Court Opinion

ID: 8192384
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:15:29.538942+00
Date Added: 2024-06-11T16:40:39.152100
License: Public Domain

Eschweiler, J.
The important question here is whether or not the court below should have permitted the jury’s finding that the conduct of defendant was not sufficient to warrant his discharge to control in the determination of this case.
'We think that under the facts herein as stated the court should have held as a matter of law that the discharge of defendant was justified because he breached his duty. The facts here much more than meet the requirements laid down in the case of Green v. Somers, 163 Wis. 96, 157 N. W. 529, namely, that where there is wilful and contumacious refusal by the servant to obey the lawful and reasonable commands óf the master there is a breach of duty justifying the discharge. This case of Green v. Somers evidently was not called to the attention of the trial court in disposing of this matter, and in his decision he laid much weight upon the case, of Schumaker v. Heinemann, 99 Wis. 251, 74 N. W. 785, as requiring a jury’s determination upon the question of whether or not such conduct justified a discharge. This earlier case does not meet or control the situation here.
The defendant as treasurer and director had control of the *553funds of tbe corporation for its benefit and in trust for it, not for bimself or any other officer or employee. As between.defendant and plaintiff tbe funds were impressed with a trust which he could not evade or avoid. Boyd v. Mut. F. Asso. 116 Wis. 155, 172, 90 N. W. 1086, 94 N. W. 171; Saranac & L. P. R. Co. v. Arnold, 167 N. Y. 368, 60 N. E. 647; Smith v. Baker, 101 Mich. 155, 59 N. W. 394; Miller v. Jones (Iowa) 159 N. W. 671.
It requires no lengthy dissertation to demonstrate as a legal and ethical proposition that where, as here, upon the undisputed facts and the verdict of the jury it appears that an officer or servant, against the express direction of his superior officer or master, converts to his own use funds of the-master, he has so breached the duties that he owes to his employer that his discharge is justified. Even were the element of express direction to abstain from such use of corporate funds lacking, still a wilful conversion by a servant of his master’s funds would justify his discharge.
The court below, therefore, should have granted plaintiff’s motion at the close of the trial for judgment in its favor for the amount shown to have been converted by defendant, that is, the $1,601.97. This would of necessity dismiss the defendant’s counterclaim 'for any alleged breach of contract’ by such discharge.
There is no need that express authority to commence such an action should be given by the board of directors to a president who is clothed by the charter or by-laws of the corporation with the management of every department of the company. Such authority may well be implied in the president of a corporation, especially under the circumstances of this case, where one who is a director and treasurer of the company must be sued and that one other of the four directors had himself overdrawn his account and had resigned as such director, as Ketter did. It would be an idle formality to insist that the board of directors should be convened to do by *554formal resolution that Avhicb would 'be and ought to be so evidently within the power of the head of such a corporation. 2 Thomp. Corp. (2d ed.) § 1433; Trustees of Smith Charities v. Connolly, 157 Mass. 272, 31 N. E. 1058; 10 Cyc. 904. Where, as here, such proceedings by the president were subsequently ratified at a meeting of the board of directors, the right to conduct and carry on such a suit by the direction of the president is beyond all question.
By the Court.- — On plaintiff’s appeal the judgment is modified by awarding plaintiff the sum of $1,601.97, together with interest from May 8, 1916, together with its costs and disbursements. Defendant takes nothing by his appeal.