Court Opinion

ID: 5235863
Source: CourtListenerOpinion
Date Created: 2022-01-06 17:08:57.114612+00
Date Added: 2024-06-11T08:27:43.604499
License: Public Domain

Dowling, J. (dissenting):
I deem the conditions under which defendant received the checks in question for the personal account of E. Moch sufficient to give it notice of their diversion and unauthorized use by Moch, and to put them upon inquiry as to his authority to deal with the checks as his own. The name “ E. Moch Company ” did not necessarily import that the plaintiff was a corporation, though before the passage of chapter 638 of the Laws of 1911 (amdg. Gen. Corp. Law [Consol. Laws, chap. 23; Laws of 1909, chap. 28], § 6) that might well have been deemed the ordinary meaning to be attached to such a title. (See, also, Gen. Corp. Law, § 6, as amd. by Laws of 1912, chap. 2, and Laws of 1913, .chap. 24.) If it was to be regarded as a corporation, then the indorsement of the corporate name upon the checks was unaccompanied by any indication that such indorsement had been made by any officer *133thereof. If the plaintiff was not a corporation bnt was a trade name assumed by some individual, there was no manner of indorsement to indicate that it was so signed by the person using such name. The defendant had upon its books the personal account of “E. Moch” and no account of “E. Moch Company.” The indorsement both of the plaintiff’s name and of Moch himself the defendant knew to be in Moch’s personal handwriting. The diversion to Moch’s personal account of checks made to a third party should have put defendant upon inquiry. Such inquiry would have disclosed at once that plaintiff was a corporation and that under its charter Moch had no power to indorse these checks, but that the same was required under the charter to be done by the treasurer, and that all checks to the order of the corporation were required to be kept in its own bank account. Nor do I think that the defense of ratification was available to the defendant upon the pleadings. The plaintiff was a corporate entity and the fact that Moch owned all or nearly all of its stock did not destroy the existence of the corporation nor affect its relationship with the defendant. The answer of the defendant did not set up any ratification by the stockholders of the plaintiff, but a ratification by its board of directors, which under its charter I think they had no right to do; but the proof that was offered was of a ratification by the stockholders of the plaintiff, and that had not been properly impleaded.
I am, therefore, in favor of affirmance of the judgment appealed from, with costs.
Laughlin, J., concurred.
Judgment and order reversed, new trial ordered, costs to appellant to abide event.