Case Name: THE BULL'S HEAD BANK, Plaintiff, v. ANDREW J. McFEETERS, et al., Defendants
Court: New York Superior Court
Jurisdiction: New York
Decision Date: 1873-05-01
Citations: 9 Jones & S. 215
Docket Number: 
Parties: THE BULL’S HEAD BANK, Plaintiff, v. ANDREW J. McFEETERS, et al., Defendants.
Judges: 
Reporter: Reports of cases argued and determined in the Superior Court of the city of New York
Volume: 41
Pages: 215–219

Head Matter:
THE BULL’S HEAD BANK, Plaintiff, v. ANDREW J. McFEETERS, et al., Defendants.
Before Curtis, and Sanford, JJ.
Decided, May 1, 1873.
A promissory note made by a party, payable to a firm or copartnership name, and passed to a person, who assumes to be a member of the firm named as payee, is valid in the hands of innocent third parties, who purchased the note for value, and before maturity, against the makers, and also against the party to whom the note was passed by the makers, and who endorsed the same, with the fictitious firm’s name. The latter is liable as an endorser.
The statute that prohibits the transaction of business by any person in the name of a firm, tha1- does not represent any real partnership or partners (Laws of 1833, chap. 381), and the cases of Swords v, Owens (84 Superior Ot. 377), O’Toole ®. Games (8 Supreme Ot. 93), do not affect the facts or the law in this case.
At the trial a verdict was direc'ed for the plaintiff for six hundred and thirty-nine dollars and seventy-eight cents, subject to the opinion of the court at general term.
The plaintiff recovered the verdict against the defendants, as makers of a promissory note, to the order of Willard Felt & Co,
The cause was heard before a court and jury, upon the following facts, which were agreed to, and submitted as the facts upon the issues made by the pleadings.
1st. It is agreed that the note set forth in the complaint was signed by McFeeters, Ennis and Carpenter, and passed to Willard L. Felt.
2d. It is agreed that Willard L. Felt, before the maturity of said note, signed upon the back of the same the name “Willard Felt & Co.,” and passed the same to the plaintiff for value.
3d. That the same was duly presented for payment and duly protested for non-payment.
4th. That the plaintiff is a corporation as alleged in the complaint, and that the defendants McFeeters, Ennis and Carpenter were co-partners as alleged in the complaint.
5th. It is agreed that at the time of the above-transactions there was no such copartnership or company as Willard Felt & Co., or Willard Felt & Company, and never had been such company, and that he was carrying on and transacting business, including that set forth in the complaint and including the receiving and endorsing the said note under the firm-name and designation of Willard Felt & Co., and that the designation “ & Co.” did not then and there represent an actual partner nor partners ; and that said Willard L. Felt was carrying on business in the city of New York, and that he was not a commercial copartnership located and transacting business in foreign countries ; neither had he used such name of Willard Felt & Co., and the business conducted by him as at any time thereafter continued by some one, nor by any copartner, nor by the assigns or appointees of such copartner; neither was any certificate signed and acknowledged before any officer of law authorized to take acknowledgments of deeds, declaring the person dealing and trading under said name of Willard Felt & Co., with his place of abode, nor was such certifícate filed with the clerk of the city and county of New York, in which his principal place of business then and there was, neither was the same published in any newspaper in this State ; neither had said Willard L. Felt business relations with foreign countries.
6th. It is agreed that Richard Williamson, who was at the time of the above transaction president of the plaintiff and who transacted the business of the same, was ignorant of the fact alleged, that Willard Felt & Co. did not represent a firm or company.
Moody B. Smith, for plaintiff.
Richard H. Huntley, for defendant.

Opinion:
By the Court.—Curtis, J.
The statute prohibits the transaction of business by any person in the name of a partner not interested in the firm, and requires that where the designations " and Company " or " & Co." are used, that it shall represent an actual partner or partners. An offence against these provisions is a misdemeanor, punishable by fine (Session Laws, 1833, chap. 381).
Those defendants who are the makers of the note claim, that in consequence of the designation, "Willard Felt & Co." used by Willard L. Felt, for carrying on his business in New York, and the note being made payable to the order of " Willard Felt & Co." that such endorsement by Willard L. Felt, was not one through which the plaintiffs could derive a title to the note, even though they paid value for it, before maturity and without notice that this designation was unlawful.
These defendants, the makers of the note, insist that the payee was under a legal disability to act, and was without capacity to thus make an endorsement binding in law. The defendants cited the cases of Swords v. Owen (34 Sup'r. Ct. R. 277), and O'Toole v. Garvin (8 Supreme Court R. 94), as determining that a person in the position of Willard R. Pelt could not make a contract binding in law. These cases hold, that where parties transacting business under an unauthorized name, sue to recover for services rendered, or for goods sold and delivered, there can be no recovery, because such rendition of services or sale and delivery of goods are transactions within the prohibition of the statute. The statute by its prohibition deprives the parties violating it through the use of a false designation, from recovering in a court of justice the fruits and proceeds of their own unlawful acts.
There is nothing in the decisions, orín the language of the statute, that implies that persons using this unlawful designation, would not be liable for goods purchased by them, or for services rendered at their request, or for money loaned to them. The object of the statute is to prevent persons from obtaining property or credit under a false pretence, and the courts will not give their aid to a man to enforce transactions made by him, in violation of this law.
The construction claimed by the defendants, is in effect that the courts should enable the violators of the law, to profit by their unlawful acts. The just interpretation of the law is, that while a person is forbidden to transact business under a prohibited title, such prohibition does not deprive innocent third parties dealing with or taking title through him, of their remedy against him. The penalty of the statute is limited to the parties violating it. It devolves no duty on dealers and the public to inquire whether it has been complied with, nor does it impose any penalty upon them for omitting to do so.
Willard L. Pelt, by his wrongful act in the form of his endorsement, of the note in question, cannot affect the right of the plaintiff to recover as against him. He is bound by Ms representation, the endorsement is his, for in effect he had the note drawn to his order, though he used a deceptive designation to have it so drawn, and used the same deceptive designation in endorsing it to the plaintiffs. The plaintiffs simply lose the benefit of a recourse against the supposed person or persons he designated under the words "and Co." But they lose no recourse against him, by reason of the false pretense in his endorsement, of being in partnership with others.
The makers of the note are not prejudiced by this act of Willard L. Felt. The title to the note passed by his endorsement to the plaintiff ; and the plaintiff stands in the position of innocent third parties purchasing the note before maturity for value, and protected by the statute and the law merchant in their remedy against both makers and endorsers.
There should be a judgment for the plaintiff upon, the verdict.
Sanford, J., concurred.