Craig Medicine Co. v. Merchants' Bank

14 N.Y.S. 16, 66 N.Y. Sup. Ct. 561, 36 N.Y. St. Rep. 923
CourtNew York Supreme Court
DecidedApril 15, 1891
StatusPublished
Cited by2 cases

This text of 14 N.Y.S. 16 (Craig Medicine Co. v. Merchants' Bank) is published on Counsel Stack Legal Research, covering New York Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Craig Medicine Co. v. Merchants' Bank, 14 N.Y.S. 16, 66 N.Y. Sup. Ct. 561, 36 N.Y. St. Rep. 923 (N.Y. Super. Ct. 1891).

Opinion

Macomber, J.

Rone of the facts of this case are seriously in dispute. The? action was brought to recover the proceeds of two checks of $345.76 each, dated, respectively, March 21 and 22, 1890, sent by merchants from Portland, Me., to Dr. Charles Craig, at Passaic, R. J., and by the postmaster there forwarded at the request of Dr. Craig to him at Rochester, R. T. Dr. Craig, being ill at the time the inclosures were received by him at Rochester, directed Agnes J. Craig to' indorse the checks in the name of the payee, the Craig Medicine Company, and deposit them in the bank for collection, which was accordingly done, she writing thereon, “The Craig Medicine Company, per A. J. Craig.” Dr. Craig, to whom the collections were afterwards fully paid by the bank, turned over to the company only $475 thereof, and this action is brought to recover the balance. In the municipal court of the city of Rochester judgment was awarded to the plaintiff for the amount claimed, and, upon appeal to the county court, the verdict of the jury was likewise in favor of the plaintiff, and from the judgment entered thereon, and from an order of the county court refusing the defendant’s motion for a new trial, this, appeal has been taken. The plaintiff alleges that the defendant wrongfully converted the checks to its own use at the time they were delivered to it by Miss Craig. There is, however, no evidence to show that the defendant did not act in perfect good faith in receiving this paper for collection, and in turning over the proceeds to the party who had directed the checks to be left, at the bank. Miss Craig was a daughter of Dr. Craig, and was actually a. director of the plaintiff. Dr. Craig had the general management of the business; was in the habit of collecting bills and paying debts; but he had not, sc? far as the case discloses the fact to be, any special authorization to sign the plaintiff’s name upon commercial paper, even for the purpose of collection, he being neither an officer nor a director of the corporation. The plaintiff’s right of action is based upon the proposition that one George W. Hicks was the treasurer as well as the president of the plaintiff, and that no person but himself had the right or authority to sign the company’s name. It is shown, however, that he did not remain at the principal office, which was at Passaic, R. J., but was rather the traveling man for the corporation, and, at or about the time of the giving of these checks, he was engaged as such traveling, representative in Rew England.

The contention made by the appellant’s counsel, that the plaintiff is not a. corporation, and therefore cannot maintain this action, is not tenable. The-name as it appeared as the payee in the checks, and as indorsed thereon, indicated that it was a corporation. The defendant, in receiving and collecting' the checks in that name, is estopped to deny the corporate character of the-plaintiff, in an action to recover the proceeds of the checks. Even though, under the laws of Rew Jersey, there was some omission of a technical character in the organization of the plaintiff, that omission cannot be made available to the appellant in this transaction, inasmuch as under cover of that name it became possessed of these moneys. The principal contention of fact upon the trial related to the authority of Dr. Craig or Miss Craig to sign the name of the corporation to these checks, and to collect and receive money thereon. The corporation was named for Dr. Craig, and he was the only person known by the officers of the bank to be connected with its operations. If, [18]*18therefore, the indorsements of the checks were made in pursuance of any implied authority given to Dr. Craig, this action cannot be maintained. The ■evidence of Dr. Craig was to the effect that Mr. Hicks knew that he was receiving and paying out moneys, and that he made no objections thereto; that he received from Mr. Hicks moneys realized from medicines sold which were ■sent by express to him, and that such moneys were expended by him for the ■pay of help and otherwise; that he had bought, at the defendant’s bank, drafts ■on Hew York to pay debts owing by the company; that all of this was done with the full knowledge of Mr. Hicks, who claims now to .be the sole finan■cial representative of the corporation: Beyond doubt, if Dr. Craig had exer■eised these functions with the consent of the managers or officers or directors ■of the corporation, the plaintiff would be estopped now to deny that in this particular instance he had such power or right. The county court was accordingly asked by the defendant’s counsel to charge the jury as follows: “I ■ask the court to charge the jury that if the jury shall find that, by the consent of the plaintiff, Dr. Craig had conducted the plaintiff’s business, had paid bills, sold goods, received and paid out moneys for the plaintiff, and was in fact ostensibly in charge of the business, then Dr. Craig had apparent authority to indorse the drafts in question, and receive the money in question, and it is immaterial whether or not he had actual authority. ” The court declined so to charge, and exception was taken thereto. This, we think, was such an error as to lead to a reversal of the judgment and a new trial. Corporations can act only through their officers and agents; and, if a person has been intrusted by the officers to carry on the business, the acts of that person must be deemed to be binding upon the corporation in all cases where the parties dealing with him have not notice or knowledge of his want of actual .authority.

But there is another reason, more radical in its character, why a new trial should be granted, and why this action cannot be maintained. As stated above, the plaintiff claims that the only person who had the right to use the plaintiff’s name in financial matters was-George W. Hicks, as he was the one designated, as is claimed, by the corporation, to fill the duties of that office. There were four persons who constituted this corporation, namely, George W. Hicks, Lizzie M. Hicks, Agnes J. Craig, and C. C. Craig, Jr. The last three persons executed and acknowledged at Rochester, H. Y., and delivered to George W. Hicks, the following proxy: “Whereas, George W. Hicks, Lizzie M. Hicks, Charles Craig, Jr., and Agnes Craig are to organize s> corporation in the state of Hew Jersey, known as the ‘Craig Medicine Company,’ of which corporation each of the above parties are to be stockholders,; and' whereas, it is inconvenient for the said Charles Craig, Jr., Agnes Craig, and Lizzie M. Hicks to attend the first meeting of the stockholders for the election of officers: How, therefore, we, the said Charles Craig, Jr., Agnes ■Craig, and Lizzie M. Hicks, each of us hereby authorize the said George W. Hicks, in our place and stead, to vote upon the five hundred shares of the stock of said corporation owned by each of us, at the first meeting of the stockholders, whenever it shall be held, for the election of the officers. Bated October 5th, 1889.” The learned county judge has construed this instrument so as to include the right of George W. Hicks, not only to vote upon the stock •of the persons signing it at the meeting of the stockholders, but so as also to permit him, after the election of the directors, to vote in the place and stead of these persons as directors at any meeting which should be held by them for the election of officers. The fact is shown to be that at the stockholders’ meeting, which is claimed to have been held Hovember 1, 1889, at Passaic, H. J., there was present only one person, George W. Hicks.

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Bluebook (online)
14 N.Y.S. 16, 66 N.Y. Sup. Ct. 561, 36 N.Y. St. Rep. 923, Counsel Stack Legal Research, https://law.counselstack.com/opinion/craig-medicine-co-v-merchants-bank-nysupct-1891.