Court Opinion

ID: 8008377
Source: CourtListenerOpinion
Date Created: 2022-09-09 01:55:32.221751+00
Date Added: 2024-06-11T16:35:58.332387
License: Public Domain

IIenky, C. J.,
Dissenting. — There is no evidence tending to prove that the bank’s books were not kept correctly by the book-keeper, precisely as they had been kept ever since the organization of the company, except in one item, wherein the book-keeper took credit to himself twice for the same amount, about five hundred dollars. The evidence proved, and so the referee found, that an examination of these books at any time would have disclosed .the true condition of the bank, except as to the above item. The book in which individual deposit accounts were kept would not have shown the overdrafts made, either by the book-keeper or other customers of the bank, but other books kept by him in connection with that, would, and this was the system of book-keeping adopted and sanctioned by the bank,, and there was no breach of his bond in thus keeping the books, although not the most approved method.
There is no pretense that the book-keeper ever used any money belonging to the bank, except such as he obtained by means of overdrafts, and that he was habitually overdrawing his account was known and consented to by the cashier. True, he says he did not consent to it, but, knowing it, and it being his duty, and in his power to ■stop it, he is to be taken to have acquiesced and consented to the overdrafts, made by the book-keeper, and the bank is as much bound by it as if the cashier, standing in its stead, and as to such transactions to be regarded as the bank itself, had been expressly authorized by the board of directors to allow such overdrafts to be made by the book-keeper.
Nor does it help plaintiff’s case that the cashier, aware that the book-keeper was making over-drafts, did not know the extent to which he was overdrawing his account. He could easily have ascertained, and, therefore, tacitly consented to any amount of overdraft he *275might make. The book-keeper, as to those transactions, was a customer of the bank. By its acquiescence he became its debtor, and it subsequently accepted and enforced a deed of trust executed by the book-keeper to ■secure the indebtedness thus contracted, and cannot hold his securities as for an embezzlement by the book-keeper ■of the amount of such indebtedness. DeColyar on Securities, 434, and cases cited. The obligation of the securities was to the bank, which had the right to permit their principal to overdraw his account, and thus become "the debtor of the bank, but it cannot hold his securities for the failure of their principal to pay money so borrowed. They did not undertake as his securities for money borrowed by him, and even conceding that the bond is as broad as claimed, and bound the securities for thefts or embezzlements committed by their principal, the evidence establishes against the book-keeper no element of theft or embezzlement, but only that, with the consent of the cashier, he borrowed money from the bank.
The referee found that the bond obligated Riley to refrain from taking any money from said company, not due him. If this means that he obligated himself not to steal or embezzle the money of the bank, it may be conceded that the bond has that effect, but if it is meant by that finding that he obligated himself never, even with the consent of the bank, to overdraw his account or otherwise borrow money of the bank, there is nothing in the bond to warrant the finding. The cashier of a bank is the agent of the corporation. Bissell v. First National Bank, 69 Pa. St. 419; Caldwell v. The National Mohawk Valley Bank, 64 Barb. 333. “The bank will also be bound by the acts of the cashier, if the directors, either through inattention, or otherwise, suffer the cashier to pursue a particular line of conduct for a considerable period, without objection.” lb. “He is the general manager, and unless his operations are re*276stricted by the directors, he is, for many purposes,, looked upon by the law, and is treated as if he was, the whole body, whom he has power to bind, even by his tortious act.” Grant on Banking, 518. “The cashier is the financial officer of the bank, and his agreements in behalf of his principal, in all matters relating to its business of discounting and banking are binding upon it, to the same extent as if made by a resolution of the-board of directors.” Wakefield Bank v. Truesdell, 55 Barb. 603. Directors will not be heard to say that they were ignorant of facts, “the existence of which is shown by the ledgers, books, accounts, correspondence, etc., of the bank, and which would have come to their knowledge but for gross neglect or inattention.” United Society of Shakers v. Underwood et al., 9 Bush. 611. De Colyar, in his work on Guaranties and Principal and Surety, at page 434, says : “It also appears that where one gives security for the conduct of another in a certain office, which brings him in contact with other persons also in the office, he has a right to expect that these persons will, in all things affecting the surety, conduct themselves according to law and discharge their duties.” This is the precise language of Lord Brougham in Mactaggart v. Watson, 3 C. & F. 525.
The same doctrine is recognized in Meir v. Hardie, 5. Shaw & Dunlop, 346, and in the People v. Janson, 7 Johns. 332, it is said: “The security had a right to look to the provisions of this statute, and to calculate his liability on the presumption that the duties enjoined on these public officers would be faithfully and punctually discharged. * * * There can be no doubt that the plaintiffs are chargeable with the consequences of the neglect, or breach of duty of their agents or public officers intrusted with this business.”
The book-keeper in the case at bar, as to those overdrafts, stood as a debtor to the bank, the same as the •numerous other depositors • with the bank, whose ac*277counts were overdrawn. Can it make any difference that, instead of using a formal check, he drew the money on tickets, which, though not in form, were in substance checks, and this with the knowledge and acquiescence of the cashier ?
I think that the judgment should be reversed and . the cause remanded, or that a judgment should be entered in this court for the sum for which the bookkeeper twice took credit to himself, with interest from the date of that transaction.