First Department, February, 1906. [Vol. 111. for the purpose of concealing from the various banks in which the defendants were carrying their accounts, the transactions which they were having, and that at no time did said Frank have any note of Louis Kessel & Bro. or Kessel & Co. for said monies or any part thereof or any security for the payment thereof. * "44. * * That the said David Rothschild, as such temporary administrator of said Weissel* estate, deposited in the Bankers' Trust Co., pursuant to the order of the Surrogate's Court, monies belonging to said estate aggregating about $6,000, and without the order of the Surrogate's Court wrongfully withdrew from said account most of said monies and used them for the joint benefit of himself and his associates in the transactions hereinbefore set forth. "45. * * That each and all of the defendants were parties to said conspiracies and to said transactions and had knowledge thereof; and the said David Rothschild by his wrongful use of the assets of said Weissel* estate * * * and the other defendants by intermeddling with him as aforesaid became and were trustees * * * * de son tort and liable to the estate of the said William Weissel,* deceased, * * and the plaintiff by its subrogation * * * * is entitled to all the legal and equitable rights and remedies of said estate against said defendants, * * "Wherefore, the plaintiff demands judgment that the defendants and each of them account to the plaintiff for all moneys procured or obtained by them jointly and severally upon assets belonging to said Weissel* estate * * Carlisle J. Gleason, for the appellant. Henry White, for the respondent. INGRAHAM, J.: The learned judge at Special Term recognizing the extraordinary character of this action came to the conclusion that while he would be inclined in an action at law to apply the strict rules of pleading in an equity case of the extraordinary character of the case here presented, in view of the inherent difficulties necessarily involved in the presentation of the case, he deemed it a better and safer practice to remit the consideration of the questions presented upon App. Div.] First Department, February, 1906. the motion then before him to the deliberate action of the trial justice, before whom all the facts would be unfolded. I am inclined to think that he was right in so far as this applies to the allegations of the complaint which relate to the relations between the various defendants and which bore upon the scheme adopted by them resulting in the wrongs for which the plaintiff seeks to hold these defendants liable; but giving the plaintiff the full benefit of this conclusion, there are certain allegations of this complaint that can have no possible bearing upon the combination between these defendants or, if they have any relation at all, it would be an allegation of evidence to prove the general allegations of a conspiracy or combination between the defendants. Thus, the 8th paragraph of the complaint, alleging the organization of the Globe Security Company and the Equitable National Bank, seems to be of no possible relevancy. The 12th paragraph seems to be also irrelevant. At most the facts alleged might be proved as tending to establish the relations that existed between Rothschild and the appellant Frank, but are entirely out of place in a complaint. The same applies to paragraphs 12, 13, 16, 17, 18, 19 and 20. Paragraph 38 is also irrelevant. Paragraphs 39, 42 and 43, while irregular in form, contain some allegations of fact which may be relevant. I think it is improper to allege in a pleading the fact that Rothschild kept a ledger account of transactions with Frank in a small book which he designated as his private ledger, and what Frank did as a witness before a referee in another action and his testimony as to these books. While it is possible that some of these facts might be competent evidence upon the trial, they are improper in a pleading. My conclusion is that the order appealed from should be reversed, with ten dollars costs and disbursements of this appeal, and the motion granted to the extent of striking out paragraphs 8, 12, 13, 15, 16, 17, 18, 19, 20, 38, 39, 42 and 43, with ten dollars costs, the plaintiff to have leave to serve an amended complaint. O'BRIEN, P. J., MCLAUGHLIN, LAUGHLIN and CLARKE, JJ. concurred. Order reversed, with ten dollars costs and disbursements, and motion granted to the extent stated in opinion, with ten dollars costs, with leave to plaintiff to serve amended complaint. Third Department, January, 1906. [Vol. 111. OWEGO GAS LIGHT COMPANY, Appellant, v. WILLIAM D. BOYER, Respondent. Third Department, January 8, 1906. Corporate bonds - when president of corporation has sufficiently accounted for bonds received for sale- delivery of bonds to other officer for sale. When a corporation by resolution authorizes an issue of bonds to be sold for the benefit of the corporation, and does not specify which officers are to sell them, the president of such corporation who has received the bonds for sale and has turned over some of them to the vice-president to sell is not accountable to the corporation for the bonds so turned over, in the absence of proof of negligence or collusion against the interests of the corporation in so doing. Such president has sufficiently accounted for said bonds by showing that he turned them over to the vice-president for sale. APPEAL by the plaintiff, the Owego Gas Light Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Tioga on the 15th day of March, 1905, upon the decision of the court rendered after a trial at the Tioga Special Term. George S. Sheppard, for the appellant. H. Austin Clark, for the respondent. KELLOGG, J.: The defendant was the president of the plaintiff's corporation, and by resolution of its board of directors duly passed, reciting that it was indebted to various persons aggregating about $14,000, and that it desired to pay such indebtedness and to increase and improve its plant and extend its business, and for the purpose of raising funds for those purposes, it was resolved that the corporation issue. and sell its bonds, aggregating $50,000, to be secured by mortgage upon its plant, and the president and treasurer were empowered and directed to execute the same and to affix the corporate seal thereto. And it was also resolved that the balance of the stock unissued, viz., $12,700, be issued and disposed of for the benefit of the corporation. The certificate of stock and the bonds were duly executed by the proper officers. The stock certificate was made out App. Div.] Third Department, January, 1906. in the name of the treasurer to be held, and it does not appear that it ever has been issued, sold or transferred. It is now in the plaintiff's hands canceled, and there is nothing to show that any other certificate was ever issued in place of it. The defendant never had it, or any benefit from it. After the bonds were duly executed the treasurer sent them to the defendant who resided at Scranton, Penn., and he sold $25,000 par value of them at a discount, and accounted for the proceeds thereof, except $2,000 which he reserved for his services with reference thereto, which sum is charged against him by the judgment appealed from, and no appeal has been taken from the judgment in that respect. The other $25,000 of bonds he turned over to the vice-president of said company to be sold for the company, such vice-president being also the active superintendent of construction and repairs, having in charge the work of increasing and improving the plant of the company. The vice-president delivered $3,000 of the bonds to the treasurer to be sold by him, and sold the balance of the bonds and turned over $6,850 of the proceeds to the treasurer, and he expended other sums upon the property, the amount and details of which do not appear. The appellant complains of the judgment for the reason that it did not charge upon the defendant the duty of accounting for the proceeds of the bonds sold by the vice-president and charge him with the same. It does not appear what duties the by-laws of the company charged upon the various officers. The treasurer was the financial officer, and undoubtedly the vice-president was charged with the duty of assisting the president and performing any duties devolved upon the president in his absence. The resolution under which the bonds were issued directed their issue and sale and that the president and treasurer execute them. While it does not state who is to sell them, it is evident that some of the officers must perform that duty. Clearly neither the stockholders nor the board of directors were expected to make a sale of the bonds; it must be done by some one, and it is not apparent that this duty fell more directly upon any one than upon the president and by his direction the vicepresident, especially after the financial officer had turned the bands over to the president for sale. It was not improper or a breach of trust for the treasurer to turn the bonds over to the president for Second Department, January, 1906. [Vol. 111. sale, and the president having received the bonds out of the State, and being out of the State and unable as he felt to dispose of all of them advantageously, violated no duty in requiring the vicepresident to perform the act of selling some of the bonds. There is no charge that it was a negligent or improper act to turn them over to the vice-president, or that the vice-president has made any, improper use of them, or that the company has not in fact hrad the benefit of them, so there is no claim that the bonds were negligently and collusively turned over to the vice-president against the real interests of the company; assuming, as the evidence shows, that the president acted in good faith in turning the bonds over to the vice-president for sale, he being the party superintending and carrying on the improvements and repairs for which the bonds were authorized, the defendant has sufficiently accounted for the bonds and is not called upon further to account for the proceeds received by the vice-president. The judgment is affirmed, with costs. Judgment unanimously affirmed, with costs. CARL C. BERTHELSON, Appellant, v. JOHN C. GABLER, Respondent. Second Department, January 26, 1906. - Negligence-injury by fall of scaffold - Employers' Liability Act liability of master for servant exercising superintendence — continuing duty to keep structure safe — freedom from contributory negligence. When the evidence shows that the scaffold which fell and injured the plaintiff was originally constructed by the plaintiff and his fellow-servants in a safe manner, but became unsafe by reason of the removal of a supporting pier under the direction of a person in the service of the defendant exercising superintendence within the meaning of the Employers' Liability Act, a recovery by the plaintiff is not barred on the theory that the negligence is that of a fellowservant. Though the scaffold was originally safe, it was still the duty of the defendant to maintain it in such condition. The plaintiff is not guilty of negligence as a matter of law, although he heard an order given to take down the supporting pier, as he is entitled to assume that defendant will discharge his continuing duty to keep the scaffold safe, unless the omission to do so were obvious and actually known to the plaintiff. |