Chemical Nat. Bank of New York v. Wagner

• Decision Date: 29 November 1892
• Citation: Chemical Nat. Bank of New York v. Wagner, 20 S.W. 535, 93 Ky. 525 (Ky. Ct. App. 1892)
• Parties: Chemical Nat. Bank of New York v. Wagner. First Nat. Bank of New York v. Same.
• Court: Kentucky Court of Appeals

20 S.W. 535

93 Ky. 525

Chemical Nat. Bank of New York v. Wagner.

First Nat. Bank of New York v. Same.

Court of Appeals of Kentucky.

November 29, 1892

Appeal from chancery court, Campbell county.

"To be officially reported."

Suit by Adam Wagner, as assignee of the Swifts Iron & Steel Works Company to have the affairs of the corporation settled.The Chemical National Bank of New York and the First National Bank of New York filed promissory notes drawn by the treasurer of the Swifts Iron & Steel Works Company, and indorsed to them, to obtain their pro rata thereon.Their pro rata was disallowed, and they appeal.Affirmed.

Bennett J.

The Swifts Iron & Steel Works Company is a corporation created by the legislature of this state in January, 1871.At the time of the transactions in controversy in this case, E. L. Harper was president of the company, and J. H. Mathews was its treasurer.There were also a vice president and board of directors of said company.The powers of each are set forth in the company's by-laws, as follows: "Sec. 3.All contracts and obligations binding the corporation may be signed by the president or vice president.""Sec 5.The treasurer shall have charge of the finances of the company, and shall sign all checks, and receive and account for all moneys and property coming into his hands.""Sec. 8.There shall be a business committee, consisting of the president and vice president, who shall have full power to transact the business of the company under such restrictions as the board of directors may devise from time to time."This by-law was amended so as to authorize either member of the business committee to act in the absence of the other, and, in the absence of both, "the treasurer shall have power to act as such committee."J H. Mathews, in April and May, 1887, drew six promissory notes in the name of the Swifts Iron & Steel Works for $25,000 each, due respectively in four months, signed by him as treasurer, and made payable to himself individually, which he then indorsed individually, and delivered them to E. L Harper, who was then vice president of the Fidelity National Bank of Cincinnati.Said Harper, as vice president of the Fidelity National Bank of Cincinnati, indorsed said notes to the appellants,-two to the Chemical National Bank, and four to the First National Bank,-to collaterally secure loans of money to the Fidelity National Bank.Not long thereafter, the Fidelity National Bank and the Swifts Iron & Steel Works becoming insolvent, made an assignment for the equal benefit of creditors.The appellants filed these collaterals in the suit by the assignee of the Swifts Iron & Steel Works to have its affairs settled, and assets distributed, for the purpose of obtaining their pro rata thereon.The lower court rejected their claim, upon the ground that J. H. Mathews, as treasurer, had no authority to issue them payable to himself individually; hence they were void at the instance of the company.The appellants contend that said Mathews did have authority to issue said notes; but, if he did not, the notes were negotiable paper, and they were purchasers thereof for value, having no notice of any infirmity in them.It is conceded for the sake of the argument that the notes dated at Cincinnati, Ohio, indorsed and payable to...