Leavens v. Thompson — 16 N.Y. St. Rep. 386

Majority

p. 386

Thurlow C. Leavens, Resp’t, v. Edward Thompson,. App’lt.

(Supreme Court, Central Term, Third Department,

Filed May, 1888.)

Headnote

1. Bills and notes—Non-negotiable paper—Title of transferee.

This action was brought to determine which of the parties was entitled, to the amount of a non-negotiable note paid into court by the maker. The defendant as owner of certain properties of a stage company, directed his agent to sell them. Pursuant to these directions the agent sold a coach to a party who made his non-negotiable note for $500, payable six. months after date, to the payee agent for the defendant, with interest.

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Subsequently the agent bought for himself, a coach, horses and harness from the plaintiff, giving in payment this note and $100 in money, and as a part of the transaction, describing himself by the term agent, agreed in an instrument under seal to perform for the plaintiff, certain services in carrying mail for a compensation, stipulated in a contract between the plaintiff and the United States. The defendant knew nothing of the sale of the coach by the agent, nor of the taking of the note and its transfer until afterward, and then he ratified the taking of the note, but repudiated the transfer to plaintiff. The plaintiff brought action on the note against the maker, who thereupon paid the amount due on it into court,and this defendant was substituted as such in the action. Held, that the note being non-negotiable and stating on its face the agency of the payee, no better title could be obtained by the plaintiff from the payee than he had.

2. Same—Terms of note cannot be varied by parol by stranger to its making.

Held, that the plaintiff being a stranger to the making of ■ the note could not vary its terms by parol.

3. Same — Notice of rights of owner given on face of note —• Effect of.

Held, that the rights of the defendant to the extent that notice of them given by the note fairly suggested them, must be respected, and that the plaintiff was chargeable with notice that the note belonged to the defendant.

Appeal from a judgment in favor of the plaintiff, entered in Warren county, upon the decision of the court upon trial without a jury.

Action between the parties to determine which of them was entitled to the amount of a non negotiable note which the maker had paid into court.

E. Putnam had possession of- a coach belonging to the Glens Falls and Lake George Stage Company. The defendant, Thompson, was the principal stockholder of this company, holding all its stock, except, possibly, two shares which one Whitman, on the trial, claimed to own; but whether he did or not was not clearly shown. Putnam, by the employment of the defendant, had been the general manager of the company. It operated a line of stages between Glens Falls and Lake George. Upon the opening of the railroad between these places in 1882, the company ceased its regular business, and Putnam, upon the direction of the defendant, undertook to sell its property, and account to the defendant. In October, 1884, he sold the coach referred to, to one Kellogg, for $500, and took his note therefor, as follows:

“Glens Falls, October 18, 1884.

“Six months after date, for value received, I promise to pay E. Putnam, agent for E. Thompson, five hundred dollars, with interest.

“ORLAKDO KELLOGG.”

On December 1, 1884, E. Putnam bought of the plaintiff a coach, horses and harness, for $600, and gave him in payment the above note and $100 in money. It appears that

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plaintiff had a contract to carry the mail to and from Glens Falls and Fort Edward; and, as a part of the transaction, Putnam describing himself as “ E. Putnam, agent,” agreed in an instrument under seal, to perform this service for the compensation stipulated in the contract between the plaintiff and the United States. The defendant, Thompson, knew nothing of the sale of the coach to Kellogg, or of the taking of the note, and its transfer by Putnam, until afterwards, and then he ratified the taking of the note, but repudiated the transfer to plaintiff. The plaintiff sued Kellogg upon the-note. Kellogg thereupon paid the money into court, and Thompson was substituted as a defendant.

A. D. Wait, for app’lt; A. J. Cheritree, for resp’t.

E. Putnam, in the sale of the coach to Kellogg, and in taking the note in suit, assumed to act as the agent of Thompson, the defendant, and to this extent Thompson ratified his action. If the Glens Falls and Lake George Stage Company had any rights in the coach sold, as against Thompson, or separate from his individual rights, the company is not present in this action to assert them. Putnam in the sale of the coach and in taking the note therefor did not pretend to exercise them or derive any authority under them. Putnam at least, could not dispute the agency he represented himself to exercise, and under which he obtained the note, and since the note was non-negotiable, and stated his agency on its face, the plaintiff, as Putnam’s transferee of the note, obtained no better or different title to it than Putnam himself had.

The plaintiff was a stranger to the making of the note and cannot vary its terms by parol. Coleman v. First National Bank of Elmira, 53 N. Y., 388 . He took it subject to. the defendant’s right and title to it, unless Putnam had the legal right to transfer to him the defendant’s title. Cases are cited to the effect that in the creation of an obligation an agent who signs his name to a note, in the body of which his principal is not named as the contracting party, does not purport to bind his principal by the addition to the agent’s signature of the word agent, or president, etc., but really binds himself. Barker v. Mechanics' Ins. Co., 3 Wend., 98 ; Moss v. Livingston, 4 N. Y., 208 ; Dewitt. Walton, 9 id., 571.

These are cases of negotiable commercial paper, in which from the form of the obligation it was held that nobody appeared to be bound but the person who signed or accepted it, and the rule was applied that a person not appearing to be a party to negotiable paper cannot be charged upon it. Briggs v. Partridge, 64 N. Y., 357 , 363.

They are narrow cases and easily discriminated against. Bank of Genesee v. Patchin, 19 N. Y., 312 ; Bank of New

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York v. Bank of Ohio, 29 id., 619; First Nat. Bank of Angelica v. Hall, 44 id., 395. They do not touch the case of non-negotiable paper. See cases cited in Briggs v. Partridge on page 362. They do not touch the payee of the paper. His rights if any notice is given of them in the paper itself must be respected to the extent at least that such notice fairly suggests them.

This rests upon the general doctrine of notice, namely, that the party charged with it is put upon inquiry and is chargeable with a knowledge of all the facts that an inqury properly made would have disclosed to him. Ellis v. Horrman, 90 N. Y., 466 . The plaintiff, therefore, is charged with knowledge that the note belonged to the defendant. When he received the note from Putnam it was in part upon an agreement by which Putnam agreed to perform the work in carrying the mail which the plaintiff had undertaken to do. The stage line from G-lens Falls to Lake George had been discontinued for two years. This mail route was on a different line of road. Putnam in taking the mail route did not assume to act for the defendant. There was no pretence of ostensible agency for defendant. The plaintiff therefore is charged with notice that Putnam was selling the note upon his private account, and hence in violation of the defendant’s rights.

And the finding of the court is that Putnam claiming to own the note sold it to the plaintiff, and that the plaintiff bought the note supposing Putnam to be the owner. The court also holds that on its face Putnam was the owner.

There is no occasion therefore to inquire under what circumstances Putnam could have transferred the note had he claimed to be acting as agent for the defendant.

On its face he was a mere agent, and his representation that he was owner, contradicted the terms of the note, and the plaintiff relied upon such a representation at his peril.

The judgment should be reversed, new trial granted, costs to abide the event.

Learned, P. J., and Ingalls, J., concur.