117 Wis. 569 | Wis. | 1903
This is an action against the defendant (a foreign corporation), as indorser of two promissory notes for $1,074.58 and $1,448.98, respectively, with interest. The defense was that there was no consideration for the indorsement, and that the plaintiffs were not bona -fide holders. At. the close of the trial a verdict for the defendant was directed,, and from judgment thereon the plaintiffs appeal.
Many of the facts were undisputed, and may be stated as follows:
The plaintiffs, Pelton and Reid, are partners, and were such in July, 1898, engaged in the manufacture of lumber at Cheboygan, Michigan. At that time the firm of Wil-loughby & Hathway was engaged in selling lumber on commission, having a yard at Tonawanda, New York. July 13,, 1898, Pelton & Reid made a written contract with Wil-loughby & Hathway by which Pelton & Reid agreed to ship one or more cargoes of lumber to Willoughby & Hathway at Tonawanda, which the second party agreed to sell to customers, and to guaranty payment for all lumber sold, and render monthly statements of sales, accompanied with remit-
At Tonawanda a firm known as Calkins & Co. had a lumber yard adjoining the yard of Willoughby & Hathway, and one J. V. Smeaton was manager of the business. In June, 1898, the defendant corporation was organized by Wil-loughby & Hathway, Smeaton, and one Ellmaker for the purpose of transacting a lumber business, and of this corporation Ellmaker became president, Smeaton vice president, and Hathway secretary and treasurer, the active management of the corporation’s business being in the hands of Smeaton and Hathway. January 1, 1899, the defendant corporation rented the Willoughby & Hathway yard, then containing from one to two million feet of lumber, and also rented Cal-kins & Co.’s yard, containing several million feet of lumber. At this time the intention of the defendant was to transact a commission lumber business in these yards, beginning with the opening of navigation in the spring of 1899. The defendant did not purchase the lumber in the AYilloughby & Hath-
In May, 1899, Willoughby & Hathway sent Pelton & Eeid by mail a four months’ note for $2,486.27, executed by the firm of Humphrey & Holdridge to the order of Willoughby & Hathway, and indorsed by them, and also indorsed in the name of the defendant by Hathway, and Pelton & Eeid credited the same to Willoughby & Hathway on their commission account. This note was not produced on the trial. Humphrey & Holdridge was a firm doing business at Honeoye Falls, New York, and the note was purely accommodation paper so far as they were concerned, given to the firm of Willoughby & Hathway; but Pelton & Eeid did not know this fact, and supposed the note to be for lumber sold to Humphrey & Hold-ridge. When this note came due it was not paid, but another accommodation note of Humphrey & Holdridge was mailed by Willoughby & Hathway to plaintiffs, and accepted by them in renewal of the former note. This last note was payable to the order of defendant, and indorsed in defendant’s corporate name by Hathway as treasurer, and also by Wil-
Tbe contention of respondent in the'' court below was that, tbe indorsement of tbe notes in suit by defendant was purely an accommodation indorsement, without consideration, wbicb Hatbway bad no power to make, and that tbe plaintiffs were not bona fide holders, because they received tbe paper for tbe individual debt of Willoughby & Hatbway, and were charged with notice that tbe indorsement of tbe defendant was without consideration and unauthorized. It is certainly true that an officer of a corporation, in tbe absence of special authority, has no power to execute accommodation paper in tbe corporate name, and that a person receiving such paper, either knowing or being charged with knowledge of tbe fact that it is accommodation paper, cannot bold tbe corporation. Doubtless, also, when a person receives a note for tbe debt of another, wbicb bears tbe indorsement of a third person or corporation not in tbe chain of title, be is charged with notice that tbe indorsement is an accommodation indorsement. West St. Louis S. Bank v. Shawnee Co. Bank, 95 U. S. 557;
In tbe present ease it appeal’s that the original note of April 29th, of which the notes in suit were mere renewals, was delivered and received to apply upon the liability of Willoughby & Hathway on their commission contract. It appears by ITathway’s own testimony that it was executed by Humphrey & Holdridge as makers, and was payable to the order of Willoughby & Hathway, and that he indorsed the corporate name of the defendant upon it before delivery to the plaintiffs. Thus the note itself showed that the defendant corporation was not in the chain of title, and hence that its indorsement was presumptively an accommodation indorsement for the benefit of Willoughby & Hathway. 1 Bates, Partnership, § 358. If, therefore, the evidence in the case had shown that such indorsement was in fact without consideration, and made only for the accommodation of Wil-loughby & Hathway, there can be no doubt that the plaintiffs were rightly defeated, because the form of execution of the first note (upon which, manifestly, the entire question depends) was such as, under the principles stated, to give them notice of the character of the indorsement, and hence notice that it was unauthorized, at least unless special authority could be shown. It is true that the testimony of the witness Smeaton tended to show that the defendant corporation received no consideration for the indorsement of the note by Hathway in its name, and that the defendant was never indebted to Willoughby & Hathway nor to the plaintiffs, and, if this testimony stood alone, doubtless the judgment was right; but the witness Hathway testifies directly that the original note was given and indorsed with Smeaton’s knowledge, and that it in fact represented Pelton & Reid lumber bought by the defendant of Willoughby & Hathway. We are unable to say that this testimony was not credible. If true,
By tlie Gourt. — Judgment reversed, and action remanded for a new trial.