Merchants' National Bank v. Clark

34 N.E. 910, 139 N.Y. 314, 54 N.Y. St. Rep. 593, 94 Sickels 314, 1893 N.Y. LEXIS 1003

• Court: New York Court of Appeals
• Decided: October 3, 1893
• Status: Published

Opinion

Gray, J.

The promissory notes sued upon in this case were in the same form, as was the note in the case of the Oasco Mational Bank against the same defendants, decided at this term. * The reasons given for the affirmance of the judgment in that case apply .to the present. These appellants, however, claim that there was error committed by the trial court, in the exclusion of evidence offered for the purpose of showing that the plaintiff knew, at the time it discounted the notes, that they were the notes of the Bidgewood -Ice Company and not the notes of these defendants.

It appears that at that time Dennis, who was a director of the Clark & Chaplin Ice Company, the payee in the notes, and which procured them to be discounted, was also the president of the plaintiff. The notes were handed to him in the company’s office. He was not examined, and it was not shown that he was conversant with the transaction out of which the note arose, or how it was made; but, assuming that he was, his knowledge was not attributable to the plaintiff. When it is sought to prove that the plaintiff took the note, knowing it to be the promise of the Bidgewood Company, and not that of the appellants, it is essential that the knowledge to be attributed to the plaintiff should have been acquired by its officer, not casually and through his individual relations to the other parties, but in an official capacity, and because of a necessity for him to inquire and to know the facts in behalf of the bank. That was not this case. Dennis, receiving these notes from the company of which he was a director, to be offered for discount by the board of his bank, was under no obligation to state to the board what his opinion was as to the liability of the parties appear ing hr makers upon the notes. The questions, which were put for the purpose of showing a knowledge by plaintiff that these were the notes of the Ridgewood Company, were addressed to the defendant Close, and related to conversations had with Dennis, or with any other officer of the plaintiff, before the commencement of the suit, with regard to the notes. The inquiry was whether, in any of these conversations, the witness had been told that at the time the plaintiff received the notes, it knew they were the notes of the Ridgewood Company. The exclusion of such evidence was perfectly proper. A party to a promissory note should not be permitted to invalidate his written agreement by any testimony of that hearsay nature. If the statements, sought to be elicited in the testimony, had been made to Close, they would have been quite incompetent to prejudice the rights of the bank. While evidence to show what took place at the time when the notes were offered and received for discount, in order to prove knowledge by the bank of the facts, might be proper, subsequent admissions and declarations by individual directors, or other officers, would be of no effect to bind the bank. What they may have said, not being under oath, cannot be evidence against the bank; and upon that principle, as because the statements were not made in strict relation to any agency for the bank, such evidence is inadmissible. The principle of the exclusion is the same as obtains in the ordinary relation of principal and agent. The statements of the latter are inadmissible to affect the former, unless in respect to a transaction in which he is authorized to appear for the principal, and he lias no authority to bind his principal by any statements as to bygone transactions. Hearsay evidence of this character is only permissible when it relates to statements by the agent, which he was authorized by his principal to make, or to statements by him which constitute part of the transaction which is at issue between the parties. (1 Morawetz on Priv. Corps. § 540a.)

The judgment should be affirmed, with costs.

All concur.

Judgment affirmed.

* Ante, page 307.