I dissent. The judgment appealed from seeíñs to me to extend the responsibility of persons dealing with trustees not only beyond anything that has yet been judicially decided, but also beyond practicable limits. Of course there-can be no doubt that if the defendant'had received the checks in payment of an obligation due to it from Van Voorhis, whether by reason of overdraft or otherwise, it would have been chargeable, from the form of the checks, with notice that Van Voorhis was using jilaintiff’s money to pay his individual obligations, and was thus misappropriating plaintiff’s funds. ■ (Ward v. City Trust Co., 192 N. Y. 61.) In such á case the misappropriation would have been complete when the money was paid over, and the mere fact of its use for that purpose would establish the fact of its misappropriation. This case, however, is very different. There were two distinct periods at which defendant ■ acted : First, when it received the checks on. deposit, and, second, when it paid out the money on Van Voorhis’ drafts. The form of the checks which Van Voorhis deposited undoubtedly served to *321give notice to defendant that Van Voorhis was plaintiff’s treasure]’, and that he was depositing plaintiff’s money to the credit of his personal account. This, however, did not amount to notice of diversion or misappropriation, for there is no rule of law compelling the treasurer of a corporation to deposit the funds committed to his charge in any particular way. The plaintiff had intrusted its money to its treasurer as an individual, not to any particular bank account, and the deposit with defendant did not operate to take the funds out of the q us tody of the treasurer, but to leave them there. I am quite unable to see that the acceptance of the checks as a deposit to the credit of the very person who was presumptively entitled, to the custody of the fund was equivalent to acquiescence in a diversion, because in point of fact so long as the money remained in Van Voorhis’ custody it was not diverted, but was in the custody of plaintiff’s treasurer, where it ought to be. When we come to the paying out of the money it seems to me that it is equally difficult to hold defendant. The utmost notice with which defendant was chargeable, by reason of the form of deposit, was that Van Voorhis, plaintiff’s treasurer, had deposited plaintiff’s money in' his own name. That is to say, it had notice that the account standing in the name of Van Voorhis as an individual was in fact the account of Van Voorhis as treasurer. If it had been such in form the defendant would have subjected itself to no liability in paying out the money upon Van Voorhis’ check and would have been under no obligation to inquire to whom or for what purpose it was being paid out. The rule of liability sought to be fastened upon defendant, which bore no contractual obligation to the plaintiff, is much more stringent than could be applied to plaintiff’s depository bank, for Van Voorhis might have drawn the money in cash without imposing any legal obligation of inquiry upon the depository bank, or could without necessarily awakening suspicion have drawn checks to the order of any one, except himself, even to pay his individual debts. The defendant was a mere conduit through which the money passed, and the judgment bélow, in my opinion, holds it to a quite unreasonable responsibility, and one which finds no direct support in any case to which our attention has been called. In all of those relied upon by plaintiff there have been *322present the important fact, which is absent here, that the bank or individual to whom the diverted money was paid received it in payment of a debt or in some other way reaped a benefit from the payment. When that fact is absent a different rule has heretofore been applied. (Gray v. Johnston, L. R. 3 H. L. [1868], 1; Coleman v. Bucks & Oxon Union Bank, L. R. 2 Ch. Div. [1897], 243 ; Shields v. Bank of Ireland 1 Irish Rep. [1901], 222; Ashton v. Prest, etc., Atlantic Bank, 3 Allen, 217; Batchelder v. Cent. Natl Bank, 188 Mass. 25; Safe Deposit & Trust Co. v. Diamond Nat'l Bank, 194 Penn. St. 334; Rhinehart v. New Madrid Banking Co., 99 Mo. App. 381; Martin v. Kansas Nat'l Bank, 66 Kan. 655.)
The judgment should be reversed.
McLaughlin, J., concurred.
Judgment affirmed, with costs,, with leave to defendant to withdraw demurrer and to answer.