By the Court,
Hogeboom, J.
I. I think this judgment not maintainable on the ground taken by the referee.
(1.) Because it appears to be put upon a ground not presented in the pleadings or proceedings, nor taken on the trial, to wit: the omission of the defendant to inquire of the Hew York brokers as to the balance in their hands.
The complaint is for malfeasance, and the count adapted to the branch-of the case on which the plaintiff was permitted to recover, is the second, which charges the defendant with surrendering to-Wilson eighty-two bonds held by the bank for which he received only $70,000 and they lost $14,000. The proof seems to have been directed to that issue, and so far as we can reasonably infer, the case was tried on that issue. There may be evidence not produced bearing on this question of omission of duty, and if the plaintiffs sought to recover on that ground they should have amended their complaint; or at least have disclosed their intention before the trial closed.
[20]*20Assuming that the issue was properly presented, I am unable to see such proof of loss or damage as entitled the plaintiffs to recover. The referee proceeds on the assumption that the bank owned these bonds, and that the defendant as its agent passed them to Seyton & Wainwright by a valid transaction. If so, as Seyton <& Wainwright are and always have been perfectly responsible, I do not see any damage-which. has occurred from the defendant’s neglect (if it be such.) At least it seems to me, upon such strong probability of. recovering the unpaid amount by suit against Seyton & Wainwright, the bank should have first endeavored to collect of Seyton & Wainwright before attempting to hold the defendant for breach of official duty.
II. It is said there is a manifest right to recover this deficit of $14,000 of the defendant on the facts as presented, and the plaintiffs should not be turned out of court because the referee may have rendered a wrong reason for a right result.
(1.) But I do not see that the case is plain. No doubt here is an unpaid sum of $14,000 (more or less ;) but the right to recover it of the defendant depends upon his wisappropriation or conversion, or wrongful disposition of the bonds, and his thus putting them out of the power of the bank. This is the very point in controversy; whether the bonds in the hands of Seyton & Wainwright were the bonds of the bank transferred or delivered to Seyton & Wainwright by the defendant as cashier in the line of his duty, or by an act which the bank has adopted and by which it is therefore bound ; or whether the defendant procured them or allowed .Wilson to procure and appropriate them by an illegal and improper overdraft, or, having possession of them as the bank’s cashier, disposed of them to Wilson so as to deprive the bank of them or of the means of recovering their amount of Seyton & Wainwright. If the latter be the indisputable inference from the facts, then (if the question of pleading were out of the way,) perhaps the judgment should be affirmed, notwithstanding the referee has put the right of [21]*21recovery upon a wrong ground. But if the former be the true aspect of the case, or if it be doubtful on the evidence which is the true state of the case, then—inasmuch as this court ought not to affirm on a different ground from that taken by the referee, except upon the most convincing proof— our true course is to reverse the judgment and grant a new trial, in order to have the facts properly found.
III. Now it is undeniable that there are several important facts tending to the conclusion that these bonds were the property of the bank, (and not Wilson’s, procured through an overdraft) and that Ten Eyck disposed of or delivered them to Seyton & Wainwright in the line of Ms duty, or in the due course of his official action, or by an act which the bank adopted.
(I.) Ten Eyck, it is true, allowed Wilson témporarily to overdraw his account $93,000. This was apparently done for not a dishonest purpose, but simply to get the bonds out of the hands of the comptroller into the hands of the bank.
But conceding this to be an act of negligence, it was immediately remedied (and within an hour) by the deposit of the bonds by Wilson in the bank. The bonds were then the property of the bank and in the possession of the bank. No loss, whatever, up to this time occurred. The bonds were equal in value to the loan to Wilson or his check. At all events, if they were Wilson’s bonds, they were lawfully held by the bank as security for the loan, and could not be got by Wilson without paying the debt. The bank had a special property in them, at least.
(2.) Then about $10,000 of them-were sold, either by Ten Eyck or by Wilson, (it must be presumed under the direction of the defendant or the bank,) and the proceéds paid to the bank. It would be difficult, after this, for the bank to deny that it held the bonds, either as its own or as having a special property in them.
(3.) The bank received $70,000 more upon these bonds by the draft on Seyton & Wainwright, or the proceeds of their [22]*22sale by Seyton & Wainwright, thus further adopting the act of the defendant, even if he had not disposed of them in the strict line of his duty.
It is said, I know, that all this was the act of the cashier,' and that the bank did not know of these transactions till long after—after the death of Wilson, 3d July, 1861. But it got the benefit of these sales of the bonds, and has never repudiated them. And one question is, whether it can now disavow the transaction.
Another question is, whether Ten Eyck did not do these acts (in regard to the loan to Wilson and the disposition of these bonds to Seyton & Wainwright) in the line of his duty, or in the discharge of his office as cashier, and, therefore, whether his acts are not the acts of the hank ?.
■ Can we say he had not the official right to make the loan to Wilson, or to send the bonds to Seyton & Wainwright? Here the question is, not whether he ought to have done so, but whether the bank was bound by his acts ? We have no proof that the board of directors usually did this business, or limited his powers, or undertook to control him ; or that Ten Eyck was not, (after Schoolcraft’s death,) in effect, the bank, making the loans and discounts, and managing the affairs of the bank. We cannot, that I know of, presume the act to be illegal, though we may know or suppose there was a board of directors. If or can we, that I know of, properly charge Wilson, or Seyton & Wainwright, with knowledge of the illegality or unauthorized character of the acts of Ten Eyck, (if they had that character.)
My impression is, that these acts were the acts of the corporation, and, at least, that they adopted them, and were, therefore, bound by them.
(4.) Then comes the transaction of sending the bonds to Seyton & Wainwright. True, Seyton & Wainwright were advised of their being sent, by a letter from Wilson, but that letter was first submitted
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By the Court,
Hogeboom, J.
I. I think this judgment not maintainable on the ground taken by the referee.
(1.) Because it appears to be put upon a ground not presented in the pleadings or proceedings, nor taken on the trial, to wit: the omission of the defendant to inquire of the Hew York brokers as to the balance in their hands.
The complaint is for malfeasance, and the count adapted to the branch-of the case on which the plaintiff was permitted to recover, is the second, which charges the defendant with surrendering to-Wilson eighty-two bonds held by the bank for which he received only $70,000 and they lost $14,000. The proof seems to have been directed to that issue, and so far as we can reasonably infer, the case was tried on that issue. There may be evidence not produced bearing on this question of omission of duty, and if the plaintiffs sought to recover on that ground they should have amended their complaint; or at least have disclosed their intention before the trial closed.
[20]*20Assuming that the issue was properly presented, I am unable to see such proof of loss or damage as entitled the plaintiffs to recover. The referee proceeds on the assumption that the bank owned these bonds, and that the defendant as its agent passed them to Seyton & Wainwright by a valid transaction. If so, as Seyton <& Wainwright are and always have been perfectly responsible, I do not see any damage-which. has occurred from the defendant’s neglect (if it be such.) At least it seems to me, upon such strong probability of. recovering the unpaid amount by suit against Seyton & Wainwright, the bank should have first endeavored to collect of Seyton & Wainwright before attempting to hold the defendant for breach of official duty.
II. It is said there is a manifest right to recover this deficit of $14,000 of the defendant on the facts as presented, and the plaintiffs should not be turned out of court because the referee may have rendered a wrong reason for a right result.
(1.) But I do not see that the case is plain. No doubt here is an unpaid sum of $14,000 (more or less ;) but the right to recover it of the defendant depends upon his wisappropriation or conversion, or wrongful disposition of the bonds, and his thus putting them out of the power of the bank. This is the very point in controversy; whether the bonds in the hands of Seyton & Wainwright were the bonds of the bank transferred or delivered to Seyton & Wainwright by the defendant as cashier in the line of his duty, or by an act which the bank has adopted and by which it is therefore bound ; or whether the defendant procured them or allowed .Wilson to procure and appropriate them by an illegal and improper overdraft, or, having possession of them as the bank’s cashier, disposed of them to Wilson so as to deprive the bank of them or of the means of recovering their amount of Seyton & Wainwright. If the latter be the indisputable inference from the facts, then (if the question of pleading were out of the way,) perhaps the judgment should be affirmed, notwithstanding the referee has put the right of [21]*21recovery upon a wrong ground. But if the former be the true aspect of the case, or if it be doubtful on the evidence which is the true state of the case, then—inasmuch as this court ought not to affirm on a different ground from that taken by the referee, except upon the most convincing proof— our true course is to reverse the judgment and grant a new trial, in order to have the facts properly found.
III. Now it is undeniable that there are several important facts tending to the conclusion that these bonds were the property of the bank, (and not Wilson’s, procured through an overdraft) and that Ten Eyck disposed of or delivered them to Seyton & Wainwright in the line of Ms duty, or in the due course of his official action, or by an act which the bank adopted.
(I.) Ten Eyck, it is true, allowed Wilson témporarily to overdraw his account $93,000. This was apparently done for not a dishonest purpose, but simply to get the bonds out of the hands of the comptroller into the hands of the bank.
But conceding this to be an act of negligence, it was immediately remedied (and within an hour) by the deposit of the bonds by Wilson in the bank. The bonds were then the property of the bank and in the possession of the bank. No loss, whatever, up to this time occurred. The bonds were equal in value to the loan to Wilson or his check. At all events, if they were Wilson’s bonds, they were lawfully held by the bank as security for the loan, and could not be got by Wilson without paying the debt. The bank had a special property in them, at least.
(2.) Then about $10,000 of them-were sold, either by Ten Eyck or by Wilson, (it must be presumed under the direction of the defendant or the bank,) and the proceéds paid to the bank. It would be difficult, after this, for the bank to deny that it held the bonds, either as its own or as having a special property in them.
(3.) The bank received $70,000 more upon these bonds by the draft on Seyton & Wainwright, or the proceeds of their [22]*22sale by Seyton & Wainwright, thus further adopting the act of the defendant, even if he had not disposed of them in the strict line of his duty.
It is said, I know, that all this was the act of the cashier,' and that the bank did not know of these transactions till long after—after the death of Wilson, 3d July, 1861. But it got the benefit of these sales of the bonds, and has never repudiated them. And one question is, whether it can now disavow the transaction.
Another question is, whether Ten Eyck did not do these acts (in regard to the loan to Wilson and the disposition of these bonds to Seyton & Wainwright) in the line of his duty, or in the discharge of his office as cashier, and, therefore, whether his acts are not the acts of the hank ?.
■ Can we say he had not the official right to make the loan to Wilson, or to send the bonds to Seyton & Wainwright? Here the question is, not whether he ought to have done so, but whether the bank was bound by his acts ? We have no proof that the board of directors usually did this business, or limited his powers, or undertook to control him ; or that Ten Eyck was not, (after Schoolcraft’s death,) in effect, the bank, making the loans and discounts, and managing the affairs of the bank. We cannot, that I know of, presume the act to be illegal, though we may know or suppose there was a board of directors. If or can we, that I know of, properly charge Wilson, or Seyton & Wainwright, with knowledge of the illegality or unauthorized character of the acts of Ten Eyck, (if they had that character.)
My impression is, that these acts were the acts of the corporation, and, at least, that they adopted them, and were, therefore, bound by them.
(4.) Then comes the transaction of sending the bonds to Seyton & Wainwright. True, Seyton & Wainwright were advised of their being sent, by a letter from Wilson, but that letter was first submitted to the cashier, and he (Wilson) advised Seyton & Wainwright that he had given the defend[23]*23ant, as cashier, (and the proof and presumptions are abundant that they knew the .cashier of the Commercial Bank,) a sight draft on them for $70,000,) that they might sell the bonds, and must hold the surplus, after reimbursing themselves the amount of the $70,000 draft, subject to the order of Ten Eyck. Accompanying this letter, or rather . sent by express at the same time, was the package of these bonds, sent by the cashier, marked “82,000, from Commercial Bank, Albany,” sealed with the seal of the bank, and which had on it the name of the bank. This package was received by Seyton & Wainwright, and the $70,000 draft paid. Can there be a doubt, on these facts, that Seyton & Wainwright knew they were to account, and would be bound to account to the Commercial Bank for this surplus, and would be liable to the bank if they paid over this surplus to Wilson without the order of Ten Eyck, (which was never given.) True, they undertook, afterwards, to apply this surplus to Wilson’s account, 1st, to meet an account of about $5000, for which he was to provide them other securities, and which they advanced to him on such a promise; and 2d, to meet a deficit on some stock transactions which they claimed that he owed them. But I think this could not stand a moment against the claim of the bank, made under the circumstances above stated.
(5.) Further than this, the bank has claimed these bonds as theirs, in the complaint, and the referee has found the fact to be that they belonged to the bank.
IV. Therefore, if we assume the facts, to be as found by the referee, the plaintiffs ought not to succeed on the ground taken by the referee. And if we take any other ground, we have not a state- of facts proven with sufficient distinctness to justify an affirmance of the judgment. It seems to me, therefore, necessary to reverse the judgment, and award a new trial.
V. In that event, the plaintiffs desire a consideration of the question and a determination of the appeal in regard to [24]*24the liability of the defendant on the $14,000 loan to Wilson, not wishing a new trial on this ground, if, for other reasons, the judgment can be affirmed.
[Albany Genebal Teem,
December 4, 1865.
If it is to be reversed for reasons already given, I do not deem it necessary to determine the questions arising on the plaintiffs’ appeal; for it is not claimed that a determination of these questions in favor of the plaintiffs would enable us to affirm . the judgment, or prevent a new trial, if we are against the plaintiffs on the other questions in the case. Some of these questions are important, and, to some extent, perplexing, and as they are not necessary to be now decided, and the facts may be changed on a new trial, I do not enter upon their examination. '
VI. Hor is it necessary to discuss the various questions of evidence, findings of fact and of law, and refusals to find, motions for nonsuit, and other questions which the defendant makes in the case.
The judgment should be reversed, and a new trial granted, with costs to abide the event.
Eogeloom, Peclcliam and Miller, Justices,]