Miners & Merchants' Bank v. Ardsley Hall Co.

Houghton, J. (concurring):

I concur in a reversal of this judgment, but on the ground only that error was committed in permitting the plaintiff to read the deposition taken before trial of the witness Cochran. This witness was produced and sworn On the trial and his whole deposition pre*202viously taken was read against the objection of defendant. He was • the treasurer'of defendant and íiot a party defendant and the read- ■ ing of his deposition after lie had-been sworn with opportunity for cross-examination was not permissible. Some material facts appear in this deposition which were not developed on liis oral examination and the'ruling, therefore, was an error- necessitating-a new trial of the action. , . , , •

.. . I dissent, however, from the conclusions. reached by Mr. Justice Laughlin in liis opinion. '

It seems to me that plaintiff showed 'good title to the- notes in controversy and that defendant is bound by the acts of its treasured arid president in issuing them.

The plaintiff paid f ulb value- before maturity and had. no notice - of. actual or intended diversion of proceeds or of any infirmity in their execution unless the form itself of the notes gave such notice. . I do not think it did.

The defendant was engaged in business in the prosecution of which it gave,notes for indebtedness.incurred and for the- purpose" of obtaining cash, and .it is not disputed that conjointly the president and treasurer could-have-given binding notes. Kohler was its president. with, the power of “ general management of the;affairs of the corporation.” Cochran was the treasurer, and the by-laws of the defendant, in addition to enumerating as liis duties that, he should have the care and custody of the funds and .books- of the corporation, provided.that he should “sign all checks,, drafts,- notes and orders for the payment of money which shall be countersigned by Ihe president and he shall pay out. and dispose of the same under the .direction of the president.” The treasurer signed the .notes in question and delivered them to the president to be negotiated for the benefit of the defendant. The president did not countersign them but he procured them to be discounted by plaintiff in due course of business. Under the president’s general authority to manage the affairs of the defendant it can hardly be said ho had no authority to give notes-of - the defendant in its business or to negotiate one .given therein by its treasurer. ' .

The by-laws of defendant do not prescribe the form of any note to be given. In enumerating the duties of the treasurer he is required to sign all. notes, drafts, and checks which have been *203countersigned by the president, but he is not prohibited from giving any nqte by direction of the president before it should have been countersigned.

In the regular performance of the duties which are enumerated by the by-laws the first step would be the making of the note and the signing by the treasurer, and then it naturally would be countersigned by the president. A treasurer of a corporation is its fiscal officer, and, prima facie, checks, drafts and notes issued in the. business of the corporation, signed by him as such, officer, are the obligations of the corporation, for they are acts which such an officer would ordinarily perform. The by-laws do not prohibit the giving of a note signed by the treasurer alone or by the president alone. They only prescribe that the treasurer shall sign if the president countersigns. Indeed, the defendant in course of business had issued and presumably ratified and paid several notes signed by the treasurer alone. This was sufficient evidence, of course, of dealing to authorize the direction of a verdict for plaintiff. If the president had power to give a note in his management of the defendant corporation he had power to negotiate one given by the treasurer. This he did. The fact that the draft of $5,000 was made payable to him individually instead of as president of defendant (or as treasurer of the trust company if the notes were purchased from it) did not destroy the hona fides of the plaintiff. If currency had been given on the discounting of the notes it necessarily would have been delivered to him as an. individual, and as an individual he had authority to receive it. Hor does the fact- that the president diverted the proceeds of the discount affect, the plaintiff’s position, for it was without notice or any means of knowing that the president would not act honestly towards his corporation.

Except for the error in reading the deposition I should, therefore, vote for an affirmance of the judgment.