Court Opinion

ID: 3889193
Source: CourtListenerOpinion
Date Created: 2016-07-06 09:18:30.75062+00
Date Added: 2024-06-11T09:18:03.669528
License: Public Domain

I believe the judgment should be affirmed. The record is sufficient, in my opinion, to sustain the finding by the trial court that the trading conducted by Van Kirk for different individuals was not known or authorized by the corporation. Three of the directors knew nothing about Van Kirk making these trades for individuals, and each of the other directors knew of no other trade being made except his own. The director making the trade for himself, as an individual through Van Kirk, and knowing this was done in the name of the company, was acting adversely to the corporation, and the corporation should not be charged with knowledge on this account. The prevailing opinion states: "It further appears that confirmation slips of all the trades were mailed to the secretary." The record discloses that the secretary denies ever having received such confirmation slips. *Page 614 
An issue of fact was thus presented, and the findings of the court resolved the issues against the defendant.
The facts, in my opinion, do not bring this case within the rule announced in Porter v. Hallet  Carey Co., 40 S.D. 136, 166 N.W. 525. Van Kirk testified that the business of trading for individuals was not recorded in the company books, but that the record of these trades was kept in his own private book. Certainly a private book kept by Van Kirk would not be sufficient to charge the corporation with knowledge of the transactions therein contained. The Porter Case simply holds that it is the duty of the corporation to know what its book discloses. Applying this duty to this corporation, it would not charge it with knowledge of what Van Kirk's private book disclosed.
I am satisfied the record fairly justifies the findings of the trial court to the effect that the grain and money were intentionally taken by Van Kirk to pay for something for which the plaintiff company was not liable, and in my judgment this constitutes an embezzlement within the meaning of section 4227, Rev. Code 1919.
ROBERTS, P.J., concurs in this dissent.