Case Name: M. H. MARCUS & BRO. v. NATIONAL FILM DISTRIBUTING CO.
Court: New York Supreme Court, Appellate Term
Jurisdiction: New York
Decision Date: 1912-05-03
Citations: 135 N.Y.S. 37
Docket Number: 
Parties: M. H. MARCUS & BRO. v. NATIONAL FILM DISTRIBUTING CO.
Judges: 
Reporter: West's New York Supplement
Volume: 135
Pages: 37–39

Head Matter:
(76 Misc. Rep. 429.)
M. H. MARCUS & BRO. v. NATIONAL FILM DISTRIBUTING CO.
(Supreme Court, Appellate Term.
May 3, 1912.)
1. Corporations (§ 425*)—Authority of Officer—Execution of Notes— Estoppel of Corporation.
Where, in an action by the innocent purchaser of a check given in the name of a corporation by its treasurer, there was no evidence that the plaintiff purchased the check with knowledge of any previous transac tions between the payee and the corporation, the plaintiff could not set up that the treasurer had implied authority to execute the check because he had previously executed and delivered similar checks to the payee.
tor other cases see same topic & § number In Dec. & Am. Digs. 1907 to date, & Rep'r Indexes
[Ed. Note.—For other cases, see Corporations, Cent. Dig. §§ 1697-1701, 1705; Dec. Dig. § 425.*]
2. Corporations (§ 432*)—Officers—Negotiable Instruments—Execution.
An innocent holder of a check given in the name of a corporation by its treasurer must prove the authority ,of the treasurer to give the instrument; the treasurer as such having no implied power to execute and deliver negotiable instruments.
[Ed. Note.—For other cases, see Corporations, Cent. Dig. §§ 1717, 1718, 1724, 1726-1735, 1737, 1743, 1762; Dec. Dig. § 432.*]
♦For other cases see same topic & § number in Dec.- &■ Am; Digs. 1907 to date, & Rep’r Indexes
Appeal from Municipal Court, Borough- of Manhattan, First District.
Action by M. H. Marcus & Bro., a corporation, against the National Film Distributing Company. From a judgment for plaintiff, defendant appeals. Reversed, and new trial ordered.
Argued March term, 1912, before GUY, LEHMAN, and BI-JUR, JJ. . ■
Benjamin F. Feiner, of New York City (Nathan Baffin, of New York City, of counsel), for appellant.
Aaron Honig, of New York City, for respondent.

Opinion:
GUY, J.
The plaintiff, who is a bona fide holder for value, brings suit upon a check bearing the name of the defendant corporation, and underneath said name is the signature "Israel J. Ablowich, Treas." The evidence shows that the signature is the signature of the treasurer of defendant corporation, and that the check was executed and delivered by the treasurer of the defendant to the payee with the understanding and agreement that the check would not be paid unless countersigned by the vice president of the defendant corporation, and an agreement on the part of the payee that he would present it to the vice president and obtain the countersignature of the vice president before using the same. The evidence also shows that the by-laws of the corporation were amended about three weeks before the making of the check in suit, so as to provide that all checks should be countersigned by the vice president of the corporation, that this fact was known to the payee of the check in .suit, and that he had previously received checks from the treasurer of the corporation, which were so countersigned by the vice president. The evidence further establishes that, prior to the adoption of the amendment to the by-laws providing for such countersigning of checks, the treasurer had, during a long course of business with this payee, given him checks signed only by the treasurer, which checks were subsequently signed by the defendant corporation.
The main ground of appeal urged by the appellant is that the plaintiff failed to show any authority in the treasurer to execute and deliver the check in suit. The respondent urges that, in view of the previous course of dealings between the corporation and the payee, and the fact that the payee had, previous to the adoption of the amended by-laws, been paid in checks signed only by the treasurer, there was an implied authority in the treasurer to execute and. deliver such checks, signed only by himself as treasurer, without any countersigning by the vice .president. But it does not appear herein that the plaintiff, prior to purchasing or cashing the check in suit, had any knowledge of such previous transactions between the payee and the defendant, and it cannot be urged that the defendant, so far as the plaintiff is concerned, is estopped from denying the authority. .
The only remaining question is whether there is any presumed authority in the treasurer of the corporation to sign checks, or other negotiable instruments, as incidental to the, general powers of his office, which would relieve purchasers of such instruments from the duty of inquiring into the authority of the person executing and issuing the same. It is urged by the respondent that the treasurer was also the manager of the corporation; but it does not appear that this fact was ever brought to the knowledge of the plaintiff before purchasing the check in suit, so as to establish any principle of estoppel against the defendant.
I do not think the office of treasurer carries with it any implied power to execute and deliver negotiable instruments in the name of a corporation, regardless of the provisions of the by-laws; and it appears to be the established rule that, as to negotiable instruments alleged to have been issued by a corporation, any holder or purchaser thereof is presumed to have notice that it must be taken subject to proof of authority on the part of the person by whom it purports to have been made, and that the plaintiff, in an action brought upon such an instrument, must affirmatively prove the authority of the officer signing the instrument. The Court of Appeals, in People's Bank v. St. Anthony, 109 N. Y. 512, 17 N. E. 408, held:
"Proof that a promissory note purporting to be made by a corporation was signed by its president and secretary does not show that it is the note of the corporation, without proof that it was made by its authority."
The plaintiff has failed to show either actual or implied authority in the treasurer to sign and deliver the check in suit, without the countersignature of the vice president, and has, therefore, failed to establish the allegation of his complaint that the defendant made, executed, and delivered the check in suit.
The learned trial court, therefore, erred in directing a verdict in favor of the plaintiff, and the judgment must be reversed, and a new trial ordered, with costs tcr the appellant to abide the event. All concur.