American Trust & Savings Bank v. Gluck
| Decision Date | 06 May 1897 |
| Docket Number | 10,378--(37) |
| Citation | 70 N.W. 1085,68 Minn. 129 |
| Parties | AMERICAN TRUST & SAVINGS BANK v. FRANK P. GLUCK |
| Court | Minnesota Supreme Court |
In the matter of the assignment of the Jacoby-Mickolas Company, the American Trust & Savings Bank presented a claim for allowance. fro an order of the district court for Hennepin county, Jamison, J., denying a new trial, judgment having been directed for the bank, Frank P. Gluck, assignee appealed. Affirmed.
Order affirmed.
S Meyers, for appellant.
A corporation has no power to issue or accept accommodation paper. Morawetz, Priv. Corp., § 232, and note. Though a purchaser in good faith, for value, of negotiable paper, may recover against the corporation upon such paper signed by one clothed with apparent power to issue it, yet respondent in this case was not a purchaser in good faith and without notice. Farmers' v. Empire, 5 Bosw. 275; Monument v. Globe, 101 Mass. 57; Chrysler v Renois, 43 N.Y. 209; Philbrick v. Dallett, 2 Jones & S. 370. The principal of estoppel does not apply merely because numerous other drafts of a like character were taken by respondent in like manner and afterwards paid. In order to claim an estoppel respondent must have been in a position whereby, at the time it parted with its money, it could have maintained an action against the drawee in case it refused acceptance or payment. Our statute, § 2233, which is similar to the New York statute, is as follows: "No person within this state shall be charged as an acceptor on a bill of exchange, unless his acceptance is in writing, signed by himself or his duly authorized agent." There can be no estoppel as against an express statute.
Louis K. Hull, C. S. Jelley and Stephen H. Somsen, for respondent.
Though the issue of accommodation paper is not one of the powers of a corporation, yet a bona fide purchaser for value of negotiable paper issued by a corporation may recover from the corporation if it prove to be accommodation paper. Farmers' Bank v. Butchers' Bank, 16 N.Y 129; National Bank v. Young, 41 N.J.Eq. 537; Lexington v. Butler, 14 Wall. 282; Bird v. Daggett, 97 Mass. 494; Webster v. Howe, 54 Conn. 394. Respondent's recovery depends then upon whether it is a bona fide holder. That it is, and so can recover, see Mechanics v. Livingston, 33 Barb. 458; Heuertematte v. Morris, 101 N.Y. 63; Iselin v. Chemical, 16 Misc. 437; First National v. Schuyler, 7 Jones & S. 440; Hoffman v. Bank, 12 Wall. 181. "Want of consideration, as between drawer and drawee, will not prevent recovery against the drawee by one who has become a bona fide holder of the bill before acceptance." Fort v. Carter, 152 Mass. 34. But the doctrine of estoppel also applies in this case. The very fact that drafts of this character were presented and discounted so frequently and always promptly paid, would lead respondent to believe everything was as it should be. The words "pay as advised," being contained in each draft so discounted, makes the case for estoppel even stronger. Respondent need not have been in a position, at the time it parted with its money, to maintain an action against the drawee on the drafts. When they were presented the drawee had the option of accepting them or of refusing to do so, and by accepting them it completed a contract between itself and the holder, the consideration flowing to the drawee from the holder being the forbearance to pursue the drawee and the extension of credit by such acceptance. Heuertematte v. Morris, supra.
The defendant herein, Frank P. Gluck, is the assignee in insolvency of the Jacoby-Mickolas Company, a corporation organized under the laws of this state, and engaged, prior to its assignment, in the business of dealing in whiskies and liquors at the city of Minneapolis. The plaintiff, the American Trust & Savings Bank, during the times hereinafter mentioned was, and is, a banking corporation, doing business as such at the city of Chicago. The plaintiff presented to the defendant for allowance, as such assignee, a promissory note for $ 800 made by the Jacoby-Mickolas Company, and two bills of exchange accepted by it for the sums of $ 1,218.34 and $ 551.88, respectively, which were disallowed by the assignee, and the plaintiff appealed therefrom to the district court of the county of Hennepin. Upon the hearing of the appeal in the district court the entire claim was allowed, and judgment directed for the plaintiff accordingly. The assignee appeals from an order denying his motion for a new trial. No question is made in this court to the allowance of the promissory note, but the defendant assigns as error the allowance of the amount of the two drafts.
The material facts as to the two drafts are these: George G. Jacoby was president and treasurer, and J. A. Zerbe secretary, of the Jacoby-Mickolas Company, and each of them, as such officer, was at all times authorized by the corporation to accept for it drafts drawn on it, and make for it promissory notes, in the due course of its business. On September 13th, 1895, J. A. Brecher made the first draft here in controversy, which was in these words:
This draft was discounted by the plaintiff on the same day, in the usual course of business. It paid the full face amount therefor, less exchange. The draft was on September 16, 1895, accepted by the Jacoby-Mickolas Company, by Jacoby, as its treasurer. On September 14, 1895, Brecher made the second draft in controversy, which was for $ 551.88, and was payable at sight, and in all other respects like the first draft, except as to dates and amounts. It was in like manner discounted by the plaintiff and accepted by the drawee. These drafts were a part of a large number of drafts, some hundreds in all, for various sums and different dates, drawn by Brecher on the Jacoby-Mickolas Company, commencing in 1894, all of which were accepted by the corporation, by either its president and treasurer, Jacoby, or its secretary, Zerbe. Payment of none of the series was ever denied, but all were paid by the corporation prior to its assignment, which was made after the acceptance of the two drafts here in question, and before payment.
All of the several drafts, including the two here in question, were exactly the same in form, signatures, and wording, except as to dates and amounts. All of the drafts so drawn by Brecher were in fact accepted by the corporation for his accommodation, no funds having been provided for their payment in advance of acceptance. But in all cases, except the two last, Brecher sent to the corporation, after the acceptance and before the maturity of the drafts, his checks which were paid, for the purpose of providing funds for the payment of the drafts. Brecher died after the making of the two last drafts, and before their acceptance. He was during the time of the transactions here stated a resident of Chicago, and a customer of the plaintiff bank, and was accustomed to draw and negotiate these drafts once or twice a week, and sometimes once or twice a day. He represented a whole sale...
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