Case ID: ny-st-rep_42/html/0585-01.html
Source: Caselaw Access Project
Author: {"author": "Dwight, P. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Baldwin’s Bank of Penn Yan, Resp’t, v. William T. Morris, Impl’d, App’lt.
    
      (Supreme Court, General Term, Fifth Department,
    
    
      Filed January 22, 1892.)
    
    Partnership—Authority op partner to endorse notes.
    In an action upon a promissory note endorsed by one member of a legal firm in the firm name, it was claimed that such endorsement was unauthorized and did not bind the other members of the firm. It appeared that the note was a renewal of a s milar note, the proceeds of which were passed to the credit of the firm and were drawn out by checks drawn by the partner who appeals, and that the credits appeared in a bank book kept mainly in the possession of such partner. Held, that even if the endorsement of the original note was unauthorized when made, it had been fully ratified by appellant by the use of the credit which he made, and that such ratification constituted an implied authority to endorse renewals of the same note.
    Appeal by the defendant from an order of the Yates special term, denying his motion for a new trial made on the minutes of ‘ the court, after a verdict for the plaintiff at the circuit.
    
      John Qilhite, for app’lt; M. A. Leary, for resp’t.
   Dwight, P. J.

The action, so far as this appeal is concerned, was on a promissory note for $500, dated February 28, 1883,. made by one Farmer to the order of the Farmer Manufacturing Company, and endorsed by that company, and also by Ealph T.. Wood in the firm name of Wood, Butler & Morris. That firm name represented an existing copartnership, of which Wood and the defendant Monis were members, formed for the practice of the law at the village of Penn Yan, and the question on this appeal is of the authority of Wood to bind the defendant Morris by the endorsement mentioned.

The note was the second renewal of an original note, dated May 5, 1882, made by the same maker, in the same terms, and bearing the same endorsements. The original note was discounted by the plaintiff on the faith of the endorsement of Wood, Butler & Morris, and its avails were placed to the credit of that firm in their account current with the bank on May 5, 1882, and were wholly drawn out within the same month by checks drawn by the defendant Morris for use either of individual members of the-firm or in its business. The bank pass-book of the firm is in evidence. It was kept mainly in the custody of the defendant. Morris, who, by the terms of the articles of copartnership, was to have “ the especial management of the office and keep the details of the business of said firm.” It contains the entry of the note and of its avails to the credit of the firm, under date of May 5, 1882; it shows that on that day, before the entry of the note, the balance to the credit of the firm was $25.52'; that on the same day the defendant Morris drew a check for $124, on the next, day a check for $71, and that before the end of the month,, there having been no further entry on the credit side of the account, he had drawn checks to the extent of an overdraft of $66.60. After this there was never but one more entry in the account to the credit of the firm, viz. : of a note of other parties of about $500, and when that was exhausted the account was. closed.

It was impossible for the jury not to find that the defendant Morris knew that he and his firm were having the benefit of the avails of the note of May 5, 1882, and it was at least permissible, for them to find that he knew or was chargeable with knowledge of the source of that credit to his firm, namely, the endorsement, of the note in the firm name by one of his partners. In other words, the jury was clearly justified in finding that if the endorsement by Wood of the original note was unauthorized when made, it was fully ratified by the defendant Morris by the use which he made of the credit derived therefrom, and that the ratification of that endorsement constituted an implied authority to endorse the renewals of the same note.

This was apparently the theory upon which the learned judge at the circuit submitted the case to the jury. He correctly instructed them that there was no evidence of a ratification of the endorsement of the renewal note. A ratification necessarily follows the act ratified, and implies knowledge of that act; and there is not in this case evidence of such a ratification. But he submitted to the j ury the question whether there was express authority to make the endorsement in question. We would have rather said implied authority; but our difference is only in the name, for the j ury was clearly instructed that the authority spoken of might be implied from the same circumstances as those to which we have referred as constituting a ratification of the original endorsement. The verdict of the jury is equally supported by evidence of an implied as by that of an express authority.

We regard the verdict against the defendant Morris as amply supported by the evidence of his ratification of the endorsement of the original note, and of the authority to be inferred therefrom, as between him and the holder of the note, to endorse the renewal.

The order denying the motion for a new trial should be affirmed.

Order appealed from affirmed.

Macomber and Lewis, JJ., concur.