Case Name: The Bank of New York National Banking Ass'n, Pl'ff, v. The American Dock & Trust Co., Def't
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1893-06-30
Citations: 53 N.Y. St. Rep. 905
Docket Number: 
Parties: The Bank of New York National Banking Ass’n, Pl’ff, v. The American Dock & Trust Co., Def’t.
Judges: 
Reporter: New York State Reporter
Volume: 53
Pages: 905–907

Head Matter:
The Bank of New York National Banking Ass’n, Pl’ff, v. The American Dock & Trust Co., Def’t.
(Supreme Court, General Term, First Department,
Filed June 30, 1893.)
1. Warehousemen—Irregular receipts—Bona rides or holder.
Where a warehouse receipt acknowledging the receipt of goods from, a person who is the president of ■ the warehousing company and signed by such president is_ presented by him for an advance of money thereon, the person to whom it is presented is put upon inquiry and is bound to verify its genuineness; he cannot rely upon the president’s statements.
2. Same—Evidence.
In an action upon such receipt, which in fact was false, it is not error to exclude evidence of the statements made by the officer at the time of the loan, as any representations made by him at such time are his individual statements simply, and not official statements binding on the company.
Motion' by the plaintiff for a new trial upon exceptions ordered to be heard in the first instance at general term.
John B. Whiting, for app’lt; Thaddeus D. Kenneson, for resp’t.

Opinion:
Barrett, J.
The main question here is whether the plaintiff is to be treated as a bona fide holder of the warehouse receipt up-on the faith of which it advanced money to the defendant's president, Stone. This warehouse receipt was signed " M. W. Stone, Pres.'t," and it acknowledged the receipt on storage at the American docks, for account of M. W. Stone, of 162 bales of cotton. This acknowledgment was false. The company .had received no •such cotton. Stone had simply prepared and signed the paper to raise money thereon for his own private purposes.
There is no question here of general authority. Both the president and the treasurer were expressly authorized by the board of directors to sign warehouse receipts. If, in the present case, therefore, this particular receipt had been made out in the name of some one disconnected with the company, and the plaintiff had innocently and in good faith advanced money to such person thereon upon the strength of official representation, a recovery could doubtless have been had. There is ample support for this proposition in the case of Fifth Avenue Bank v. Forty-second Street & Grand Street Ferry R. Co., decided by the court of appeals .and reported in 33 N. E. Rep., 378; 50 St. Rep., 712. But here the receipt was made out in the name of the president and was signed by him. The plaintiff knew that the Stone named in the receipt was the same person who, as president,- had sigped it. The implication was that the defendant's president had attempted to contract with himself as an individual. The instrument not only acknowledged the receipt of the goods, but specified the terms and conditions of the pretended bailment. Upon the presentation of such a document to be used for Stone's personal benefit, the plaintiff was at once put upon inquiry and was bound to verify its genuineness in a proper way. It certainly could not rely upon the representation of the officer whose very appearance in the transaction was what called for the inquiry. Any representation that he made would necessarily have been individual and not official. The law does not recognize his acting in the dual capacity. He cannot at the same moment borrow the money as an individual and as an officer represent the genuineness of the security.
The case on this head is directly within the principle enunciated in Manhattan Life Insurance Company v. Forty-second Street & Grand Street Ferry R. Co., 46 St. Rep., 130; and in Moores v. Citizens' Nat. Bank of Piqua, 111 U. S., 164.
There is a plain distinction between the present case and those cases where the instrument simply acknowledged the officer's interest in the company. This distinction was pointed out in Titus v. The President, etc., 5 Lans., 250; S. C., 61 N, Y., 257, and the rule laid down in Claflin v. Farmers & Citizens' Bank, 25 N. Y., 295, was not questioned. That rule, in substance, is, that when what purports to be the company's contract shows upon its face the officer's use of his official position for his own benefit, every one to whom the contract comes is put upon inquiry. See, also, Nuendorff v. World Mutual Life Insurance Co., 69 N. Y., 398; Pratt v. Dwelling House Mutual Life Insurance, 53 Hun, 101; 25 St. Rep., 784; Farrington v. South Boston R. R. Co., 150 Mass., 406.
The plaintiff was permitted to show the actual transaction between it and Stone, that is, the loan of the money, relying upon the warehouse receipt and in ignorance of its character. What was excluded was Stone's representations. But these representations, as we have seen, were not official. The representations were made at the bank, when Stone applied for the loan, and were simply his individual statements with regard to his own private business.
Even if admitted, they would not have helped the plaintiff, for nothing that Stone- could have said at the time and under the circumstances would have absolved it from the duty of further inquiry. And no other inquiry was made.
The exceptions should be overruled, and judgment ordered dismissing the complaint, with costs of this application and of the trial.
Van Brunt, P. J., and Follett, J., concur.