Case ID: nys_36/html/0660-01.html
Source: Caselaw Access Project
Author: {"author": "BRADLEY, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

MILLER v. REYNOLDS.
    (Supreme Court, General Term, Fifth Department.
    December 28, 1895.)
    1. Warranty—-Of Authority to Execute Note—Who may Sue on.
    Liability on the implied warranty, of one executing a note in the name' of a corporation, that he had authority to do so, inures to the benefit of the payee; the note being given as part consideration of a conveyance of her husband’s land, and being made payable to her, as a condition and in consideration of her joining in the deed, and relinquishing her inchoate right of dower.
    8. Corporation—Officer—Authority to Execute Note.
    An officer of a corporation, who, by agreement with it, was given charge-of its business, and directed to pay from its proceeds all indebtedness of the corporation to him, has, on purchasing land for himself, no authority to execute in payment a note in the name of the corporation, though it at the time owes him more than the amount thereof, and he gives it credit therefor.
    8. Motion for Nonsuit—Submission of Facts.
    Where defendant moves for nonsuit and direction of verdict, without requesting submission of anything to the jury, questions of fact will be deemed submitted to the court, and decided adversely to defendant, by direction of a verdict for plaintiff.
    Action by Miranda Miller against Thomas J. Reynolds. A verdict was rendered in favor of plaintiff, and defendant moves for a new trial on exceptions ordered to be heard at general term in the-first instance.
    Denied.
    Argued before LEWIS. BRADLEY, and WARD, JJ.
    Eugene Van Voorhis, for plaintiff.
    E. A. Nash, for defendant.
   BRADLEY, J.

In February, 1891, Ransom H. Miller and the plaintiff, his wife, joined in a conveyance to the defendant of certain real estate at the price of $22,000, and as part of the consideration the defendant executed and delivered a promissory note for $6,000, payable to the plaintiff on July 15th, and signed to it the name of “Trotter Refrigerator Company, by T. J. Reynolds, Prest.”" This action is founded on the charge that the defendant had no-power or authority to make the note in the name of or for that company, and to recover, as the consequences, the damages sustained by the plaintiff. When he made the note there was an implied warranty on the part .of the defendant that he had authority to do it for and in the name of the company, and, if he was without authority to do so, he became liable upon such warranty for the damages resulting from the breach. Baltzen v. Nickolay, 53 N. Y. 467; Taylor v. Nostrand, 134 N. Y. 108, 31 N. E. 246. Such liability, however, does not accompany the transfer of a note so made, unless the claim founded upon the warranty is also assigned to the holder to whom the note is transferred. Battle v. Coit, 26 N. Y. 404. As-the title to the land was in Ransom H. Miller up to the time of such conveyance, it is urged that the plaintiff has no right of action upon such implied warranty of the defendant. This objection to-her right of action might be effectual if she could have asserted no-interest in the land conveyed. But it seems that she declined to join in the conveyance, and thus relinquish her inchoate right of dower in the premises without receiving the consideration expressed in the note, and that it was taken payable to her as the consideration of her execution of the deed of conveyance to the defendant. In making the sale and the conveyance in which she joined, the husband may be deemed to have acted in behalf of the plaintiff as well as for himself; and therefore liability incurred by the defendant upon such warranty may be deemed to have inured to the benefit of the plaintiff, and to have become available to her.

It is insisted on the part of the defendant that he had authority to make the note in the name of the company. This contention is founded upon the fact that he was the president, and had been constituted the manager, of the company, and to that end a contract had been made between him and. the refrigerator company, whereby he was given substantially the entire charge of its business up to January, 1892, with direction to pay from its proceeds a reasonable compensation to himself, not exceeding $100 per month, and to pay and discharge all the indebtedness of the company due to him, or upon which he was in any manner liable as its surety. At the time of making the note the indebtedness of the company to the defendant exceeded the amount of it. And he gave evidence tending to prove that he credited the company with the amount of the note. The purchase of the real property of Miller by the defendant had no relation to the business of the company, and the fact that he gave it credit for the amount of the note did not charge it with liability upon the note without the adoption of it by the company. This it did not do, but by the receiver of its property, after-wards appointed, the note was repudiated. It seems quite clear that the defendant derived from the contract before mentioned between him and the company no authority to make the note in question.

The defendant also claims that the note was paid by transfer made by him to Ransom H. Miller of the property of the company, in part consideration of which Miller agreed to surrender up the note. Barring all right of the plaintiff to withhold the note, it is not seen that the evidence requires the conclusion that Miller made any effectual promise to surrender the note in consideration of such sale or transfer to him. Negotiation with that view was had between them, and a written bill of sale was made by the defendant in the name of the company to Miller off the property of the company at the price of $16,154.33, the amount due from the company to the defendant. After deducting from this the amount of the $6,000 note, and interest, there is left a balance of $10,046.33, for which Miller gave the defendant his notes. In the view taken of the case, it is not necessary. to determine whether or not the defendant had, under his contract with the company, the right to make the sale which he undertook to make to Miller. The evidence of the latter is to the effect that the sale and purchase were not to be perfected unless the consent to it was given by certain stockholders of the company, and that they refused to consent to it, and advised Miller that the defendant had no right to make it, and that thereupon Miller declined to complete the purchase, refused to deliver the $6,000 note to the defendant, tendered back to him the bill of sale, and demanded the surrender of the notes he had made to the defendant. While there was a conflict in the evidence upon the subject, there was that which permitted the conclusion that the sale of the property of the company as between the defendant and Miller was not perfected by reason of the failure of the condition before mentioned upon which Miller had agreed to complete the purchase. The motion for nonsuit was therefore properly denied, and, since the case was tried as presenting questions of law only, counsel, having moved for nonsuit, and for direction of a verdict, without requesting the submission of anything to the jury, the question of fact must be deemed to have been submitted to the consideration of the court, and disposed of by it adversely to the defendant in directing the verdict rendered by the jury. Winchell v. Hicks, 18 N. Y. 558; Dillon v. Cockcroft, 90 N. Y. 649.

The amount of damages recovered was warranted by the evidence; and there was no error, to the prejudice of the defendant, in any of the rulings at the trial, to which exceptions were taken.

The motion for a new trial should be denied, and judgment directed for the plaintiff on the verdict. All concur.