131 Misc. 370 | N.Y. Sup. Ct. | 1928
Three coadventurers, J. Gerla, B. Gerla and one Rothenberg, had procured from the owner a contract to sell to them a certain parcel of realty, situate in the city of New York. The plaintiff and one Goodman being desirous of obtaining that parcel, negotiated with the three coadventurers named for the purchase of it from them. On or about July 28, 1926, the Gerlas and Rothenbeig instructed their attorney to organize a corporation for them, styled Joelax Realty Co., Inc., for the purpose of taking title to the property in question in that character and name; and they then executed the certificate of incorporation. The negotia.
It is conceded for the plaintiff that he is estopped to deny the corporate existence of the payee. (Neg. Inst. Law, § 111.) It is contended, however, that the provision contained in the same section of the statute, that the drawer admits the capacity of the payee to indorse, has no applicability to such a situation as is here dealt with; and it cannot be denied that there has been heretofore a significant failure to rely on that provision in the litigation and disposition of controversies similar to that here. I do not think, however, that the defendant’s case depends upon a ruling in its favor that the statutory estoppel extends to the indorsement that was made by Gerla. Nor do I think that the plaintiff’s case neces
The question in a case such as this, as I read the authorities, is whether the drawer intended that the bank should pay the amount mentioned in the check to a definite individual or entity whom the drawer has named in the check; and if the person or entity to whom or which- the drawer intended the payment to be made is the person or entity to whom or which the payment actually is made, the bank is protected no matter what name the drawer has given to that person or entity in the body of the check. (Strang v. Westchester County Nat. Bank, 235 N. Y. 68; Hartford v. Greenwich Bank, 157 App. Div. 448; affd., on the opinion of Scott, J., 215 N. Y. 726; First Nat. Bank of Fort Worth v. Am. Exchange Nat. Bank, 170 id. 88; 7 C. J. 686, § 414.) Here the plaintiff was dealing face to face with B. Gerla, believing he was a member of á certain corporation. The contract gave notice to plaintiff that Rothenberg was also a member. Presumably plaintiff know that, as there must be at least three persons to form a corporation, one other person was a member, and it was wholly immaterial to him who that third person was. Manifestly, the persons he meant to be payees were those acting under the corporate name of Joelax Realty Co., Inc. By the mischance that they had not yet caused the corporation to be formed, he referred to them in his check by a name that they were not at that moment legally entitled to use. Surely the mere fact that when the check got to the three persons intended as payees they authorized one of their number to collect the sum named in the check and hold it temporarily for them all, cannot suffice to fasten liability upon the bank upon the notion or theory that payment was made by the bank to one unauthorized to receive it. The money was potentially in the possession of the three coadventurers at all times since the utterance of the check, and it actually came into the possession of the Joelax Realty Co., Inc., as soon as it became incorporated. Any previous irregularities were thus, as between the corporation and its founders, and the plaintiff, cured by ratification, and I am unable to discover any sound reason why the plaintiff in his assertion of this claim against the bank should be permitted to take advantage of an irregularity that did not cause him any loss. Under the stipulation I direct a verdict for defendant, with exception to plaintiff. I also, of course, deny plaintiff’s motion for a direction, with exception. Thirty days’ stay, and sixty days to make case.