On appeal from the Supreme Court.
For Charles D. Robbins & Company, Arthur T. Vanderbilt.
For the Passaic National Bank and Trust Company, Corbin & Harty.
The opinion of the court was delivered by
LLOYD, J. The plaintiffs constituted a firm of stock brokers in the city of New York, and had in their employ as manager
one George Bedell, who, in addition to his relation as manager, carried an individual trading account with the firm. He later became a member of the partnership.
In March, 1928, Bedell established banking relations with the defendant bank through its vice-president, opened accounts therein and received financial accommodation. Upon various statements to the plaintiff to the effect that the firm was indebted to the defendant bank, a series of checks were drawn by Robbins & Company to the order of the bank and delivered to the bank, as a rule by Bedell personally. The proceeds of the checks so drawn were at Bedell's direction credited to the account of Bedell or to the accounts of his nominees in the bank and later drawn out by him.
The plaintiffs on discovering what was taking place, demanded repayment of these funds by the bank, and failing to receive the same, brought this action to recover them. The trial resulted in a verdict and judgment in favor of the plaintiffs in the sum of $82,877.37. From the judgment so rendered both parties appeal.
The claim of the plaintiffs was for a much larger sum and it is for the refusal of the trial court to direct a verdict in their favor for that larger sum that their appeal is taken.
The grounds relied on for reversal in the bank's appeal are that the trial court should have controlled the case by nonsuit or by direction of a verdict in its favor; also that there was error in the rulings during the progress of the trial. Deeming that it will conduce to clearness to first consider the defendant's appeal, that branch of the case will be here taken up.
There can be no doubt that the checks drawn to the order of the bank were by it endorsed and the proceeds diverted to the personal use of Bedell, and thus became a misappropriation of funds belonging to the plaintiffs. The bank's contention on the trial and here is that there was an express, implied and apparent authority in Bedell to authorize the bank to make this application of the moneys so received, ...