Court Opinion

ID: 3552244
Source: CourtListenerOpinion
Date Created: 2016-07-05 23:04:32.566237+00
Date Added: 2024-06-11T13:38:34.260280
License: Public Domain

The plaintiff having amended his bill so as to make the court acquainted with the particular by-law relied upon as having been violated by the defendants, the court is now in a situation to take *Page 216 
notice of it; and although the charter is not regularly before the court, still it is so referred to that its terms are sufficiently ascertained, and this course appears not to be objected to by the defendants.
The by-law requires that the moneys of the corporation shall be kept and disbursed by the treasurer, who is required also to furnish a bond. The allegation in the bill is, that the funds, to a very large extent, are habitually kept in certain banks by the orders of the directors, and disbursed, not by the treasurer. It seems to be conceded that the funds are disbursed by an officer called a cashier, not known to the by-laws, and who does not furnish security. And I think it may be said to be substantially alleged and admitted by the demurrer that there is reason to believe that the safety of the funds of the corporation may be endangered by this practice.
On the question, therefore, whether this mode of keeping the funds is authorized by the by-laws, there would seem to be no doubt. And it seems equally certain that such a mode of keeping the funds shifts the responsibility to a great extent from the treasurer, who must be presumed to have furnished ample security, to others who have not.
Counsel for the defendants has, in his brief, mentioned a good many facts, which, if properly brought to the notice of the court, might be of some avail to explain the acts complained of, and, perhaps, to justify them. But they are facts of which the court cannot take judicial notice, and which do not appear upon the record.
What appears is, that the defendants are alleged to be dealing with the funds of the corporation in a manner not authorized by the by-laws, and in such a way as to shift the responsibility of the care of the funds from the officer recognized by the by-laws, to other persons not known to them. All this is admitted by the demurrer, and seems to me to be clearly unlawful. The complainant, who sues for himself and all other stockholders, appears to be largely interested, and it is difficult to see what protection he can have at present, excepting through the aid of an injunction. It is said that nobody else is complaining. If it be true that the stockholders are satisfied with this mode of doing the business, they may, perhaps, find some way to alter their by-laws so as to legalize the proceeding, though I confess it seems to me difficult to see how, under the charter, the business can be so legally transacted as to relieve the treasurer from the responsibility of the care of the funds.