Cent. Nat. Bank of City of New York v. White

• Decision Date: 17 October 1893
• Citation: 34 N.E. 1065,139 N.Y. 631
• Parties: CENTRAL NAT. BANK OF CITY OF NEW YORK v. WHITE et al.
• Court: New York Court of Appeals Court of Appeals

139 N.Y. 631

34 N.E. 1065

CENTRAL NAT. BANK OF CITY OF NEW YORK

v.WHITE et al.

Court of Appeals of New York.

Oct. 17, 1893.

Appeal from superior court of New York city, general term.

Action by the Central National Bank of the city of New York against Leonard D. White, Frederick White, and Charles O. Morris. From a judgment of the general term (19 N. Y. Supp. 820) affirming a judgment of the special term in favor of defendants, plaintiff appeals. Affirmed.

Martin & Smith,(George A. Strong, of counsel,) for appellant.

Edwards & Odell, (Walter Edwards, of counsel,) for respondents.

FINCH, J.

The learned counsel for the appellant states the question of fact involved in this case, and which he claims has become a question of law, in these words, viz.: ‘Did defendants know that Sanford was using cashier's checks in his private transactions, or had they a right to believe that the transactions were for the bank?’ Of course, this inquiry is primarily a question of fact, upon which the finding of the referee against the plaintiff is beyond our review, unless it proves to have been made without any evidence tending to its support. The appellant, therefore, has undertaken the difficult task of demonstrating that there is no such evidence, so that the finding of the referee is an error of law for which we may reverse the judgment rendered. The learned counsel who took upon themselves this difficult duty do not at all disguise their consciousness of its character, but have made the effort with great care and ability, with a close analysis of the facts, and with a confidence that we on our part will examine the whole testimony, and patiently consider the argument founded upon it, before coming to a final conclusion. We have endeavored to do so, and have carefully studied the confused and somewhat singular accounts of the defendants, upon the form of which the plaintiff mainly relies. The defendants testify positively that they never knew or suspected that Sanford was dealing for himself, but always supposed and believed that the whole current of the account was with the plaintiff bank, through Sanford as its agent and representative. This evidence tends to raise an issue of fact, but is met by a reference to the admissions of the defendants that they personally conducted none of the dealings; that they had never examined the accounts until after Sanford absconded, and did not know the form in which they appeared upon their own books; and, therefore, that their clerks who conducted the dealings may have known that Sanford was acting for himself, in which event the defendants would be chargeable with their knowledge. But it is admitted that in the beginning of the transactions Sanford was acting for the bank, and it is not at all certain that the change which gradually marked the character of the account was such as to involve a necessary knowledge, either on the part of defendants or their subordinates, of a change in the principal with whom they were dealing. While it is true that the bank could not lawfully speculate for itself, and risk capital and deposits in that sort of stock gambling which ruins so many both in character and fortune, yet it is equally true that its customers could do so if they pleased, and it was possible to believe that they bought upon margins through the agency of the bank, without a disclosure of their names, and that the defendants assumed and believed such to be the fact is an inference more or less supported by two considerations. If they believed or suspected that Sanford was using the money of the bank upon his own personal ventures, they knew him to be morally, if not legally, a thief, and consciously aided and abetted him in his deliberate and persistent robbery of those who trusted him, and we should not charge upon the defendants so grave a wrong unless upon evidence not capable of any other reasonable explanation. And, again, there is an item of proof which quite plainly indicates what the understanding of the brokers was. It is the letter of June 26, 1869, addressed to Sanford without...