National Spraker Bank v. Treadwell — 61 N.Y. St. Rep. 817

Majority

p. 817

National Spraker Bank of Canajoharie, Resp’t, v. George C. Treadwell Company, App’lt.

(Supreme Court, General Term, Second Department,

Filed July 27, 1894.)

Headnote

Corporations—Liability.

A corporation is liable on a note, though not executed as the by-laws require, if not diverted but received by a bona fide holder, and its proceeds go to the benefit of the corporation.

Appeal from a judgment entered on a verdict in favor of plaintiff, and from an order denying a motion for a new trial.

Edward F. O' Dwyer, for app’lt; William G. Cooke, for resp’t.

—This is an action upon a promissory note, of which the following is a copy:

“ Albany, N. Y, March 10,1893. '

“ Five months after date, we promise to pay to the order of Geo. H. Treadwell five thousand 00 ¡ 100 dollars, at Hotchkiss & Co.’s Banking House, 31-33 Broadway, New York, without defalcation, for value received.

“ $5,000.00 | 100. Geo. O. Treadwell Co.

“Geo. H. Treadwell, President.”

The note was indorsed by George H. Treadwell and Hotchkiss & Co. The" defense consisted of a denial of the making of the note by the company, but that did not signify that the note was not made by the president, but was based upon the theory that the president was destitute of authority to execute the paper. It appeared from the evidence that the note was made and delivered to the plaintiff in renewal of a former note of the same party, which had been discounted by the plaintiff. When, therefore, the paper was produced by the plaintiff upon the trial, and proven, as it was, a case was made which required an answer. The fact that the paper was made by the president of the corporation, and was not signed by the treasurer, in accordance with the- by-laws of the company, constitutes no defense. The paper was not diverted from its original purpose, but went into the hands of a bona fide holder, and the company received benefit of the proceeds. The defense failed, and, as there was no disputed question of fact, the court properly directed a verdict for the plaintiff.

The judgment should be affirmed, with costs.

All concur.