Opinion
April, 1928.
Judgment reversed upon the law and the facts, with costs, and judgment directed for plaintiff, with costs. A check, intrusted by plaintiff to its treasurer and secretary of its board of trustees for deposit, was cashed and part of the proceeds converted by said trustee under circumstances which rendered the defendant liable upon the theory that one who accepts checks payable to a corporation, which can act only by agents, does so at his peril and must abide by the consequences if the agent who indorses the same is without authority, unless the corporation is negligent or is otherwise precluded by its conduct from setting up such lack of authority in the agent. ( Wagner Trading Co. v. B.P. Nat. Bank, 228 N.Y. 37.) While the learned trial court properly determined the question of the legal liability of defendant upon the cashing of the check, it held that plaintiff failed to prove that the improper payment by defendant caused it to sustain any loss. We are of opinion that the proof not only shows affirmatively that the money converted was not returned or applied to the uses of plaintiff, but that the trustee kept the money for himself. Findings of fact and conclusions of law inconsistent with this determination are reversed and new findings and appropriate conclusions will be made. Lazansky, P.J., Rich, Young, Hagarty and Carswell, JJ., concur. Settle order on notice.