THIRD DEPARTMENT, MARCH TERM, 1897.

The

App. Div.] held that the bond did not cover defaults after the first year. re-election was deemed a new appointment and not the appointment covered by the bond. In Welch v. Seymour (28 Conn. 387) the office was, by the constitution of the corporation, an annual one, and, therefore, it was held that the obligation of the bond given upon the first appointment did not extend beyond the first year.

In Amherst Bank v. Root (2 Metc. 522), under a statute which provided that a cashier should retain his place until removed therefrom or another should be appointed in his stead, a cashier was appointed in 1831 and gave bond for the faithful discharge of the duties of his office. In 1832 he was reappointed but gave no new bond. In 1836 and 1837 he was guilty of defaults and the bond was sued. It was held that the sureties were liable, although it appeared from the records of the directors that in 1831 and in 1832 he was appointed "for the year ensuing." It was said that the parties when the bond was made acted in contemplation of the law that made the office a continuing one; "that such an election is considered by the directors themselves as the continuance of an existing office, and not the commencement of a new one, is manifest from the fact that they require no new bonds." (See, also, Brandt on Sur. § 172.)

In Dedham Bank v. Chickering (3 Pick. 335) it was held that annual re-elections of a cashier for several years did not make the office an annual one, it not appearing to be such, either in the bond given by the cashier or in the charter, records or regulations of the bank, and, therefore, that the bond given by the cashier upon his first election for the faithful performance of his duties covered default made by him several years after his last election.

A similar view was taken in Elam v. Commercial Bank (86 Va. 92). In that case the cashier of the bank having resigned in April, 1873, Elam, the plaintiff in error, was elected in his place, and on the 10th of July, 1873, gave, with sureties, the bond on which the suit was brought. It was broad enough in its terms to cover a continuing liability. From that time to the suspension of the bank in August, 1883, Elam continued to hold the office of cashier, being annually re-elected, although he did not give any new bond. During all this period his sureties were directors. By the statute applicable the cashier held his office during the pleasure of the

THIRD DEPARTMENT, MARCH TERM, 1897.

[Vol. 15. board. It was held that the bond was not limited by the re-elections, but was a continuing obligation, and it was said: "And it seems patent, unless we are to charge these sureties, who were also directors, with a gross violation of duty in not demanding a new bond, that they must have construed the bond as continuing." (See Stevens v. Orton, 18 Misc. Rep. 538.)

The question comes down to this, did the parties intend to limit the operation of the bond to "the ensuing year." Upon this subject the force of the action of the board as entered in July, 1867, is to be considered in the light of their action in April, 1867, and in view of the existence of the by-law that made the appointment to the office to exist at the pleasure of the board. No intent is manifest to change the by-law, and the board under its rules had no right to summarily change it.

The by-law was the law of the corporation (1 Thomp. on Corp. 935), and, therefore, it may be said, within the rule of the Amherst Bank case, that there was no intention to make the office an annual

one.

The bond, though of the same date as the meeting in July, does not, in terms, refer to it.

The circumstance that at the end of the first year no new bond was required was deemed an important one in the Amherst Bank case. We have that circumstance here, and also the fact, as in the Elam case, that the sureties were themselves trustees, and the one here defending was vice-president and one of the executive officers of the corporation. Assuming he did his duty, there was a practical construction of the effect of the bond, that in this connection may be considered. (Woolsey v. Funke, 121 N. Y. 92.) It may be that he is not estopped from claiming that the bond was only for a year, but his action or failure to act on the subject of a renewal is of some significance in determining the question of what was the intention of the parties when the bond was given.

Placing ourselves in the position of the parties when the bond was given, can it be fairly said that it was the intention to limit its operation to the year ensuing? Was it not rather the intention, in making the bond itself unlimited, to make it operative as long as Ostrander, at the pleasure of the board, according to its rules, continued to perform the duties of treasurer?

App. Div.]

THIRD DEPARTMENT, MARCH TERM, 1897.

In view of the general appointment in April, 1867, and the resolutions then adopted fixing the salary and the amount of the bond, followed by the general statements in the bond itself, and the subsequent acts of the parties, I am of the opinion that, in the use of the words "for the ensuing year" in the proceedings in July, 1867, there was not any intention to override the by-law, but to continue an appointment already made, subject to the by-law. The bond was either given in pursuance of the resolution of April, 1867, or of the by-law which required a bond. If given in pursuance of the resolution, it would naturally refer to the appointment of that date, which was a general one. If given in pursuance of the by-law on the subject, it would naturally refer to such an office as the by-laws created. There was not, I think, any intention to restrict the bond to a year, and, therefore, it was, as its terms import, a continuing one, and would cover the default in question. It follows that the judgment should be reversed.

HERRICK, J., concurred.

Judgment affirmed, with costs.

THE ULSTER COUNTY SAVINGS INSTITUTION, Respondent, v. HORACE G. YOUNG, as Executor, etc., of THOMAS CORNELL, Deceased, Appellant, Impleaded with Others.

Bond-for faithful service “ during his continuance in office," even though he hold under successive appointments" the liability under it is continuous, although he holds over without reappointment.

An action was brought to recover upon a bond, given for the faithful performance by one Trumpbour of the duty of an assistant treasurer of a savings bank "during his continuance in office," at the end of which was added the following: It being understood that this bond is to be binding for all the time the said Matthew T. Trumpbour shall hold said office of assistant treasurer, even though he hold under successive appointments, but nothing herein shall prevent the sureties terminating their liabilities by giving at least two weeks' notice of an intention so to do." The bond was delivered in 1867, and the assistant treasurer was re-elected to the same position in 1868 and in 1869. He served thereafter, however, without further election until 1891, and between 1873 and 1887 abstracted moneys of the bank to recover which the present action was brought.

THIRD DEPARTMENT, MARCH TERM, 1897.

[Vol. 15. Held, that it was the plain intent of the instrument to insure the liability of the sureties for all the time Trumpbour acted as treasurer, whether by appointment and reappointments, or by holding over after appointment or appointments;

That the words "even though he hold under successive appointments" were words of addition and not of limitation or exclusion. PARKER, P. J., and LANDON, J., dissented.

APPEAL by the defendant, Horace G. Young, as executor, etc., of Thomas Cornell, deceased, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Ulster on the 19th day of December, 1895, upon the verdict of a jury rendered by direction of the court after a trial at the Ulster Circuit, and also from an order bearing date the 10th day of December, 1895, and entered in said clerk's office, denying the defendant's motion for a new trial made upon the minntes.

The action was originally brought against Matthew T. Trumpbour and Edwin Young, predecessor of the present defendant, to recover $15,000, the penalty in a bond executed and delivered to the plaintiff August 1, 1867, by Matthew T. Trumpbour, L. N. Hermance, John Kiersted and Thomas Cornell, which sum by the bond they jointly and severally promised to pay. Trumpbour died after suit was brought and the action has not been revived against his representatives. The condition of the bond is as follows:

"WHEREAS, The above-named Matthew T. Trumpbour has been chosen and appointed assistant treasurer of the said The Ulster County Savings Institution, and will, by virtue of his office, handle divers sums of money and securities belonging to the institution : Now, therefore, the condition of the preceding obligation is such that, if the above bounden Matthew T. Trumpbour, his executors or administrators, shall, at the expiration of his said office, or at any time on request to him or them, make or give unto the said institution, or its agents or attorney, a just, full and true account of all such money or securities or other property as may have come in his hands, charge or possession as such assistant treasurer as aforesaid, and shall and do pay and deliver over to his successor in office, or any other person duly authorized to receive the same, all such sums of money, securities or other property as may appear to be due and owing by him to said institution; and if the said Matthew T. Trumpbour shall well and truly, honestly and faithfully in all

App. Div.]

THIRD DEPARTMENT, MARCH TERM, 1897.

things serve the said institution in the capacity of assistant treasurer, as aforesaid, during his continuance in office, then the above obligation to be void, otherwise to remain in full force and virtue.

"It being understood that this bond is to be binding for all the time the said Matthew T. Trumpbour shall hold said office of assistant treasurer, even though he hold under successive appointments, but nothing herein shall prevent the sureties terminating their liabilities by given* at least two weeks' written notice of an intention so to do."

The plaintiff is a savings bank incorporated under chapter 152, Laws of 1851, and is subject to the general laws of the State relating to savings banks.

On the 16th of July, 1867, at their regular annual meeting, and acting within their powers, the board of trustees of the plaintiff elected and appointed Matthew T. Trumpbour assistant treasurer "for the ensuing year." The by-laws provided that this office should hold at the pleasure of the board.

He was in like manner elected assistant treasurer July 21, 1868, "for the year."

And again, July 20, 1869, he was duly elected assistant treasurer "for the ensuing year." He was never again elected or appointed assistant treasurer, nor to any other position in the bank, but, nevertheless, continued to serve as assistant treasurer continuously from the date of his first appointment down to the fall of 1891. The board of trustees meantime held their regular meetings in July every year. Between 1873 and 1887 Trumpbour abstracted upwards of $100,000 from the plaintiff. Upon demand upon him to restore the amount abstracted he refused, and also he and the defendant's testator severally refused upon demand duly made of each of them to pay the penalty of the bond.

Henry C. Soop and A. T. Clearwater, for the appellant.

Severyn B. Sharpe and J. Newton Fiero, for the respondent. HERRICK, J.:

It will be observed that the defalcation did not occur until long after Trumpbour's last reappointment, and the question is whether

*Sic.