Case Name: Hector M. Hitchings, Resp't, v. The St. Louis, New Orleans & Ocean Canal & Transportation Co., Impl'd, App'lt
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1893-03-17
Citations: 52 N.Y. St. Rep. 247
Docket Number: 
Parties: Hector M. Hitchings, Resp't, v. The St. Louis, New Orleans & Ocean Canal & Transportation Co., Impl'd, App'lt.
Judges: 
Reporter: New York State Reporter
Volume: 52
Pages: 247–249

Head Matter:
Hector M. Hitchings, Resp't, v. The St. Louis, New Orleans & Ocean Canal & Transportation Co., Impl'd, App'lt.
(Supreme Court, General Term, First Department,
Filed March 17, 1893.)
I. Corporations—Indorsement op note by—Ratification.
In an action on a note against the payee, a corporation, as indorser, it appeared that C , defendant's president, indorsed the note in its name to 5., who returned it to C. after indorsing it, and 0. then indorsed it individually to plaintiff; that after U.’s first indorsement three of the five directors of defendant, at an impromptu meeting, without any notice to the other directors, passed a resolution that the making and indorsing of certain notes by the president in the name of the company, through and to 5., be and are hereby approved. C. testified that he paid defendant all or nearly all of the proceeds of the note. Held, that a verdict for plaintiff would not be disturbed.
3. Same—Evidence.
In such case, C.’s checks, which to a considerable extent seemed to contradict the testimony of defendant’s treasurer, in reference to the various transactions referred to, are admissible in evidence, although not directly connected with the transaction in issue.
U. Same—Bona fides.
Plaintiff’s good faith in accepting the note being challenged, he had a right to put in evidence declarations of defendant’s president, which tended to show good faith, although they were made long after he indorsed the note to plaintiff.
Appeal by defendant, an insolvent corporation, from a judgment entered upon the verdict of a jury in an action upon a promissory note.
George Walton Green, for app'lt; H. M. Hitchings (James M. Smith, of counsel), for resp't.

Opinion:
Van Brunt, P. J.
This action was-brought upon a note made by John Stilwell & to the order of the defendant company, which was indorsed by P. J. Claassen, the president of the defendant company, in its name, and by James A. Simmons and P. J. Claassen individually, and by said Claassen transferred to the plaintiff on the 21st March, 1890, before maturity. The answer was, substantially, a general denial. It was claimed upon the trial, by the defendant, that the president of the defendant had no authority to indorse promissory notes for it. In support of such authority a resolution duly passed by the defendant's board of directors on the 2d of October, 1889, was offered in evidence, by which it was resolved, " That all the banking business for and in behalf of this company be, and is hereby, vested in the president, Gen. Peter J. Claassen, who is hereby authorized to sign all checks, drafts, and monetary obligations, of any kind, against and for any bank deposits, wheresoever made, in the company's name," and also a resolution claimed to. have been passed on the 30th of December, 1889, by which it was " resolved, that the making of certain notes by the president of this company in the name of the company, through and to James A. Simmons, and also the indorsing by the president, in the name of the company, of certain notes through and to James A. Simmons, be, and they are here by, approved." The plaintiff also examined, said Olaassen as a witness in his behalf, and Olaassen testified that he gave a check to the canal company for the proceeds, or near the proceeds, of that note, and, again, that he knew he gave the proceeds of that note to the canal company, and that, after the discount of the promissory note by him, he paid out the note to the plaintiff. The plaintiff also introduced in evidence the declarations made by Olaassen to him at the time of the receipt of the note. The introduction of this testimony was duly objected to, and the objection overruled, and defendant duly excepted. The case having been submitted to the jury, and a verdict rendered for the plaintiff, and a motion made for a new trial having been denied, from the judgment and order thereupon entered this appeal is taken.
It is probably true that the first resolution above referred to did not authorize indorsements of commercial paper by the president of this corporation on its behalf, as it would seem that the authority given by that resolution was to sign checks, etc., against any bank deposits which might stand in the company's name, and that this was the extent of the authority conferred by that resolution. It is also urged that the second resolution was no ratification of the indorsement already made, because there was no legal meeting of the board. It is to be observed, in passing, that it is claimed by the counsel for the appellant that this resolution was allowed in evidence against the objection of the defendant that there was nothing to show a properly called meeting. But we have examined the case in vain to find any such objection spread upon the record: At the time the resolutions were offered, it appeared that they were taken from the minute books of the corporation. It is true that a general objection was taken to their admission, and the objection overruled, and the resolutions were read. But the record also contains an admission by defendant's counsel that, if the witness who was then being examined stated that they were copies, they might go in, and the witness thereupon testified that they were copies.
Subsequently, upon the cross-examination of the witness producing the resolutions, it appeared that the second resolution was passed at what was called an " impromptu meeting," three directors being in the office, and without any notice to the other two directors the resolution was passed. The weight to be given to that resolution was, therefore, a question which was to be determined during the progress of the trial. The defendant's counsel asked the court to charge the jury that a board of directors had no authority to pass a vote authorizing the use of corporate indorsements without notice to each member of the board at which such vote was passed.' The court said: " That is the general rule, but you may take into consideration the course of dealing of a particular corporation. With that qualification I charge the proposition to which statement of the law the defendant took no exception. There seems, therefore, to have been no errors committed upon the part of the court, either in the admission of the resolution in question, or in the submission of the question to the jury, which are raised by any exception taken by the counsel for the defendant.
There is also, in the case, positive evidence of the president of this corporation that he discounted the note, and that the corporation received the money therefor, which, if the jury believed,, made the president a bona fide holder of the note, and he could transfer it to anybody to whom he might see fit. In connection with- this testimony a certain check drawn by the witness on Keene & Co. was shown to him. He testified that he could not say positively that that was the check he gave for the note, but it looked to him that it was a check he gave on account of the proceeds of the note, whereupon said check was offered in evidence without, objection. Subsequently the plaintiff's counsel offered some other-checks drawn by Claassen on Keene & Co. to the order of one-Bailey, the treasurer of the defendant, which were objected to as not being properly proved; that they simply showed that they were checks drawn by Claassen on Keene & Co., and had no connection with the transaction in issue, which objection was overruled, and at a subsequent stage of the case, after additional testimony had been taken, the checks were put in evidence without, objection.
The only point which is now presented by the appellant is that the check which Claassen thought he might have used with which to discount the note bears no official stamp or evidence of cancellation, nor was there any evidence to show that it had ever been paid, and, therefore, it was error to admit it in evidence. But, as already seen, no such objection was taken at the time the check was offered in evidence, it being read without objection. As ttithe other checks, they seem, to a considerable extent, to have contradicted the testimony of Bailey, given upon the stand, in reference to his connection with the various transactions, and, therefore, somewhat affected his testimony in reference to his contradiction of' the evidence of Claassen that he had paid to the corporation the-money upon the discount of the note in question.
The only other objection which it seems necessary to notice is the claim that it was error to admit the declarations of Claassen, made-long after the alleged indorsement, as admissions against the defendant. We do not understand that such declarations were received as admissions against the defendant. The good faith of the plaintiff in the acceptance of the note was challenged upon the-trial, and he had a right to show the circumstances under which he-had taken the note, and the inquiries he made in regard to its-regularity; and these inquiries, made of the president of the-defendant, were certainly competent, if not as admissions upon the part of the defendant, as showing the bona fides of the plaintiff in the acceptance of the note.
The questions involved were submitted by the court to the jury without exception upon the part of the defendant, and we see no reason for disturbing the verdict rendered by the jury. The judgment and order appealed from should be affirmed, with costs.
O'Brien and Follett, JJ., concur.