50 Conn. 167 | Conn. | 1882
The defendant is a life insurance eom
It is not claimed by the plaintiff that there is any express authority in the charter of the defendant to authorize the use of its name by way of accommodation indorsement to pay the debts or to raise money for the use of the railroad company, nor that the indorsement in question was made by any express authority of the board of directors of the defendant corporation. Of course it is entirely clear that the Charter Oak Life Insurance Company was not chartered to pay the debts, or to raise money for the use, of the Connecticut Valley Railroad Company, and that any use of its name by any agent by way of accommodation indorsement to that end is wholly unwarrantable, illegal, and ultra vires. The plaintiff having discounted such accommodation paper, and appropriated the ^proceeds to the payment of a preexisting indebtedness of the railroad company, must hold the indorsement in question subject to all the ordinary limitations upon the power of an agent of such a corporation to •use the name of the principal.
Two considerations are urged by the plaintiff to avoid the application of that salutary principle which forbids an
First, it is contended that the indorsement of the defendant was made by a person having general authority to use the name of the defendant corporation by way of indorsement without restriction; secondly, that the indorsement in question was not an accommodation indorsement, but was for value and in regular course of business.
Relative to the first contention, the case states that the indorsement was made by J. C. Walkley, who Avas president of the life insurance company from 1853 and of the railroad company from 1869, to April, 1876, and that “the plaintiff - did not claim that Walkley had any express authority from the defendant to make the indorsement as president of the defendant company, but claimed that he had an implied authority by having been in the habit of indorsing paper and other obligations as president of that company; and from 1871 till after the date of the note in suit, he Avas the acting business manager of the defendant company, Avith the knowledge and consent of its directors, and signed and indorsed notes, checks and other obligations of the defendant to a large amount as its president. But the court is unable to find that he had made any signature or indorsement of the name of the company, as its president, to any paper or obligations of any kind with the knowledge of the defendant company or of its officers, which they recognized as binding on it, except when it was' understood that the defendant was to receive the proceeds or direct benefit thereof.” This finding of the court beloAV disposes of this claim of the plaintiff. As president and general manager of the defendant corporation there is nothing in his acts or otherwise to show that Walkley was invested with power to use the name of the defendant except to promote the purposes of its creation and in regular course of its business. Being permitted to sign and indorse the defendant’s name upon paper in cases where it ‘‘was to receive the proceeds 1 or direct benefit thereof,” does not empower such agent to indorse accommodation paper to pay the debts of a third
It is also said by the plaintiff that this indorsement was for value, in the regular course of business, and therefore that the act of Walkley in making the indorsement was authorized. And in this relation it is found that the defendant held the amount of $76,000 of an issue of a million dollars of first mortgage bonds of the railroad company, and all its second mortgage bonds, amounting to $1,250,000, as collateral security for a large indebtedness to the defendant from the railroad company; the amount of which indebtedness is not found. The interest coupons of the first mortgage bonds were due July 1st, 1875; the railroad company at this time had no available funds with which to pay them, and the defendant was embarrassed by the failure of a New York concern with which it had financial dealings. Prior to June 30th, 1875, the defendant had generally provided for the payment of the coupons by loaning the railroad company the money, but it is not found that there existed any agreement on the part of the defendant to pay the coupons due July 1st, 1875, or to provide for their payment. Walkley, at the time of the discount of the note, said to the officers of the plaintiff that the maker (Clark) was good; that the railroad company could not their meet the payment of the coupons, but that he hoped it would be able to pay the note at its maturity from earnings of the road, but if not paid, either by the maker or the railroad company, the defendant would pay it; that it was for the interest of the defendant to have the coupons paid promptly in order to keep up and maintain the value and credit of the bonds, and that the defendant had ample security. The cashier of the plaintiff bank supposed from what Walkley said to him at the time the note was discounted, that it was virtually for the benefit of the defendant, and was to be used by the railroad company in payment of interest coupons of the first mortgage bonds. The defendant at the time of this discount had on deposit in bank from $145,000 to $148,000 subject to check. The railroad company then and for years
These considerations, with the fact heretofore stated, that the proceeds of this discounted note were appropriated by the plaintiff and applied in payment of a pre-existing indebtedness from the railroad company to the plaintiff, make further comment on this point superfluous.
Neither is there anything in this case to permit the application of the doctrine of equitable estoppel. The plaintiff was in no wise misled; it had full knowledge, it has parted with nothing.
Another consideration exists equally conclusive against the plaintiff’s right to recover in this action. The indorsement in question in the defendant’s name is a blank indorsement of a negotiable note by a person not a party to that note. In Connecticut such an indorsement has a peculiar but absolutely settled import. It is found that no contract different from that implied by law existed, and it is further found as follows:—“ It was not proved nor claimed by the plaintiff that it had ever taken any steps to collect the note of the maker, nor that he was not of sufficient ability to pay'it when it fell due, nor that the same could not have been collected of him by the use of due diligence; ” thus
At the September term, 1880, of the Superior Court, the defendant moved for an order requiring the plaintiff to write over the blank indorsement of the defendant any contract which the plaintiff might claim to prove differing from that implied by law. The plaintiff objected to the making of such an order. The court however made the following order: “ The plaintiff has leave to amend by adding a new count on or before January 15th, 1881, and at the same time to designate the count on which it relies, or in the alterna
“ Ætna National Bank v. Charter Oak Life Ins. Co. Hartford County; Supreme Court.
“ In the above entitled cause the plaintiff, in compliance with the order of the court, but protesting that said order is illegal and irregular, hereby gives notice that it intends to claim a recovery under the fourth count of the declaration, but does not hereby waive its right to offer evidence to support any other count of the declaration, and does not hereby waive its right to recover upon any other count of the declaration if the facts warrant such recovery.”
At the September term, 1881, of the court, at the commencement of the trial, the plaintiff upon request of the defendant refused to designate any one count of the declaration on which it intended to rety, and the plaintiff’s counsel read to the court the whole declaration, consisting of four counts, and claimed the right to offer evidence under each of the counts. Thereupon the defendant renewed its motion, and the court required the plaintiff to write over the indorsement on the note, before trial, any claimed contract differing from the one implied by law from such indorsement. This last order was in strict accordance with the rule stated in Castle v. Candee, 16 Conn., 234, and with the settled practice in cases of this character. So long as the plaintiff relies upon the contract implied by law the defendant is apprised of the plaintiff’s claim, but when he seeks to avail himself of his right to prove another and different contract, then, in the language of the court in the case last cited, “ we think upon the principles of fair trial that it is the duty of the plaintiff, if required, to fill up the indorsement before trial with the agreement upon which he intends to rely in his proof.”
It is unnecessary to determine the effect of the order made in the first instance as limiting the right of a plaintiff to frame his declaration with different counts to meet the
Several questions of evidence arose upon the trial and are presented by the record, most of which are unimportant and are not pressed. Some however are insisted upon. William R. Cone, president of the plaintiff bank, was offered as an expert witness “ to prove that it is the custom and usage of banks generally to require all paper discounted by them to be bankable or commercial paper, and all persons indorsing the same to be bound thereby.” Unless this evidence was offered to contradict the contract implied by law from such blank indorsement, by substituting in place of the contract implied by law a contract implied from the usage and custom of banks, it was wholly immaterial. Nothing indicates that the paper was not “bankable or commercial,” or that the persons indorsing it were not “bound thereby.” The persons indorsing the note are “ bound thereby ” according to the rules of law applying to their indorsement and in no other way. If the evidence was offered to prove that banking people generally do not regard such blank indorsement as importing the contract which the Connecticut law implies, it was equally immaterial. Our peculiar rule of law in this particular did not spring into existence through, nor is it dependent upon, the understanding and custom of banks generally.
John W. Stedman, the insurance commissioner, was asked—“What was the condition of the defendant company as to solvency ? ” This was properly excluded. An inquiry as to the solvency of the defendant company as
J. C. Walkley was asked whether, when he indorsed the note for the Charter Oak Life Insurance Company, he intended to assume the obligation of an indorser to the ¿Etna bank. This question was properly excluded on the ground stated in the ruling of the court below, that is, that the uncommunicated and unexpressed intent of Walkley was immaterial. Besides this there was properly no question as to whether he in fact “intended to assume the obligation of an indorser.” The controversy was as to the legal effect of that indorsement, and that is not to be controlled by his secret intent. His opinion was also properly excluded as to the effect of the non-payment of the interest coupons of the first mortgage bonds upon the value of the second mortgage bonds. If this was material to the issue, such effect could not be shown by the opinion of Walkley, not accompanied by any facts upon which the opinion proceeded. There is nothing to indicate that the witness had any special knowledge, or indeed that the subject was of a character upon which an expert’s opinion could be given. - The facts being shown it would seem that the court could .form an opinion as well as Walkley. Such opinion at the best would have been wholly speculative.
There is no ground for a new trial, and no error in the judgment of the court below.
In this opinion the other judges concurred.
In this case Judges Andrews and Stoddard, of the Superior Court sat in the places of Judges Carpenter and Pardee, who were disqualified by interest.