Reynoldsville Water Co. v. Farmers' & Miners' Trust Co.

Citations

• 257 Pa. 341
• 101 A. 800
• 1917 Pa. LEXIS 741

Syllabus

<p>Corporations — Executive officer — President—Trusts and trustees —Negligence—Delivery of bond — Embezzlement by president — Liability of trustee — Nonsuit.</p> <p>A corporate mortgage to secure the bond issue of a water company provided that the bonds should be executed by the president and secretary, should then be delivered to the mortgage trustee, a trust company, to be certified and afterward be returned to the treasurer of the water company. After execution of certain of the bonds by the president and secretary, the secretary, who was also the treasurer, at the suggestion of the president made out a receipt as treasurer for them and handed the bonds and receipt to the president. The president sent the receipt and bonds to the trust company for certification with directions to send the bonds to a certain bank for delivery to him. The trustee, relying upon the treasurer’s receipt, sent the bonds to the bank designated, and the president of the water company subsequently obtained possession of them and embezzled them. The water company brought an action against the trust company to recover the value of the bonds. The court entered a compulsory nonsuit which it subsequently refused to take off. Held, no error.</p>