Pollin v. Mindy Mfg. Co.

• Decision Date: 16 November 1967
• Citation: 211 Pa.Super. 87,236 A.2d 542
• Parties: , 4 UCC Rep.Serv. 827 Benjamin POLLIN and Arthur Pollin, t/a Girard Check Exchange v. MINDY MFG. CO., Inc. and Robert L. Apfelbaum. Appeal of Robert L. APFELBAUM.
• Court: Pennsylvania Superior Court

Page 542

236 A.2d 542

211 Pa.Super. 87, 4 UCC Rep.Serv. 827

Benjamin POLLIN and Arthur Pollin, t/a Girard Check Exchange v. MINDY MFG. CO., Inc. and Robert L. Apfelbaum Appeal of Robert L. APFELBAUM.

Superior Court of Pennsylvania.

Nov. 16, 1967.

Rehearing Denied Dec. 1, 1967.

Petition for Allowance of Appeal Denied Feb. 21, 1968.

Martin J. Resnick, Techner, Rubin & Shapiro, Philadelphia, for appellant.

Edwin S. Moore, III, Moore, James, Wright & Gibbons, Philadelphia, for appellee.

Before ERVIN, P.J., and WRIGHT, WATKINS, MONTGOMERY, JACOBS, HOFFMAN, and SPAULDING, JJ.

MONTGOMERY, Judge.

This appeal by Robert L. Apfelbaum, one of the defendants, is from a judgment entered against both defendants on the pleadings in an action of assumpsit. The corporate defendant did not appeal.

The complaint sets forth in Count No. 1 that plaintiffs are in the business of cashing checks, that on September 23, 1966 Mindy Mfg. Co., Inc. issued and distributed payroll checks to its employes payable to their orders ¹ and drawn on the Continental Bank and Trust Company in payment for wages earned by said employes; that plaintiffs cashed these checks for a small fee on the endorsement and delivery of same by the payees, and in turn endorsed same and deposited them in their account at the Provident National Bank of Philadelphia, which in turn presented them to the Continental Bank and Trust Company, which institution refused payment because Mindy Mfg. Co. did not have sufficient funds on deposit then to cover them; and that thereafter demand was made on Mindy Mfg. Co. for payment, but it was refused; and

In Count No. 2, after incorporating by reference the foregoing allegations it stated that Robert L. Apfelbaum, an individual, signed all of the aforementioned checks, with but one exception, which signature was 'absolute and unqualified' but that he has refused to pay those which he signed which total $2,252.09.

The checks are in evidence and are boldly imprinted at the top, Mindy Mfg. Co., Inc., 26th & Reed Streets, Philadelphia, Penna. 19146--Payroll Check No. _ _, and also Mindy Mfg. Co., Inc., is imprinted above two blank lines appearing at the lower right hand corner; also on the lower left hand corner appears Continental Bank and Trust Company, Norristown, Pa., in type. Under the imprinted name of the corporated defendant, on the first line, appears the signature of defendant Robert L. Apfelbaum without any designation of office or capacity on all of the checks before us in this appeal; the name of Estelle Apfelbaum appears on the other check mentioned in Count No. 1 which was in the amount of $81, but she was not made a party to the action.

In answer to the allegations contained in the first count appellant admitted all of them but alleged that on September 23, 1966 when the checks were drawn, Mindy Mfg. Co., Inc. had on deposit in Continental Bank and Trust Company approximately $4,400 which, on September 26, 1966 was appropriated by that institution and applied on a $7,000 demand note of the Mindy Mfg. Co., Inc. which it held, without notice to the corporation. Mindy Mfg. Co., Inc. filed no answer.

In answer to the other allegations of the second count appellant averred that he signed the checks as president of Mindy Mfg. Co., Inc., and not in his individual capacity.

Summary judgment against appellant was entered by the lower court on the authority of Section 3--403 of the Uniform Commercial Code, the Act of April 6, 1953, P.L. 3, § 3--403, 12A P.S. § 3--403, which provides, 'An authorized representative who signs his 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 * * *', and our decisions thereunder, Bell v. Dornan, 203 Pa.Super. 562, 201 A.2d 324 (1964), and Pittsburgh National Bank v. Kemilworth Restaurant Company, Inc., 202 Pa.Super. 238, 195 A.2d 919 (1963).

The issue before us, therefore, is whether a third party to the original transaction, the endorsee in the present case, may recover against one who affixes his name to a check in the place where a maker usually signs without indicating he is signing in a representative capacity, without giving consideration to other parts of the instrument or extrinsic evidence. This appears to be a novel question under the Uniform Commercial Code.

If this were an action brought by the payee parol evidence would be permitted to establish the capacity of the person affixing his signature under Section 3--403 (b) previously recited and our decisions in Bell v. Dornan and Pittsburgh Notional Bank v. Kemilworth Restaurant, supra.

However, since this is an action brought by a third party our initial inquiry must be for the purpose of determining whether the instrument indicates the capacity of appellant as a signer. Admittedly, the instrument fails to show the office held by appellant. However, we do not think this is a complete answer to our problem, since the Code imposes liability on the individual only '* * * if the instrument * * * does not show...