the action upon that ground, so common and well known, and said : “We think the case is with the defendant on a much plainer ground, and that is, that the plaintiff failed to establish or to give evidence which raised a presumption that the notes in question were the authorized obligations of the defendant.”

We think it not improper to remark in this connection that the sentence quoted and other remarks in the opinion in that case, furnish a complete answer .to the ingenious argument of the appellant’s counsel, that the plaintiff in this case showed an apparent authority in its treasurer, Sniffen, to endorse strange notes and procure their discount and to use their proceeds personally, which was available to give the plaintiff the right to go to the jury upon the question of actual authority, or to estop the defendant from proving a want of such authority. In regard to the exception to the evidence of the declarations of the plaintiff’s cashier and the purpose for which the note in question was discounted, as testified to by the witness Ferris, it is sufficient to remark that if we were of the opinion that such evidence was improper, it had no influence in determining the non-liability of the defendant in this action.

We think the judgment should be affirmed, with costs.

All concur, except Bradley and Haight, JJ., not voting.