Hyperlawhypertext legal database Cortland Wagon Co. v. Lynch 63 N.Y. St. Rep. 774

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Cortland Wagon Co. v. Lynch

63 N.Y. St. Rep. 774 Court N.Y. Gen. Term Decision date 1894-12-07 English

Delivered by Hardin, P. J.

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p. 774
Cortland Wagon Company, App’lt, v. Margaret Lynch, Resp’t.
{Supreme Gourt, General Term, Fourth Department,
Filed December 7, 1894.)

Headnote

Principal and agent—Mote.
A note signed as “ agent ” does not bind a principal, who is not named either in the body or signature of the note.
p. 775
Appeal from a judgment entered, on a decision made on the trial before the court.
The trial court found as conclusions of fact:
i'(l) That on or about April 7, 1893, at Brockport, N. Y., Thomas Lynch made and executed a promissory note in writing, of which the following is a copy :
“ 1 $50.00. Brockport, N. Y., April 1th, 1893.
“ ‘ November first, I promise to pay to the order of Fred B„ Hixson fifty dollars, at the First National Bank, Brockport, N. Y. Yalue received, with use. Thomas Lynch, AgV
“ (2) That said note was duly transferred to the payee, Fred B. Hixson, who, before the note became due, for value received, indorsed the same, and said note, thus indorsed, was thereafter transferred to the plaintiff,
“ (3) That, after said note became due, it was duly presented for payment at the First National Bank, Brockport, N. Y., and payment thereof duly demanded, which was refused, and thereupon said note was protested for non-payment.
“ (4) That the said Thomas Lynch was the husband of the defendant, and was at that time carrying on a retail hardware business at Brockport, N. Y., -in defendant’s name.
“ (5) That the consideration for said note was a road cart bought •of Fred R. Hixson.”
As conclusions of law the trial court found, viz.:
“ (1) Defendant is in no wise bound or made liable by the signature, 1 Thomas Lynch, AgV
“ (2) A principal cannot be made liable on a written instrument made by his agent, unless it is shown in the body of the instrument or in the signature that the contract was made for and on behalf of the principal whose name was disclosed therein.
“(3) The affix”1 Ag’t ’ is merely descriptive of the person, and not of the character of the liability.”
The court thereupon ordered judgment for the defendant.
Kellogg & Van Hoesen, for app’lt; Delbert A. Adams, for resp’t.

Plaintiff’scomplaint is based upon a negotiable promissory note, which is se.t out in the findings of fact made by the trial judge. The note was not signed by the defendant Nothing appears in the body of the note, or in the signature attached thereto, indicating that it was the promissory note of the defendant. The complaint contains no allegations to support a recovery for the consideration entering into the note, and the plaintiff has rested its right of recovery solely upon the commer cial character of the instrument declared upon, and found td have been executed by Thomas Lynch, who added after his name the affix “ Agt.” Doubtless, Thomas Lynch was personally liable upon the note. However, as nothing appears in the body of the note or in the signature placed thereto indicative of any liability on the part of the defendant, the plaintiff failed to establish a •cause of action against her. Taft v. Brewster, 9 Johns. 334 ; Guyon v. Lewis, 1 Wend. 26 ; Moss v. Levingston, 4 N. Y. 208 ;

p. 776
Bowne v. Douglass, 38 Barb. 315 , in which case Ingraham, P. J., points out the distinction between the maker of a note and the indorser of a note who adds words indicative of a special character after his name. In Pentz v. Stanton, 10 Wend. 271 , it was held that in order to bind a principal—“ The agent in such case 'must either sign the name of the principal to the bill, or it must appear on the face of the bill itself, in some way or another, that it was in fact done for him, or the principal will not be bound; the particular form of the execution is not material, if it be substantially done in the name of the principal.”

In De Witt v. Walton, 9 N. Y. 571 , Gardiner, C. J., said: “ The plaintiff has declared upon a promissory note as his only' cause of action. He must sustain his complaint by proof that the defendant was a party to the express contract upon which he has counted. He has given evidence tending to prove that Hoyt had authority to bind the defendant personally and legally, under the designation of ‘ The Churchman.’ But the contract produced is one according to which Hoyt assumes to pay, and signs his own name, with a statement appended that he is 1 Agent for the Churchman.’ This is not enough. The good sense of the many authorities upon this subject would seem to be that, where a party is sought to be charged upon an express contract, it must at least appear upon the face of the instrument that the agent undertook to bind him as principal. The appellation by which the contractor may be distinguished is of no importance, provided it be sanctioned by the principal and embraced in the power conferred upon the agent. * * * There is no great hardship in requiring that if one-man undertakes to oblige another, by note, bill of exchange, or other commercial instrument, he should manifest his purpose clearly and intelligibly, or that his principal will not be bound, whatever may be the result in reference to himself.”

That authority has been cited in numerous cases decided by the supreme court and the court of appeals, and apparently remains unshaken. It was referred to with approval in a case decided by this court in 1876, entitled Bank v. Hayes, 7 Hun, 530 ; and after explaining the apparent deviation from that cáse by the court in deciding Green v. Skeel, 5 Thomp., & C. 25, the learned judge adds: “We must, therefore, hold the'law to be that a principal is not bound by the contract of an agent, unless the name of the principal is set forth in the contract, or annexed to the signature of the agent, showing that it was the intention of the agent to contract for and in behalf of the principal. If the contract does not show this important fact, the principal is not bound, but the agent "may be personally responsible on the contract.” See page 535.

The language of Gray, J., in Merchants Nat. Bank v. Clark, 139 N. Y. 310 ; 54 St. Rep. 593 , seems to be applicable to the case in hand. He says: “ Where a negotiable promissory note has been given for the payment of a debt contracted by a corporation and the language of the promise does not disclose the corporate obligation, and the signatures to the paper are in the names

p. 777
of individuals, a holder, taking bona fide and without notice of the circumstances of its - making, is entitled to hold the note as the personal undertaking of its signers, notwithstanding they affix to their names the title of an office. .Such, an affix will be regarded as descriptive of the persons, and not of the character of the liability. Unless the promise purports to be by the corporation, it is that of the persons who subscribe to it; and the fact, of adding to their names an abbreviation of some official title has no legal significance as qualifying their obligation, and imposes no-obligation upon the corporation whose officers they may be. This-must be regarded as a long and well-settled rule.”

He then, cites numerous authorities, among them De Witt v. Walton, supra. He then .adds: “ It is founded on the general principle that in a contract every material thing must be definitely expressed, and not left to conjecture. Unless the language-creates or fairly implies the undertaking of the corporation, if' the purpose is equivocal, the obligation is that of its apparent, makers.”

In the course of the opinion delivered in Briggs v. Partridge, 64 N. Y. 863 , in respect to circumstances under which paroi evidence may be received where a paroi executory contract has been made by an agent in his own name, Andrews, J., said: “ There is a well-recognized exception to the rule in the case of notes and bills of exchange, resting upon the law merchant. Persons-dealing with negotiable instruments are presumed to take them on the credit of the parties whose names appear upon them ; and a person not a party cannot be charged upon proof that the ostensible party signed or indorsed as his agent.”

Among other cases cited by the learned judge to sustain that-proposition is De Witt v. Walton, supra.

The doctrine of Be Witt v. Walton, supra, is referred to by Land ON, J., in Leavens v. Thompson, 48 Hun, 391 ; 16 St. Rep. 386 ; and, after recognizing the rule laid down by that case and others, he says: “ 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.”

Lerned v. Johns, 9 Allen, 419 , asserts the same doctrine. See, also, Daniel Com. Inst. (Ed. 1892) p. 278, §§ 300, 301, 303; 305; 1 Rand. Com. Paper, § 380; Pumpelly v. Phelps, 40 N. Y. 60 .

Appellant calls our attention to Brown v. Bank, 6 Hill, 443 , which was a case where the indorsement was made with a lead pencil, and the party had used in place of his signature the figures-1, 2, 8 ; and evidence was given “ strongly tending to show that the figures were in Brown’s handwriting, and that he meant they should bind him as indorser; ” and the court charged that, if Brown used the figures, “ intending thereby to bind himself' as indorser, he was liable,” which charge was approved; and we see nothing in the case which sustains the position of the appellant.

p. 778
Appellant calls our attention to Bank v. Warren, 15 N. Y. 577 , which, was a case where one partner, without authority, and for his own exclusive benefit, indorsed a promissory note made by himself in the firm name, and the indorsee took the note with the full knowledge of the facts; and it was held that the co-partner, whose name was used, became liable by his ratification of the indorsement and his subsequent promise to pay the note. We find nothing in the case which supports the contention of the appellant that the note in suit is to be treated as the note of the defendant.

If the foregoing views are correct, the exceptions to the conclusions of law stated in the decision made by the circuit court present no error, and the conclusions reached at the circuit must be approved.

Judgment affirmed, with costs.

All concur.

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