Court Opinion

ID: 5509413
Source: CourtListenerOpinion
Date Created: 2022-01-10 03:30:54.377809+00
Date Added: 2024-06-11T08:34:07.748866
License: Public Domain

FOLLETT, J.
It is unfortunate that the record does not disclose under what statute and for what purpose this defendant, a domestic corporation, was incorporated, for it would have enabled the court to deal with known facts, instead of resting its decision on presumptions. So far as we know, no corporations organized under the statutes of this state are authorized to bind the property of their shareholders by accommodation indorsements, except corporations organized under the statutes providing for the incorporation of guaranty and indemnity companies; and we know of no statute authorizing such corporations to make accommodation indorsements without receiving a-valuable consideration. It has been held that banks organized under the statutes of this state have no such power. Bank of Genesee v. Patchin Bank, 13 N. Y. 309; Farmers’ & Mechanics’ Bank v. Butchers’ & Drovers’ Bank, 16 N. Y. 125, 128; Morford v. Bank, 26 Barb. 568. Manufacturing corporations have no such power. Central Bank v. Empire Stone-Dressing Co., 26 Barb. 23; Bridgeport City Bank v. Empire Stone-Dressing Co., 30 Barb. 421; Farmers’ & Mechanics’ Bank v. Empire Stone-Dressing Co., 5 Bosw. 275; Wahlig v. Manufacturing Co. (City Ct. N. Y.) 5 N. Y. Supp. 420; Filon v. Brewing Co. (Sup.) 15 N. Y. Supp. 57. The same rule is held in Massachusetts. Monument Nat. Bank v. Globe Works, 101 Mass. 57; Davis v. Railroad Co., 131 Mass. 258. In the latter case it was also held that a railroad had no such power. Warehousing and security companies have no such power. National Park Bank v. German-American Mut. Warehouse & Security Co., 116 N. Y. 281, 22 N. E. 567. In Connecticut it is held that life insurance companies are without this power. Aetna Nat. Bank v. Charter Oak Life Ins. Co., 50 Conn. 167. In California it has been held that turnpike companies have no such power. Hall v. Turnpike Co., 27 Cal. 256. In Pennsylvania it is. held that corporations organized to hold real estate, mine for and deal in oil, have no such power. Culver v. Real-Estate Co., 91 Pa. St. 367; 1 Mor. Corp. (2d Ed.) §§ 389, 423, et seq.; 4 Thomp. Corp. § 5739 et seq. The learned counsel for the respondent does not gainsay this rule, but urges that the indorsement was not an accommodation one, because the check given by the plaintiff for the avails of the note was payable to the defendant’s order, was indorsed by it, and *898credited to it by the bank where it kept its account. Edward O. Stebbins, defendant’s cashier, was called as a witness by the plaintiff, and testified that he told the plaintiff, when the note was discounted, that the money was not for the defendant, but was for the Industrial & Mining Company, which was not disputed. On the same day two checks were drawn by defendant’s cashier on the bank where it kept its account for the full amount of the avails of the note, payable to “the order of William M. Earl, treasurer,” who was the treasurer of the Industrial & Mining Company. There is no evidence showing that defendant’s cashier was authorized to bind it by an accommodation indorsement, and, it having been shown to be such, which the plaintiff knew before taking the note, the burden was on him to show that the defendant had power to make such an indorsement, and that its cashier was authorized to make this or such indorsements. This burden the plaintiff did not assume, and the evidence is not of a character to authorize the court to presume that the defendant was authorized to make an accommodation indorsement, or that its cashier had power to make such indorsement. The fact that the defendant’s cashier, acting without authority, deposited the avails of the note to defendant’s credit, and on the same day checked it out for the benefit of the Industrial & Mining Company, is of no more significance than though he had taken the money and given it to the latter corporation, or had indorsed the plaintiff’s check to that corporation; and neither a consideration nor an estoppel can be predicated upon these facts. Bank v. Atkinson, 55 Fed. 465, affirmed 27 U. S. App. 88, 10 C. C. A. 87, and 61 Fed. 809. There being no evidence that the defendant was authorized to bind itself by this indorsement, and no evidence that its cashier was authorized to make it, and no evidence upon which an estoppel can be based, the plaintiff failed to establish a cause of action, and the defendant’s exceptions should be sustained, the verdict set aside, and a new trial granted, with costs to the defendant to abide the event.
VAN BRUNT, P. J., concurs in result.