Court Opinion

ID: 5505904
Source: CourtListenerOpinion
Date Created: 2022-01-10 03:12:46.571024+00
Date Added: 2024-06-11T08:34:02.933071
License: Public Domain

FOLLETT, J.,
(dissenting.) It is not asserted in behalf of the ■plaintiff that the defendant authorized its president to issue the *1060warehouse receipt, by which it agreed to deliver, on demand, 172 bales of cotton which it had not received. The receipt was a fraud, and, as between Stone, to whom it was issued, and the defendant, it was void. The burden was on the plaintiff to show that it did not stand in the shoes of Stone, and before a recovery can be had the plaintiff must show (1) that it is a holder in good faith; and (2) that the defendant is estopped from denying its liability by some act or omission of its directors or managing officers, relied on by the plaintiff when it acquired the receipt. It is a general rule that a principal is not bound by a contract executed by an agent in favor of himself. Story, Ag. 10, 11, 210, 211; Neuendorff v. Insurance Co., 69 N. Y. 389; Voltz v. Blackmar, 64 N. Y. 440; Pratt v. Insurance Co., 130 N. Y. 206, 29 N. E. 117; Bank of New York v. American Dock & Trust Co., 70 Hun, 152, 24 N. Y. Supp. 406; Morse, Banks, § 99. It appeared on the face of this receipt that the president of the defendant assumed to bind his corporation for his own benefit, and the plaintiff’s cashier testified that he knew when he took the certificate that M. W. Stone, president, and M. W. Stone, to whom the receipt was given, was the same person. So the plaintiff had knowledge that it was a contract which Stone had no right to make, and it took the receipt at its peril. Claflin v. Bank, 25 N. Y. 293; Dabney v. Stevens, 2 Sweeney, 415, affirmed 46 N. Y. 681; West St. Louis Sav. Bank v. Shawnee County Bank, 95 U. S. 557; Mor. Corp. §§ 517-606.
The case is barren of evidence tending to show that the plaintiff received this warehouse receipt on the faith of any act done or omitted by the directors or the managing officers of the defendant. Facts which existed and had not come to plaintiff’s knowledge, and were not relied on by it, form no basis for an estoppel in pais. A person is not estopped by conduct unless his conduct was known to and relied on by the person asserting the estoppel. The plaintiff cannot rely upon the acts of Stone, nor upon his statement made in connection with this transaction, for he was then acting in his. individual capacity, for his own benefit, and not as the president of the defendant. He could not act in both capacities in the same transaction. Moores v. Bank, 111 U. S. 156, 4 Sup. Ct. 345. I think the plaintiff took this certificate with notice of its infirmity, and that the defendant is not estopped from denying that it was. issued without authority. Stone was the vice president of the defendant from 1876 to 1890, and president from the latter date until March 27, 1891, when he died. In 1881, Stone, as vice president, issued to himself two receipts .for cotton, and in 1886 three receipts, for cotton, all of which were regularly entered on defendant’s books. It is not shown that the issuance of these receipts was authorized,, nor that the fact that they had been issued ever came to the knowledge of the board of directors, or of any officer except the secretary. It is asserted that from this evidence the jury might have found that Stone was authorized to issue receipts to himself for cotton actually delivered. I think the fact that five receipts were issued by Stone in his own behalf in fifteen years, during which time many thousand receipts were issued, is insufficient evidence to warrant a jury in finding that.the defendant had authorized Stone to issue receipts-*1061to himself. It seems to me that Bank of New York v. American Dock & Trust Co., 70 Hun, 152, 24 N. Y. Supp. 406, is decisive of this case, and that the judgment should be affirmed, with costs.