Case ID: ny-st-rep_25/html/0864-02.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Charles F. Wahlig, Pl’ff and Resp’t, v. The Standard Pump Manufacturing Company, Def’t and App’lt.
    
      (City Court of New York, General Term,
    
    
      Filed May 31, 1889.)
    
    1. Corporation—When act of officer ultra vires.
    Defendant being a manufacturing corporation, and not a trading or banking company, had no power to indorse, for the accommodation of another, paper in which it was not interested; and the act of its treasurer in indorsing such paper was ultra vires.
    
    
      ■%. Pleading—Evidence—Competency.
    Defendant offered evidence to prove that the directors never authorized the indorsement of the paper, and the trial judge excluded it. This was error, because in its answer the defendant denied that it had indorsed the paper, which was broad enough to admit evidence of want of authority.
    Appeal from judgment entered on verdict in favor of plaintiff.
    
      John A. Grow, for app’lt; Kaufman & Sanders, for resp’t.
   Per Curiam.

The defendant is not a trading or banking company, but a manufacturing corporation.

It had no power to indorse, for the accommodation of another, paper in which it was not interested. Central Bank v. Empire S. D. Co., 26 Barb., 23; Bank of Genesee v. Patchin Bank, N. Y., 309.

The fact that the indorsement did not concern the defendant’s business, and was made by its treasurer to accommodate Pearl, the maker, sufficiently appears by the evidence. It might be presumed in such a case that the act of the treasurer was ultra ñires. See Brice on Ultra Vires, 139.

But the defendant, not content to rest on this presumption, undertook to prove that the corporation, by its directors, never authorized the indorsement, and the trial judge refused to receive the evidence. This was error. The denial interposed by the defendant, that it had indorsed the note, was sufficiently broad to admit the evidence of want of authority. It put in issue the question, whether the indorsement was a corporate act of the defendant, for which it had made itself liable. True, the defendant, by not ■denying, admitted that the note came into the plaintiff’s possession before maturity and for value (Fleischmann v. Stern, 90 N. Y., 110), but it did not admit that it had ever indorsed the note; on the contrary, expressly denied that allegation. It also affirmatively pleaded the fact that if the name of the defendant appeared on the note as indorser, it was put there for accommodation and without any consideration moving to the defendant, so that the defendant did not waive, but insisted on these two defenses. Upon the entire record and for the reasons stated, the judgment must be reversed and a new trial ordered, with costs to abide the event. _