Financial Associates v. Impact Marketing Inc.
| Decision Date | 19 May 1977 |
| Citation | 394 N.Y.S.2d 814,90 Misc.2d 545 |
| Parties | , 21 UCC Rep.Serv. 1369 FINANCIAL ASSOCIATES v. IMPACT MARKETING INC. and Marc Eliot. |
| Court | New York City Court |
Bernard Chodosh, New York City, for plaintiff.
David Halperin, P. C., New York City, for defendant.
Plaintiff an alleged holder in due course moves for summary judgment in an action on two checks. Judgment is sought against a corporation and the individual drawer. The question to be determined is whether the drawer who signed the checks without indicating his representative capacity can be held personally liable.
The checks were the last two of a series of six post-dated checks. All of the checks were purchased at a discount by the plaintiff from the payee. Four were paid and payment stopped on the last two.
It appears that the checks were given to the payee for legal services to be performed. His services were subsequently terminated. However it is not denied that the termination took place subsequent to the purchase of the checks by the plaintiff and four checks were paid over a period of a month after purchase. There is therefore nothing to show that the plaintiff had any notice of any impediment to collection. And the mere knowledge of a purchaser that a check is post-dated or issued for an executory promise is insufficient to defeat his claim as a holder in due course. (UCC Sec. 3-304(4)(a)(b)). The suspicion or surmise by the individual defendant as to the bona fides of the plaintiff as a holder does not create a triable issue. (Capelin Assoc. v. Blake Mfg. Corp., 34 N.Y.2d 338, 341, 357 N.Y.S.2d 478, 480, 313 N.E.2d 776, 777; Ehrlich v. American Moninger Greenhouse Mfg. Corp., 26 N.Y.2d 255, 259, 309 N.Y.S.2d 341, 344, 257 N.E.2d 890, 892; Hanrog Dist. Corp. v. Hanioti, 10 Misc.2d 659, 660, 54 N.Y.S.2d 500, 501). There are therefore no triable issues of fact on this point, and the Court finds that the plaintiff is a holder in due course.
The checks sued upon were drawn on the Chemical Bank payable to the order of "Barry E. Bell". "Impact Marketing Inc." is printed on the checks and signed "Marc Eliot". The checks do not indicate that the individual defendant Marc Eliot, the drawer, signed in any representative capacity. However, he states that he drew the check as an officer of the defendant corporation for legal services to be performed for the corporation. UCC Section 3-403 states: "(2) An authorized representative who signs his own name to an instrument . . . (b) except as otherwise established between the immediate parties, is personally obligated if the instrument names the person represented but does not show that the representative signed in a representative capacity . . ." The section is clear. It prevents a drawer or maker, who fails to indicate his representative capacity on an instrument, to contest the question of his individual liability against a holder in due course. (Megowan...
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