Case ID: ad_158/html/0288-01.html
Source: Caselaw Access Project
Author: {"author": "Hotchkiss, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Henry A. Gardiner and William B. Reed, Jr., Respondents, v. The Bronx National Bank of New York, N. Y., Appellant.
    First Department,
    July 10, 1913.
    Bank — action on contract based on resolution of board of directors — evidence — parol evidence —statements by directors as individuals not binding on bank.
    A committee engaged in the organization of a national bank employed two assistant secretaries and passed a resolution to pay them a certain amount, with expenses. Thereafter said committee passed another resolution recommending to the board of directors of the bank, when elected, that a certain sum be awarded to the assistant secretaries to reimburse them for extra expenses. Later, at a meeting of the board of directors, a resolution was passed that “all acts, resolutions and contracts previously made by the organization committee or the appointed board of directors be hereby ratified and confirmed.”
    In an action by the assistant secretaries on an alleged contract, based on the resolution of the board of directors, to recover for extra expenses incurred, evidence examined, and held, that a judgment in favor of the plaintiff should be reversed and the complaint dismissed.
    
      Parol evidence that the resolution of the board of directors ratifying the previous acts of the organization committee was intended to confirm the plaintiff’s contract was incompetent and should have been excluded.
    Conversations with certain members of the board of directors at times and places when they were" not acting in their official capacity, were not binding upon the bank, and parol evidence thereof was insufficient to establish the contract.
    Appeal by the defendant, The Bronx National Bank of New York, N. Y., from a judgment of the Supreme Court in favor of the plaintiffs, entered in the office of the clerk of the county of New York on the 6th day of December, 1912, upon the verdict of a jury, and also from an order entered in said clerk’s office on the same day, denying defendant’s motion for a new trial.
    
      John Hall Jones, for the appellant.
    
      George B. Draper, for the respondents.
   Hotchkiss, J.:

It is not claimed that the “organization committee” had any power to bind the bank, the organization of which it was engaged in promoting. The committee’s resolution of September eighteenth was a mere recommendation to the Board of directors to be thereafter selected. The resolution of October twenty-fourth passed by the Board did not purport in any way to relate to the original contract with plaintiffs, or to their present claim for extra compensation, and was in no sense an adoption or ratification of the Committee’s resolution. Parol evidence that it was intended to be such was incompetent and should have been excluded. (Trustees of Southampton v. Jessup, 173 N. Y. 84.) The subsequent resolutions of the Board repudiated plaintiffs’ claim. Nor was the parol evidence by which plaintiffs sought to amplify the Board’s resolution of October twenty-fourth of a character sufficient to establish a contract with the bank. It consisted of desultory conversations with certain members of the Board, but at times and places other than at Board meetings. Whatever was thus said was said by such persons as individuals and not while acting officially, and, hence, did not bind the bank.

The judgment should he reversed and the complaint dismissed, with costs.

Ingraham, P. J., McLaughlin and Dowling, JJ., concurred; Clarke, J., concurred in result.

Judgment reversed and complaint .dismissed, with costs. Order to be settled on notice.