Case ID: misc_88/html/0103-01.html
Source: Caselaw Access Project
Author: {"author": "G-tjy, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Henry B. Singer, as Trustee in Bankruptcy of Yorkville Plumbers Supply Depot, Inc., Bankrupt, Appellant, v. Otto A. Strompf, Respondent.
    (Supreme Court, Appellate Term, First Department,
    December, 1914.)
    Corporations — action by trustee in bankruptcy against — pleading — evidence — when one dealing with officer of corporation who assumes to act for it is put on inquiry as to authority of officer.
    In an action by the trustee in bankruptcy of a corporation for goods sold and delivered by it, defendant pleaded as a counterclaim that after the debt sued for had accrued he filed a mechanic’s lien against certain premises and subsequently assigned it to said corporation which agreed to and did accept the assignment as a partial payment by defendant on account of his debt. Held, that in order to sustain such counterclaim and to show that the lien was accepted by the corporation in full satisfaction of a preceding indebtedness defendant was bound to establish an agreement to that effect, and in the absence of such proof the mere acceptance of such assignment did not discharge the original debt.
    Evidence considered, and held to entirely fail of showing that said lien was taken and accepted in satisfaction of defendant’s indebtedness to the corporation.
    A second counterclaim alleged that defendant performed work, labor and services for the corporation amounting to a certain sum and that it agreed to accept said work, labor and services as and for a payment or credit on account of defendant’s indebtedness. It appeared, however, that the wife of the president of the corporation owned certain real estate; that her husband had a power of attorney to transact her business; that defendant at the husband’s request went to see the property and made an agreement with both of them to and did work upon the wife’s property and that thereafter the husband, as president of the corporation, gave him a receipt for the value of said work. Held, that this attempt on the part of the president of the corporation to pay the indebtedness of himself or his wife and bind the corporation was without the slightest legal effect, he not having in any way been shown to have authority to release the debt due the corporation from defendant.
    One dealing with an officer of a corporation who assumes to act for it in matters in which the interests of the corporation and the officer are adverse is put upon inquiry as to the authority of the officer.
    Appeal by the plaintiff from a judgment of the Municipal Court of the city of New York, borough of Manhattan, first district, rendered in favor of the defendant, after a trial before the court without a jury.
    Henry W. Sykes, for appellant.
    J. Y. Eooney, for respondent.
   G-tjy, J.

The action was brought to recover the sum of $498.78 and interest from June 10, 1914, by the plaintiff, as trustee in bankruptcy for goods sold and delivered to the defendant by the Yorkville Plumbers Supply Depot, Inc., a corporation of this state. The answer admitted the allegations of the complaint, and set up two counterclaims, the first one alleging, in substance, that the defendant, after the indebtedness sued for had accrued, had filed a lien upon premises known as Washington Market and against the city of New York and one Bleckman for services rendered and materials furnished by the defendant, amounting to the sum of $275, and had subsequently assigned said lien to the Supply Company, “ who agreed to and did accept said assignment as partial payment of $275 by this defendant on account of his indebtedness.” The second counterclaim alleged that defendant performed work, labor and services for said supply company, amounting to the sum of $220, and that said supply company agreed to accept said work, labor and services as and for a payment or credit on account of defendant’s indebtedness.”

In order to sustain the first counterclaim and to show that the lien was accepted by the supply company in full satisfaction of a preceding indebtedness, the defendant must establish an agreement to that effect (Hall v. Stevens, 116 N. Y. 201, 206) and without such proof the mere acceptance of the assignment did not discharge the original debt. Friberg v. Block, 65 App. Div. 541, 542. As to-this counterclaim the defendant testified that one Vogel, then the president of the supply company, “ accepted the assignment.” Vogel testified, when called by the defendant as his own witness, that ‘‘ Mr. Strompf filed me an assignment of the lien to get some more credit. I accepted it and told him that if it was paid his credit was good.” The books of the supply eompány showed, however, that the account against the defendant has always been carried along showing a balance against him of $569.72, and upon cross examination Vogel testified that he told defendant that ‘ when the lien was paid he would give credit for the amount of the lien.” It also appeared that statements were rendered to the defendant monthly and that no credits appeared upon those statements. It was shown that the lien was never paid, and plaintiff offered at the trial to reassign the same to the defendant. I think that this testimony fails entirely of showing that the lien was taken and accepted as a satisfaction of defendant’s indebtedness to the supply company.

As to the second counterclaim, there can be little doubt but that Vogel intended to allow the defendant’s claim for work, etc., to apply upon his indebtedness to the supply company, as after the defendant performed the work Vogel gave him a receipt as follows:

" May 18, 1914.
“ Received from O. A. Strompf two hundred and twenty ($220.00)
Yorkville Plumbers Supply Depot,
Per T. Vogel, Pres.”

The evidence shows, however, that Vogel’s wife owned some real estate in Mt. Vernon, that Vogel had a power of attorney from his wife to transact her business, that defendant went to Mt. Vernon at Vogel’s request, and with Vogel and his wife made an agreement to and did work upon her premises, said work amounting to said sum of $220, and that thereafter Vogel gave defendant the receipt above quoted.

This attempt on the part of Vogel to pay the indebtedness of himself or his wife, and bind the corporation of which he was president, was without the slightest legal effect. He was not in any way shown to have authority to release a debt due the corporation, and his attempt so to do was wholly beyond the scope of his powers. McCloskey v. Goldman, 62 Misc. Rep. 462. Neither did defendant have a right to rely upon this act of Vogel without inquiring as to his power, as every person dealing with an officer of a corporation who assumes to act for it in matters in which the interests of the corporation and the officer are adverse is put upon inquiry as to the authority of the officer. Id.

Bijur and Page, JJ., concur.

Judgment reversed and new trial ordered with costs to appellant to abide event.