Case Name: GEORGE MANLEY, et al., Appellants, v. GEORGE H. STAYNER, Respondent
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1885-06-19
Citations: 20 Jones & S. 537
Docket Number: 
Parties: GEORGE MANLEY, et al., Appellants, v. GEORGE H. STAYNER, Respondent.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 52
Pages: 537–540

Head Matter:
GEORGE MANLEY, et al., Appellants, v. GEORGE H. STAYNER, Respondent.
Liability of agent to party paying money for account of principal, for failure so to pay over.
Before Sedgwick, Oh. J., Freedman and Truax, JJ.
Decided June 19, 1885.
Appeal by plaintiffs from judgment dismissing the complaint upon the merits entered upon the report of a referee.
Action to recover the sum of $5,000, directed by the plaintiffs to be paid to the Plata Verde Silver Mining Company, on a purchase, directed and understood by the plaintiffs to have been made by the plaintiffs from that company, of certain shares of its treasury stock, which sum plaintiffs claimed the defendant omitted to pay to the company, and, therefore, in law, applied to his own use.
The referee’s opinion was as follows :—“ Hamilton Cole, Referee.—In the year 1880 the plaintiffs made, through one A. H. Lazare, a broker, certain inquiries concerning the Plata Verde Silver Mining Company, of Hiram P. Crosby, a director in said company. Lazare was informed, and communicated to plaintiffs the information obtained, that the company was capitalized at $10,000,000, that there were ten thousand shares of treasury stock as a working capital, of which eight thousand had been sold at $10 per share.
“The plaintiffs sent their check for $5,000 payable to George H. Stayner, treasurer, and received in return five hundred shares of the stock of the company. Manley testifies that he intended to purchase five hundred shares of the two thousand shares of stock left in the treasury, but it is doubtful whether such was the agreement in fact made with the company through Lazare. The check sent by plaintiffs was received by John E. Lowther, the secretary of the company, and was by him delivered to' the defendant. He indorsed the check as treasurer, and also individually, and deposited the same in his private bank account January 31, 1880. On February 4, 1880, he paid out the same, upon the request of John E. Lowther, secretary of the company, to Hilborn & Lawrence, upon their draft drawn upon said company. The claim of Hilborn & Lawrence was as follows : Eobinson & Junkin claimed to own the mine. The agreement between them and the defendant and his associates, was that Eobinson & Jun-kin were to sell Stayner and his associates three-fourths of the mine for $750,000. The mine owners wanted money, not stock. In order to make the stock full-paid stock, all of it was issued in exchange for the property,' then seventy-five thousand shares were set apart for Eobinson & Junkin for their interest in the mine, but this stock was put in the hands of John E. Lowther, trustee,' who was to sell the same for $10 per share, and pay proceeds to Eobinson & Junkin. Eobinson & Junkin guaranteed their title to the mine. Hilborn & Lawrence made claim upon it, which the company settled by agreement to pay $50,000, which was done. The $5,000 paid by Stayner, February 4, 1880, was a part of the $50,000 agreed to be paid by the company to Hilborn & Lawrence for the release of their claims upon the mine. And the five hundred shares of stock received by the plaintiffs were a portion of the seventy-five thousand shares held by Lowther as trustee, and originally set apart for Robinson & Junkin. Whatever may have been the arrangement made between Crosby and the plaintiffs in regard to the five hundred shares of stock taken by them, it is not claimed that any information in regard to such arrangement was communicated to the defendant. So far as he was concerned, he received a check as officer of the company, deposited it in his private account, and paid out the proceeds upon an obligation of the company, without notice of any kind that the check was for any particular purpose. The complaint proceeded upon the theory that Stayner had sold to the plaintiff his own stock. It is not claimed that this is established. Upon the facts proved, I do not see that any individual liability on the part of the defendant is made out.”

Opinion:
The Court at General Term, said :—"The findings of fact of the learned referee cannot be reversed, and the counsel for appellants does not claim that they should be. The result is that the judgment for defendant was not erroneous.
" The plaintiffs, through their agent, bought the shares in reality of Robinson & Junkin, although they may have intended to buy shares that belonged to the company, of the company. Accordingly, they did not pay the price of the shares to Robinson & Junkin or any agent of them, and did not intend to do that; but, believing that the company was the owner and seller, they drew a check to the defendant's order as treasurer, meaning that the payment of it over should be payment to the company. The referee has found that the defendant knew nothing of, and was not in any way connected with the sale to the plaintiffs. On such facts, it may be granted, that the defendant would be liable to an action if, when the check or its proceeds were in his possession, he refused to deliver either upon demand. The fact as found, is that some two years before demand, he had paid the proceeds of the check out for the use of the company, at the request of the secretary of the company. He was agent for the company. The money was paid to him only as agent, and after payment by him he was no longer hable. Under some circumstances, an action would not he against him personally, if he had not paid over, for acts which he did. only as agent (Calvin v. Holbrook, 2 N. Y. 126 ; Hall v. Lauderdale, 46 Ib. 70 ; Mowatt v. McLean, 1 Wend. 173 ; Duff v. Buchanan, 1 Paige, 453 ; Lafarge v. Kneeland, 7 Cow. 456 ; Costigan v. Newland, 12 Barb. 456).
Albert Stickney, for appellants.
M. W. Devine, for respondent.
" The most important fact as to the merits is that the defendant did pay the money out for the company, and in so doing complied with the request of plaintiffs. The appellants argue that before he made the payment which the referee finds to have been on account of the company, he had appropriated the check to his use by indorsing it as treasurer and then depositing it in his own bank account. The so-called appropriation was, on the facts, a means of keeping the money for the company's use."
Opinion by Sedgwick, Oh. J.; Freedman and Truax, JJ., concurred.
Judgment affirmed, with costs.