8 N.Y.S. 929 | N.Y. Sup. Ct. | 1890
This action is brought against' the defendant as indorser of a promissory note made by one John Reed. The answer puts in issue the indorsement by the defendant. The plaintiff had the verdict at circuit, and from the judgment entered upon that verdict this appeal is taken. The note in suit was made to the order of the defendant. The evidence for the plaintiff tended to show that it was transferred by the defendant to the Delta Azotin Company, on account of a debt from the defendant to the latter company. Upon such transfer it was indorsed, “Yavassa Phosphate Co., W. E. Lawton, President. ” The note was subsequently discounted by the plaintiff
Evidence was given by'Jones, president of the Delta Azotin Company, to the effect that he had received many such notes from Lawton; and by one Kirkland, a clerk of Lawton’s, and practically also the book-keeper of the defendant, so far as the Píew York office was concerned, that Lawton had indorsed 300 or 400 notes like the one in suit, and had them discounted, and that the witness Kirkland had made entries in the books of the company of the proceeds of such notes. Knox, the president of the plaintiff, testified that similar notes had been discounted by the plaintiff, and subsequently paid. We think that these facts, if proved by competent evidence, were sufficient to justify the submission to the jury of the question of estoppel on the part of the defendant as to Lawton’s authority. It may be assumed that the other trustees did not know that Lawton was indorsing commercial paper, but if such were the fact, and entries of the transactions disclosing their nature were made in the books of the defendant company extending over a long period, the mere ignorance of the trustees would not suffice to relieve the defendant. The corporation is justly chargeable with notice of all that should have been known by the trustees, as well as what actually was known. If, for several years, Lawton, though without authority, was using the credit of the company and the corporate machinery to avail himself of that credit, entering the transactions on the books of the corporation, and paying obligations out of apparently corporate funds, we think the trustees could not, by their negligence in omitting to discover the fact of practically turning over to Lawton the whole management of the PTew York office, relieve the company from liability to those who had acted on the faith of the apparent power.
But the indorsement of numerous notes was not of itself sufficient to charge the company. Such was a mere repetition of the fraud. The essential point was to charge the defendant with either actual or implied notice. The entries of the transactions in the company’s books may have been of such a character as to have accomplished this object. Such entries, as well as the notes, were, against the defendant’s objection that the evidence was secondary and under its exception, proved, not by the books or notes, but by the testimony of the clerk, Kirkland. As to the notes, we are inclined to think the ruling of the trial court correct.' Chrysler v. Renois, 48 N. Y. 209. But as to the books we can find no justification for it. The objection was directed to the exact
We think this claim cannot be sustained. The evidence of the various transactions with the Delta Azotin Company by which the note in suit was indorsed to that company is solely that of Jones, its president. He testified that it was delivered by Lawton in part payment of a running account in favor of the Azotiu Company against the defendant for goods sold. The books of neither company were produced to show the account. Jones does not state what goods were ever sold to the defendant, and the existence of any dealings between the two compánies is denied by the defendant. Law-ton, who is the defaulting president, was interested in the Delta Azotin Company. To say the most of this evidence, it was neither so satisfactory or so conclusive that the question of the existence of the debt, and the payment of it by the note in suit, should have been submitted to the jury for determination. The judgment appealed from should be reversed, and a new trial ordered, costs to appellant to abide the event.