Court Opinion

ID: 5298393
Source: CourtListenerOpinion
Date Created: 2022-01-08 02:56:46.797358+00
Date Added: 2024-06-11T08:29:02.524225
License: Public Domain

Finch, J.
(dissenting). The exigencies arising out of the circulation of commercial paper do not, in my opinion, require a construction of section 39 of the Negotiable Instruments Law, which predicates upon a mere negative implication, the change of a rule previously well established both in England and in this State and the readoption of a rule deliberately discarded because unjust. Even text writers are divided upon this question. Professor Huff cut, in his book “ The Law of Negotiable Instruments ” (1898) (on p. 316) says: “ It will be observed that the language of the Neg. Inst. Law (§39 [20]), seems to imply that if the agent is not duly authorized he will be liable on the instrument; but it is open to question whether the courts would change a well-established rule of law upon a negative implication.” In 10 American Law Notes, 104, the author, in discussing this very question, states: “ If a change in the common law had been intended it could have been accomplished unequivocally by adding a few words, namely, ‘ but he is liable on the instrument, if he was not duly authorized; ’ and courts constantly reason that where, had a change been intended, ‘ it would have been easy to say so,’ it will not be presumed as a matter of inference.” Professor Ames, while assuming that the rule may have been changed if the court *387is so to act upon implication, says: “ This is unjust and a departure from the English Act and the almost uniform current of judicial decisions by which the agent is hable only on his implied warranty of authority.” Judge Selden in White v. Madison (26 N. Y. 117) shows how this rule, which it is now sought to restore, was formerly the rule in this State but was discarded because productive of so much injustice: “ The defendant, having executed the note in the name of Snow, without authority, would be held liable, according to several decisions in this State, as the maker of the note. (Dusenbury v. Ellis, 3 Johns. Cases, 70; White v. Skinner, 13 Johns. 307;Feeter v. Heath, 11 Wend. 477; Rossiter v. Rossiter, 8 id. 494; Meech v. Smith, 7 id. 315; Palmer v. Stephens, 1 Denio, 480; Plumb v. Milk, 19 Barb. 74.) The authority of these cases has been somewhat shaken by the remarks of the judges who delivered opinions in the case of Walker v. The Bank of the State of New York (5 Seld. [9 N. Y.] 582); and in England, as well as in several of the United States, the principle upon which they rest, if they are supposed to present the only ground of liability of the agent, has been substantially repudiated. (Collen v. Wright, 40 Eng. L. & Eq. 182.) * * * ”
In support of the construction of section 39 contended for, the respondent has quoted statements of the commissioners who framed the act. The courts, however, must be guided by the language of the statute as enacted by the Legislature and not by the subsequently expressed statements of the preconceived ideas of the draftsmen. ( U. S. v. Trans-Missouri Freight Assn., 166 U. S. 290, 318; Pennsylvania R. R. Co. v. International Coal Mining Co., 230 id. 184, 198.)
The result here reached is strengthened by a comparison of the limit of recovery in an action for intentional fraud and deceit “ to indemnify the party injured. All elements of profit are excluded.” (Reno v. Bull, 226 N. Y. 546, 553.) While the recovery is so limited to the actual damages suffered in an action for intentional fraud and deceit, yet in the case at bar the appellant may be penalized and the plaintiff allowed to profit, by the recovery of the full amount of the note. This may be out of all proportion to the damage suffered, and the maker of the note may have innocently assumed that he possessed the necessary authority until the court adjudged otherwise.
The aggrieved party is made whole if he is awarded the actual damages sustained by reason of not receiving the benefit of the contract which he was induced to believe he was making. The complaint in the case at bar thus fails to state a cause of action against the appellant upon the contract. It also fails to state *388a cause of action upon the theory of breach of warranty of authority. It lacks essential allegations of representation of authority by the appellant and reliance thereon by the plaintiff to plaintiff's damage.
For the foregoing reasons, I dissent from the holding and vote to reverse the order appealed from.
Order affirmed, with ten dollars costs and disbursements, with leave to defendant L. J. Lippmann, individually, to answer within twenty days from service of order upon payment of said costs and ten dollars costs of motion at Special Term.