152 N.Y.S. 201 | City of New York Municipal Court | 1915
The plaintiff bank is entitled to judgment against the defendant church for the amount of its note with interest, but is not entitled to judgment against the individual defendants as indorsers thereon. The face of the note in suit is as follows:
“ $1750.00/100 August 19, 1914.
“ Thirty days after date we promise to pay to the order of ourselves Seventeen Hundred and fifty 00/100 Dollars at Chelsea Exchange Bank, 34th St. near 8th Ave. Value received.
“ First United Presbyterian Church,
“ 16 West 108th St.
“ Pre.s. John Elliott.
“ Treas. Edward A. Shea.
“No. 41846 Due 9/18.”
On the back of the note appears the following indorsement:
“First United Presbyterian Church, John Elliott, Pres. Edward A. Shea, Treas. Finance Committee, John Elliott, Edward A. Shea, John McKee.”
The plaintiff bank does not assert that Elliott or Shea has any liability, individually or jointly with the corporation, as makers of the note, which is conceded to be the authorized obligation of the church corporation, executed and delivered for its purposes, and payable to its order. The plaintiff’s claim is rather that Shea, Elliott and McKee are personally liable as indorsers of the corporate note, because of
Construction of the indorsement of a note is governed by a different rule than the maker’s signature,. and the difference is all in the direction of deeming an indorsement to have been made in a representative capacity and for purposes of transfer rather than for .the assumption of a personal liability. Huffcutt Agency, § 194; Neg. Inst. Law, § 72; First National Bank v. Hall, 44 N. Y. 395; Collins v. Buckeye State Ins. Co., 17 Ohio St. 215; Souhegan Bank v. Boardman, 46 Minn. 293; Babcock v. Beman, 1 E. D. Smith, 401; 11 N. Y. 200; E. Moch Co. v. Security Bank, supra.
The plaintiff relies upon a great number of decisions not readily reconcilable but plainly distinguishable on the facts from the case at bar; for example:
(1) Cases in which the individual signature is followed by words designating a representative capacity or a corporate office, with or without disclosure of the identity of the principal or the name of the corporation ;
(2) Cases in which the name of the corporation appears in the body of the note but not in connection with the signature or indorsement; and
(3) Cases in which the name of the corporation, in
Under circumstances such as those just summarized, notes have variously been held to create an individual, corporate or joint liability, or to call for parol proof of actual intent. None of these rulings, even if fully accepted in this state, could avail to create individual liability from an indorsement so obviously and conclusively corporate as that at bar.
If there were doubt of this under common-law principles, the Negotiable Instruments Law has resolved the doubt in favor of these defendants. Section 74 provides that “where any person is under obligation to indorse in a representative capacity, he may indorse in such terms ■ as to negative personal liability.” That is just what these defendants did. Section 39 provides that ‘ ‘ where the instrument contains or a person adds to his signature words indicating that he signs for or on behalf of a principal, or in a representative capacity, he is not liable on the instrument if he was duly authorized, but the mere addition of words describing him as agent, or as filling a representative character, without disclosing his principal, does not exempt him from personal liability.” The manner of executing this indorsement seems fairly to come within the protection of the statute and to negative personal liability.
Inasmuch as the case was tried without a jury, I felt free to receive, over objection, the rather fragmentary parol evidence offered by the bank and the defendants as to their course of dealing. This proof indicated that the church maintained its bank account with the plaintiff bank and had at various times bor
“First United Presbyterian Church of New York
FINANCE COMMITTEE
Countersigned Signed Signed
John McKee John Elliott Edward A. Shea,
Pres. Treas.’ ’
The parol proof also indicated the plenary authority of the finance committee to secure this loan for the church upon the latter’s note. Accordingly, if it be. deemed proper to receive and consider parol evidence on the question whether the collateral circumstances and actual intent of the parties show a contractual purpose and impose a liability undisclosed by the tenor of the note, the record at bar contains no indication that the result would be other than that already stated.
Judgment may be entered against the church corporation and in favor of the three individual defendants.
Judgment accordingly. -