Hibernia Building Ass'n v. McGrath
Hibernia Building Ass'n v. McGrath
Opinion of the Court
Opinion by
This action was brought b3r appellee against appellant, who was its treasurer, to recover from him the amount of certain alleged payments made by him to the secretary of the appellee and embezzled by him. The ground of liability was negligence in making these payments, although made upon orders signed by the president and secretary, who also attested the signatures of the payees. The money was either paid in cash to the secretary or by cheques payable to his order. Under the by-laws the president was required to sign all orders drawn upon the
It is however contended that, as the bond provides that he shall discharge all the duties now required or may hereafter be required of him as treasurer by the constitution, charter,, bylaws, rules and regulations of said association, and as the board passed a resolution that all applications for withdrawals of stock must be approved by the board of directors at regular or special meetings of the association before payments are made, the appellant was guilty of negligence, without examining the minutes and without satisfying himself that the board had acted upon the withdrawals for which the orders in question purported to have been drawn. It is established by the proofs that no entries were made upon the minutes for application of withdrawals after 1884. In point of fact the secretary after this date kept no record in his minutes of any withdrawals. The luty of the president is to preside at all meetings of the board and to sign all orders for appropriations authorized by the board;. that of the secretary is to keep accurate minutes of all meetings of the board, the accounts of the association, and to attest all orders on the treasurer for appropriations of the board. These orders in question were signed by the president and were attested by the secretary in the usual form. The president was and is still regarded as an upright man, the secretary was also at this time so regarded, the association trusted both of them implicitly and had no reason or cause to doubt them. If it treated them thus, it was natural that the appellant should in no manner suspect or doubt them. These orders therefore came to him with the certificate of the presiding officer, whose duty it was to preside at all meetings, and with the attestation of the secretary, whose duty it was to keep all records of the meetings. If the appellant had gone to the secretary he would doubtless have been assured that the board had acted upon these withdrawals, and having been so advised he would have been justified in paying them. It can be scarcely said to be
It is however argued that the negligence o.f the appellant consisted in paying the amounts to the secretary and not to the payees named in the order. If these payments were unusual or exceptional there might possibly be some force in the suggestion ; but the business of building associations is not carried on with the exact precision of banks in regard to payments. It is uncontradicted that generally orders were paid sometimes at the association if the persons came there, but at other times, if not convenient to these persons to be present at the meeting, they would request the treasurer as a favor to pay them at the secretary’s office, and the appellant states that at times he went to the store of the secretary, saw him, and if orders were to be paid, paid them to him. It was thus usual and customary to pay the money to the secretary for the members. The reason of it was that the secretary, being the active manager of the association, came in constant contact with them, received money from them and paid money to them. It cannot be therefore said that there was negligence in paying the money under these orders to the secretary, with the signatures of the president, attested by the secretary.
In view of the good faith shown by the appellant and in view of the fact that the testimony in this case does not show negligence that would render him liable, the sixth assignment of error, “ That under all the evidence the verdict should be for defendant,” is sustained and the judgment is reversed.
Reference
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- Hibernia Building Association v. McGrath
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- Gratuitous mandatory — Negligence—Fraud. A gratuitous bailee or mandatory is liable only for fraud or for such gross negligence as amounts to fraud. Treasurer serving without compensation — Negligence. A treasurer or director of a corporation may become a gratuitous bailee and his official position and designation will not in any degree change his liability as such bailee. Building associations — Payments by treasurer — Negligence. Under the by-laws of a building association the president was required to sign all orders drawn upon the treasurer for appropriations made by the board, the secretary to keep accurate minutes, to attest all orders drawn on the treasurer for appropriations made by the board, the treasurer to pay all orders drawn on him by order of the board, if signed by the president and attested by the secretary. The treasurer served without pay, but gave a bond for the faithful performance of the duties of his office. All applications for withdrawals of stock were required to be approved by the board of directors. The secretary, however, kept no record of withdrawals. It was a usual and customary thing to pay money to the secretary for the members. Certain orders for withdrawals were signed by the president and attested by the secretary in the usual form, and paid in good faith by the treasurer to the secretary, who absconded with the money. Held that, under the circumstances of the case, there was not sufficient evidence of negligence on the part of the treasurer to submit to the jury.