Babcock v. Beman

By the Court. Ingraham, First J.

The plaintiffs sue the defendant as endorser upon a promissory note drawn by Adam Smith & Co., and payable “ to the order of R. Beman, Treas.,” for five hundred dollars. The note is endorsed by the defendant, “ R. Beman, Treasurer.”

In the complaint the note is described as a promissory note, payable to the defendant, and endorsed by Mm. The defendant in his answer sets out the note with the special endorsement. The defendant further answers that he was, at the time of making such endorsement, treasurer of Union Manufacturing Company; that he was authorized by them to receive the note and endorse it to the plaintiff, as such treasurer, and that the plaintiff had a notice of all the said facts.

That the Union Manufacturing Company was, at the time, indebted to the plaintiff in a large amount for goods; that the note was received and endorsed by him as treasurer aforesaid, and not in his individual capacity, and was received by the plaintiff as an obligation of the said company, on account *597of a precedent debt due to them for the said company, and that the defendant received no consideration therefor.

The plaintiffs demur to these portions of the answer. By the demurrer these facts are admitted; and we have then to decide whether a treasurer of a company, to whom a note is made payable as treasurer, and who endorses such note with the addition to his name of the word treasurer, and delivers the note to a creditor of the company, in payment of a debt due to him from the company indicated, having full knowledge of all the facts, can be held liable in his individual capacity as endorser of such note.

There appears to be a distinction between the maker and endorser of a note, who signs as an agent. In the former case he is held liable, although he discloses even the name of the principal for whom he acts, (3 Wend. 98, 7 Cow. 31,) because, although he signs as agent, the note purports to be his individual note, (4 Comstock, 208.)

Where, however, the note is made payable to an individual, as an officer of the corporation, a different rule has been applied. Such a note, without any endorsement from the payee, has been held to be the property of the corporation of which he was the officer, (1 Denio, 608, 3 Barb. S. C. R. 523,) and actions were maintained in the name of the corporation. If this rule is correct, then it follows that a transfer of such property in the note, by the agent of the corporation to whom it is made payable, in his name as such agent, where the principal is known to the endorser, can only operate as a transfer of such interest. The ingredient which makes the agent liable who signs a note purporting to be made by himself as agent, namely, personally contraotmg, is wanting in such endorsement. The note in this case was known to the plaintiff to be the property of the corporation of which the defendant was treasurer; the object of the transfer, namely, to assign the note to the plaintiff as an obligation of the corporation for a debt due by them to the plaintiffs, was known to them, and the authority of the defendant to make such transfer is admitted by the demurrer. Under such admission, *598I am at a loss to see upon what ground the plaintiffs can insist that the contract of the defendant was a personal one. The blank endorsement upon the note must be filled up, according to the facts admitted to be known and agreed upon between the parties, namely, that the owners of the note transfer it to the plaintiffs by their agent in the same manner as that in which they received it.

This was the view taken by the supreme court, in the case of Mott v. Hicks, (1 Cow. 583,) of the liability of Housefield, who signed his name as endorser with the word agent. The plaintiff knew of the agency, and that the note was given for a debt of the company, as in the present case, and the endorsement only intended to pass the interest thereon to another. (See, also, Brockway v. Allen, 17 Wend. 41 ; and Hicks v. Hinde, 6 How. Pr. R. 1.)

Taking all the allegations in the answer, as admitted by the demurrer, I am of the opinion that the defendant is not personally responsible on his endorsement, and that the judgment at special term should be affirmed.

Judgment affirmed.