Court Opinion

ID: 5513179
Source: CourtListenerOpinion
Date Created: 2022-01-10 04:25:57.410488+00
Date Added: 2024-06-11T08:34:12.872636
License: Public Domain

By the Court,

Savage, Ch. J.
Several objections are raised to the sufficiency of the first count of the declaration: I. That the defendants had no authority to make a promissory note; 2. That the note described is the note of John Franklin, and not of the defendants; 3. That it is payable to the president and directors of the Life and Fire Insurance Company, and endorsed by the assistant president and secretary, in their own names; and 4. That the Life and Fire have no authority to endorse negotiable paper.
1. It has been decided, that a corporation is liable upon contracts not under seal, made by their authorised agents, (12 Johns. R. 230,) and upon an implied assumpsit, (14 Johns. R. 118, 19 id. 65,) and also upon a promissory note, (1 Cowen, 513.) It is averred in the declaration, that the corporation in making the note, were acting within the scope of the legitimate purposes of their incorporation; upon the face of the declaration, therefore, the court cannot say that the defendants can not make a valid promissory note. If they can make a valid promissory note for any purpose, this note must be held good till some cause shall be shewn why it is not so. By the act of incorporation of the ¡defendants, (Statutes, vol. 5, p. 131 a.) they are authorised *98to make contracts of insurance, but they cannot use their jn any banking operations. They cannot, therefore, make a note intended for circulation as bank paper; but I am not prepared to say that they may not give a note for many purposes, as for office rent, for the payment of a loss, for the payment of their officers, or agents or servants employed by them, and for other considerations. If a note has been given which is unauthorised by law, that should be shewn in the defence.
2. It is said, that the note described in the declaration is the note of John Franklin, not of the defendants. The averments in the count are; That the defendants are a corporation, and one John Franklin being president thereof, and being authorised and acting within the scope of the legitimate purposes of the corporation, on the 1st July, 1823, made a promissory note, and delivered the same to the president and directors of the Life and Fire Insurance Company,-by which the said John Franklin, as president as aforesaid, promised to pay to the order of the president and directors of the Life and Fire Insurance Company, on demand, the sum of $3172,40 with interest, for value received. From this description the note must be in the following form: “ I John Franklin, president of the Mechanic Fire Insurance Company, promise to pay to the order of the president and directors of the Life and Fire Insurance Company, on demand, the sum of $3172,40, with interest for value received. John Franklin.” Or it maybe in this form: “ I promise to pay to the order of the president' and directors of the Life and Fire Insurance Company, on demand, the sum of $3172, 40, with interest for value received. John Franklin, president of the Mechanic Fire Insurance Company.” In neither form can this be said to be the note of the company. In Taft v. Brewster, (9 Johns. R. 334,) the defendants, by the name and description of J. B., T. L. and J. C., trustees of the Baptist society of the town, &c. acknowledged themselves to be bound, &c. The court said, “ It is not the bond of the Baptist church. The addition of trustees to the names of the defendants is in this case a mere descriptio person-arum.” In White v. Skinner, (13 Johns. R. 307,) the con*99tract was in the name of R. S., W. R. and A. H., as directors of the Granville Cotton Manufactory, and signed, “ For the directors, Reuben Skinner.” The court said it was Skinner’s individual .Contract. He should have averred and proved his authority from his co-directors. In this case there is an averment that the president was lawfully authorised ; but it does not appear that he has acted under the authority; he does not say that he signs for the company; he describes himself as president of the company, but to conclude the company by his acts he should have contracted in their name, or at least in their behalf. In Stone v. Wood, (7 Cowen, 453,) the defendant described himself “ as agent of J. and R. Raymond,” but he did not contract in their name: and it was held he was personally liable. So here, though the president, according to the averment in the count, had authority to make a note for the defendants, yet he does not appear to have done so, in a manner to be obligatory upon them. It is unnecessary, therefore, to inquire whether the note was endorsed in such a manner as to authorise an action in the name of the endorsee.
The defendants are entitled to judgment on the demurrer, with leave to the plaintiff to amend on payment of costs. ’