Case Name: Owego Gas Light Company, Appellant, v. William D. Boyer, Respondent
Court: New York Supreme Court, Appellate Division
Jurisdiction: New York
Decision Date: 1906-01-08
Citations: 111 A.D. 140
Docket Number: 
Parties: Owego Gas Light Company, Appellant, v. William D. Boyer, Respondent.
Judges: 
Reporter: Appellate Division Reports
Volume: 111
Pages: 140–142

Head Matter:
Owego Gas Light Company, Appellant, v. William D. Boyer, Respondent.
Third Department,
January 8, 1906.
Corporate bonds—when president > of corporation , has sufficiently accounted for bonds received-for sale — delivery of bonds to other officer for sale.
When a corporation by resolution authorizes an issue of bonds tó he sold for the benefit of the corporation, and does not specify which officers are to sell them, the president of such corporation who has received the bonds for sale and has turned over some of them to the vice-president to .sell, is not accountable" to the. corporation for the bonds so turned over, in the absence of proof of negligence or collusion against the interests of the corporation in so doing.
Such president has sufficiently accounted for said bonds by showing that he turned them over to the vice-president for sale. . •
Appeal by the plaintiff, the. Owego Gas- Light C'onrpany, from á judgment of the -Supreme Court in favor of the pláintiff, entered in the office of the clerk of the county of Tioga on the 15th day of March, 1905, upon the decision -of the court, rendered- after a trial at the Tioga Special Term. - .
George S. Sheppard, for the appellant.
H. Austin Clark, for the respondent.

Opinion:
Kellogg, J.:
"The1 defendant was -the president.of" the plaintiff's corporation, and by resolution of its board of directors duly passed, reciting that i-t 'was: indebted to various ^persons aggregating about $14,000, and that it 'desired to pay such indebtedness and to increase and' improve its plant and" extend its business, and for the purpose of raising funds for those purposes^ it- was resolved that the corporation issue and sell its boiids, aggregating $50,000, to be secured by mortgage upon its plant, and the president and treasurer were empowered and directed to execute the same and to: affix the -corporate seal thereto. And- it was also resolved that -the balance of the stock .unissued, viz., $12,700, be issued and disposed of for the benefit of the corporation. The certificate of. stock and the bonds were duly executed by the proper officers. " The stock certificate was made out in the name of the treasurer to be held, and it does not appear that it ever has been issued, sold or transferred. It is now in the plaintiffs hands canceled, and there is nothing to show that any other certificate was ever issued in place of it. The defendant never had it, or any benefit from it.
After the bonds were duly executed the treasurer sent them to thé defendant who resided at Scranton, Penn., and he sold $25,000 par value of them at a discount, and accounted for the proceeds thereof, except $2,000 which he reserved for his services with reference thereto, which.sum is charged against him by the judgment appealed from, and no appeal has been taken from the judgment in that respect. The other $25,000 of bonds he turned over to the vice-president of said company to be sold for the company, such vice-president being also the active superintendent of construction and repairs, having in charge the work of increasing and improving the plant of the company. The vice-president delivered $3,000 of the' bonds to the treasurer to' be sold by him, and sold the balance of the bonds and turned over $6,850 of the proceeds'to the treasurer, and he expended other sums upon the. property, the amount. and details of which do not appear.' - The appellant complains of the judgment for the reason that it did not charge upon the defendant the duty of accounting for the proceeds of the bonds sold by the vice-president and charge him with the same. It does not appear what duties the by-laws of the company charged upon the various officers. The treasurer was the financial officer, and undoubtedly the vice-president was charged with the duty of assisting the president and ¡lerfonnyig any duties devolved upon the president in • his absence1. The resolution under which the bonds were issued directed their issue and sale and that the president and» treasurer execute them. While it does not state who is to sell them, it is evident that some of the officers must perform that duty. Clearly neither the stockholders nor the board of directors were expected to make a sale of the bonds; it must be done by some one, and it is not apparent that this duty fell more directly upon any one than upon the president and by his direction the vice-president, especially after the financial officer had turned, the bands over to the president for sale. It was not improper or a breach1 of trust for the treasurer to turn the bonds over to the president for sale, and the president having received the bonds out of the State, and being .out of the State and unable as he felt to dispose of all of them advantageously, violated no duty in requiring the vice-president to perforin the act of selling some of the bonds. There is no charge that it was a negligent or improper act to turn them over to the vice-president, or that the - vice-president has made any, improper use of them, or that the company has. not in fact had the benefit of them, so there is no claim that the bonds were negligently and collnsively turned over- to the vice-president against the real interests of the company; assuming; as the evidence shows, that the president acted in good faith in. turning the bonds over to the- viee:president for sale, he being the,_ party superintending and carrying on-the improvements and Repairs for which the bonds were..authorizedj the defendant has sufficiently accounted for the bonds and is not called upon further to account for .the proceeds received by the vice-president. The judgment is affirmed, with costs. ' -
Judgment unanimously affirmed, with costs.