Case ID: ny-st-rep_44/html/0379-01.html
Source: Caselaw Access Project
Author: {"author": "Lawrence, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

The Fifth Avenue Bank, Pl’ff, v. The Forty-second Street & Grand Street Ferry Railroad Co., Def’t.
    
      (Supreme Court, General Term, First Department,
    
    
      Filed February 18, 1892.)
    
    1. Corporations—Representations by officer of.
    A corporation is bound by the representations of one who is its secretary, treasurer and transfer agent, with power to countersign and issue stock, made in answer to inquiries as to the genuineness of particular stock.
    3. Same—Banks.
    An objection that the stock in question is not one which á state bank is authorized to take and become the owner of, can only be raised by the state authorities.
    Motion for a new trial upon exceptions, made by the defendant, after a trial at circuit, where a verdict was directed in favor of the plaintiff. *
    
      Edward G. James, for■ pl’ff; Freling H. Smith, for def’t.
   Lawrence, J.

A perusal of the evidence in this case satisfies ■us that the ruling of the justice, who tried the cause at circuit, was correct, and that the exceptions taken by the defendant .should be overruled, and judgment directed in the plaintiff’s favor upon the verdict.

The evidence shows that Allen was the secretary, treasurer and transfer agent of the defendant, and had power to countersign, seal and issue certificates of its capital stock, upon the surrender and cancellation of a prior certificate, upon the signing of the new certificate by its president, and his act in countersigning, sealing and issuing such certificate was a representation, not only within the apparent, but the actual scope of his powers.

In the case of the Bank of Batavia v. The N. Y., L. E. & W. R. R. Co., 106 N. Y., 195; 8 St. Rep., 209, the doctrine previously laid down in the cases of North River Bank v. Aymar, 3 Hill, 262; Griswold v. Haven, 25 N. Y., 595, and The New York & New Haven Railroad v. Schuyler, 33 N. Y., 30, was reaffirmed.

The court there declared that, “ It is a settled doctrine of the law of agency in this state, that where the principal has clothed his agent with power to do an act upon the existence of some •extrinsic fact, necessarily and peculiarly within the knowledge of the agent, and of the existence of which the act of executing the power is itself a representation, a third person dealing with such agent in entire good faith, pursuant to the apparent power, may rely upon the representation, and the principal is estopped from denying the truth to his prejudice. * • * * A discussion of that doctrine is no longer needed or .permissible in this court, since it has survived an inquiry of the most exhaustive character, .and an assault remarkable for its persistence and vigor.”

In this case the defendant held out Allen in the positions which he occupied to third parties, as one upon whose representations they could rely in respect to the genuineness of the particular certificates of shares of stock as to which the plaintiff made inquiries prior to making the loan to Hofele, and under the eases above referred to they are responsible for the injury which the plaintiff has thereby sustained.

The appellant cannot avail itself of the point that the stock in question is not one of the securities which a state bank is authorized to take and become the owner of under § 37 of the Revised Statutes, 1523, 8th ed. That question could only be raised by the state authorities. The defendant is estopped from raising it. National Bank of Xenia v. Stewart, 107 U. S., 676; Thompson v. St. Nicholas Nat. Bank, 113 N. Y., 325; 22 St. Rep., 929.

We discover no negligence on the part of the plaintiff which precludes it from recovering in this action, nor any' evidence upon which the defendant was entitled to go to the jury. None of the exceptions as to evidence appear to be well taken, and it-follows, therefore, that the motion for a new trial should be denied and judgment directed in the plaintiff’s favor, with costs- and disbursements.

Van Brunt, P. J., and O’Brien, J., concur.