Warner v. Chappell

Headnote

Two negotiable promissory notes, for $500 each, made by P., were indorsed by C. for his accommodation, to be used to take up an equal amount of other paper previously made by P. and also indorsed by C. for P.’s accommodation. The notes were dishonored, at maturity, and a suit being brought thereon, against all the parties, by the Rochester City Bank, the then holder thereof, the plaintiff, at the request of P. and for his benefit solely, paid to the attorney of the bank the whole amount of the notes, and thereupon received the notes from the attorney, with an assurance from the latter that he, the attorney, had authority from the bank to make the transfer. Held,

that the plaintiff obtained a valid title to the notes by the purchase and transfer from the attorney of the bank, and could maintain an action thereon, against 0.

Held also, that under the circumstances, it would be presumed that the authority to the attorney to transfer the notes was contained in a proper resolution of the board of directors of the bank, for that purpose duly passed.

Heldfwrther, that if there were an omission on the part of the directors of the bank to pass the requisite resolution to authorize the transfer, yet that the plaintiff, being a purchaser for the full value of the notes, and having paid the price, in cash, without notice of such omission, his title to the notes would be protected by the last clause of the 8th section of the title of the revised statutes which makes void all transfers of the property and effects of a moneyed corporation, exceeding §1000, unless authorized by a resolution of the board of directors.

APPEAL from a judgment entered at a special term, upon the report of a referee.

The action was brought by,the holder of notes, against the indorser, who indorsed them in blank before due. The notes were made by J. F. Peck. The defendant claimed that he indorsed them for the accommodation of the maker, who paid, or procured them to be paid, for his benefit; and that the plaintiff received the notes with full knowledge that they had been paid by or on account of the maker. The following facts were found by the referee: That the notes, each for $500, the one dated the 25th of August, 1857, payable to the order of Samuel Silencer, and payable at the Metropolitan Bank, Hew York, seventy days after its date, and the other payable to the order of said Spencer, at the same place, sixty-three days after date, and dated the 1st of September, 1857, were made, indorsed by said Spencer and the defendant, and that each of them was protested for non-payment, and the indorsers duly notified thereof, as in the complaint was stated and set forth. That the proceeds of said notes respectively were received by the defendant and applied in payment of 'Other notes made and indorsed by the same parties, in the same manner. That the notes first mentioned were discounted by the Rochester City Bank, and after the protest aforesaid were placed by said bank in the hands of

its attorney, by whom a suit thereon was commenced against all the parties thereto, on the 11th day of March, 1858, and the complaint and summons in said suit were served on the defendant on the 12th, and on Spencer and Peck on the 14th day of the same month last mentioned. That about the time of the commencement of said suit, the plaintiff was informed by Spencer and Peck that the defendant was indebted to Peck and ought to pay said notes, and had expressly agreed to pay them, when they were made; that if a friend to Spencer would purchase the notes and compel the defendant to pay them as he ought to do, when the latter sued for the money thus paid, he would be compelled to comply with his agreement. That the plaintiff, confiding in the representations thus made to him, applied to the attorney of said bank, and offered to purchase said notes, and the latter, after (as he stated as a witness in this cause) having obtained the authority of the bank, agreed to sell said notes to the plaintiff for the amount due upon them, for principal and interest, and costs of protesting the same. That it was expressly stipulated that the plaintiff was to have by said purchase all the title and interest of said bank in the notes. That in pursuance of said agreement, the amount above mentioned was paid to said attorney for the use of the bank, and the notes were then and there delivered to the agent of the plaintiff by the said attorney, he remarking, in answer to an inquiry of said agent, that no writing was necessary to vest the title to said notes in the plaintiff, as that would pass by their delivery. -It was further proved that Peck at the same time paid the costs that had accrued in the bank suit, to said attorney. It was also proved that the plaintiff raised the money with which said notes were purchased, upon a joint note made for himself by the plaintiff and said Spencer, payable to the order of one Vary, whom the plaintiff procured to indorse it, and which was subsequently paid by the plaintiff. It was also proved that there was no agreement in writing, or otherwise, between Peck and Spencer, or either

of them, and the plaintiff, to indemnify or secure him in any way for his advance of money in the purchase of said notes; nor was there any evidence, except as above mentioned, of any resolution of the directors of the hank, authorizing the transfer and sale of the notes to the plaintiff. The referee found as a' conclusion of fact, from all the evidence, that the plaintiff purchased said notes in his own behalf, in good faith and for a full consideration. And as conclusions of law he found, 1. That the plaintiff acquired the title to said notes, subject only to the equities existing between the bank and the defendant at the time of the transfer. 2. That no resolution of the directors of said bank was necessary to give validity to the sale and transfer of the notes to the plaintiff for a full consideration, or if necessary, such resolution was, under the facts above stated, to be presumed. 3. That the plaintiff, as owner of said notes, had a right in this action to recover the amount thereof with interest from the time they respectively matured, with the costs of protest, of the defendant; that these items made an aggregate of one thousand ninety-eight dollars and ninety-three cents, at the date of the report, for which sum judgment was ordered to he entered.