Manhattan Life Ins. Co. v. Fortysecond & G. St. Ferry R. Co.
| Decision Date | 03 October 1893 |
| Parties | MANHATTAN LIFE INS. CO. v. FORTYSECOND & G. ST. FERRY R. CO. |
| Court | New York Court of Appeals Court of Appeals |
OPINION TEXT STARTS HERE
Appeal from supreme court, general term, first department.
Action by the Manhattan Life Insurance Company against the Forty-Second & Grand Street Ferty Railroad Company for money loaned to one Eben S. Allen. From a judgment of the general term (19 N. Y. Supp. 90) affirming a judgment dismissing the complaint, plaintiff appeals. Affirmed.
Hoyt & Schell, (Artemas H. Holmes, of counsel,) for appellant.
Freling H. Smith, for respondent.
In September, 1888, Eben S. Allen, the president of the defendant, a domestic railroad corporation, forged a certificate of 100 shares of its stock, of the face value of $10,000, and pledged it as collateral security to the plaintiff for a personal loan of $6,500, which he then obtained. Default was made in the payment of the debt, and the plaintiff seeks to make the defendant liable for the amount of the loan, which is less in amount than the value of the stock, if it had been a genuine issue, and which represents the loss of the plaintiff by the fraud of the defendant's president. The certificate bor date November 10, 1881. At that time John Green was president, Charles Curtiss treasurer, and Allen sec retary and transfer agent, of the defendant company. The certificate was one of the printed or engraved forms used by the defendant, which had been cut from its blank certificate book in 1881, and signed in blank by Green, and left with the other officers of the company at a time when he was to be absent from the office for some months. It was intended for convenient use in case a stockholder desired to transfer his stock in the president's absence, and to have a new certificate issued to the transferee. Allen obtained possession of it, and kept in his private drawer until 1888, when he filled up the blanks, dating it November 10, 1881, inserting his own name as stockholder, forging the name of Courtiss as treasurer, and signing his own name as transfer agent. Green ceased to be president in April, 1883, and at the same time Curtiss ceased to be treasurer. Allen was secretary and transfer agent from 1868 to April, 1888, and treasurer from 1883 to April, 1888, when he became president, and Ralph J. Jacobs became treasurer, and Charles P. Emmons secretary and transfer agent. When Allen issued the certificate, in September, 1888, both Green and Curtiss were dead, and ever name attached to it was in a legal sense forged. While the signatures of Green and Allen were genuine, they were not then the officers of the defendant, which the certificate represented them to be, and the act of making and uttering the instrument was a forgery as to all the names written thereon, under sections 519 and 522 of the Penal Code. It is thus very plain that as president, in 1888, Allen had noauthority, either actual or apparent, to issue the certificate of stock upon which this nction is brought. The company had not invested him with any power as its then president to participate in the creation of certificates bearing date seven years previous. The authority which he possessed in 1881, as secretary and transfer agent, had then ceased to exist; and no state of circumstances has been suggested or can be conceived under which he was empowered to countersign the certificate as transfer agent in 1888, and antedate it as of the time when he held that office.
The rule which imposes a liability upon the principal for the unauthorized acts of his agent is founded upon public policy, and is well defined. It is limited to cases where there was an apparent authority to do the act in question, and it appeared to have been done in the rourse of his employment as agent, and was within the scope of his general powers. None of these grounds of liability have been shown here. The agency did not exist in 1888, which was necessary in order to deprive the principal of the right to disclaim responsibllity for the unauthorized act. With respect to the creation of certificates bearing date in 1881, he was as destitute of authority as if he had been a stranger to the corporation. He not only could not issue, or do any act required by in their issue, or do any act required by law or by the by-laws essential to give them validity. When he issued such a certificatein his own name, he was not apparently acting within the scope of any general authority conferred upon him by the corporation. The defendant cannot justly be held liable for the...
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