157 N.Y.S. 725 | N.Y. App. Div. | 1916
Lead Opinion
The defendant Foster appeals from a judgment entered against him on the direction of a verdict in favor of the plaintiff. Both parties requested the direction of a verdict. There was no opinion filed on the direction of the verdict. While the case was apparently a very simple one, yet the defendant Foster set up ten separate defenses in his answer. The action was upon a general written guaranty for the payment of a promissory note alleged to have been made by the defendant Thomas B. Mclntire, Inc., a domestic corporation. A like instrument of guaranty between the same parties was before this court in 168 Appellate Division, 139, and it was held to be a general guaranty. So far as the facts go I recommend no interference with the finding of the trial court. This would dispose of the appellant’s contention that there was a diversion of the proceeds of the note contrary to the understanding upon which he signed the instrument of guaranty. There is, however, a question of law involved, as to which, as it seems to me, the trial court committed reversible error. The plaintiff pleaded the making of the corporation note in paragraph “ First ” of its complaint. The defendant Foster denied this allegation in his answer. The guarantor, Foster, had a right
Stapleton and Rich, JJ., concurred; Putnam, J., read for affirmance, with whom Jenks, P. J., concurred.
Dissenting Opinion
Appellant Foster by the words of his guaranty, in which he fully described this sixty-day note, I think, became estopped from setting up the omission of a seal or otherwise questioning the note’s validity. As vice-president and a stockholder in the corporation of Thomas B. McIntire, Inc., his signature on this guaranty procured a loan for the corporate purposes, which has been so applied. He stands like an indorser who cannot raise such a defense, as by the indorsement he guarantees the validity of the corporate notes. (Donohoe v. Meeker, 35 App. Div. 43;
Furthermore, there was proof of two prior corporate notes thus made by the president and supported by a like guaranty in which appellant joined. Corporate authority may be implied from previous official dealings, and here this authority must be regarded as found, and such a finding comprised in the court’s direction of a verdict.
Where the corporation had the full proceeds and applied them in its business within the scope of the guaranty, I cannot agree to let out a guarantor merely because the note did not bear a corporate seal.
Jenks, P. J., concurred.
Judgment reversed and new trial granted, costs to abide the event.