Fifth Nat'l Bank of Providence v. Navassa Phosphate Co.
| Citation | 119 N.Y. 256,23 N.E. 737 |
| Parties | FIFTH NATIONAL BANK OF PROVIDENCE v. NAVASSA PHOSPHATE CO. |
| Decision Date | 25 February 1890 |
| Court | New York Court of Appeals |
OPINION TEXT STARTS HERE
Appeal from superior court of New York city, general term.
Action by the Fifth National Bank of Providence, R. I., against the Navassa Phosphate Company, as indorser of two promissory notes. The indorsement was, ‘Navassa Phosphate Company, W. E. Lawton, Prest.,’ and the further indorsement, ‘Lawton Brothers.’ The question at the jury term was whether the indorsement ‘Navassa Phosphate Company’ was the indorsement of defendant, and the court held that it was not, and dismissed the complaint. The judgment was affirmed by the general term, and plaintiff appeals.
Abram Kling, for appellant.
Alexander & Green,(Eugene L. Richards, of counsel,) for respondent.
We think the question of the authority of Lawton to bind the defendant company by indorsement was one of fact, which should have been submitted to the jury, and that the trial court erred in deciding it as a question of law. In other words, our conclusion is that the record contains some evidence of the existence of such authority, and enough to require the judgment of a jury upon it. Lawton was president and treasurer of the phosphate company, and the general manager of all its business affairs in the city of New York. While it had an office in Baltimore, yet at the one in New York the buying and selling of phosphates, the shipment and discharge of cargoes, the annual meetings of the directors, the record of transfers of stock, the discount of business paper, the use of the money of the corporation for its purposes, and the account of the same in its cash-book, were daily and permitted transactions. This concentration of business at the New York office seems not to have been accidental or unanticipated, for the articles of association show that the company was incorporated under the laws of this state, and that the principal part of the business was to be transacted in the city of New York, while a ‘part of the business' was to be done in the island of Navassa, in the Caribbean sea, and also in the states of Massachusetts, Maryland, New Jersey, and Pennsylvania. At this principal business office in New York the only official of the company in attendance and conducting its affairs was Lawton, the president. One other director only was a resident of this state, but the whole burden and responsibility was thrown upon and borne by the president at the office in New York. The evidence shows that he chartered vessels for the shipment of phosphates from the island, that he attended to the insurance of the cargoes, that he paid the current accounts of the company, and indorsed checks which were payable to the company's order. He was not only president, but treasurer, and was consciously invested by the company with the broad general power inseparable from the position in which it placed him as the sole manager of its affairs at its principal place of business. It is true that the sales of phosphates actually delivered in New York were small in comparison with the bulk of the company's business, but they sold to some extent on foreign account, the shipments for which were direct from the island, the financial management appearing upon the books in New York, and it does not follow from the proof that the great bulk of the business was not done in that city and by the president. The company had no cash capital. Its articles of association disclose that fact, and that all its shares issued were to be issued for property purchased. Its annual reports show the same thing. Where, then, was the money to come from with which to pay for the loading and shipment of the phosphates, the labor employed in the work, the premiums for insurance, and the charter of vessels? At least until profits were realized, and a surplus accumulated over and above dividends paid, the working capital was necessarily to be borrowed upon the credit of the company. No director was ignorant of that fact. Who, then, was authorized to...
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