Singer Sewing Mach. Co. v. Citizens' Nat. Bank & Trust Co. of Englewood

• Decision Date: 13 September 1933
• Docket Number: No. 425.,425.
• Citation: 168 A. 32
• Court: New Jersey Supreme Court
• Parties: SINGER SEWING MACH. CO. v. CITIZENS' NAT. BANK & TRUST CO. OF ENGLEWOOD.

168 A. 32

SINGER SEWING MACH. CO.

v. CITIZENS' NAT. BANK & TRUST CO. OF ENGLEWOOD.

No. 425.

Supreme Court of New Jersey.

Sept. 13, 1933.

Syllabus by the Court.

1. A check made payable to "Singer Sewing Machine Co. for deposit only, P. A. Werner, Mgr.," is the property of the Singer Sewing Machine Company, and only a proper indorsement of the corporation's name by a properly constituted officer of the company could divest the corporation of the proceeds thereof.

2. A bank which credited a check made payable to the order of "Singer Sewing Machine Co. For Deiiosit Only, P. A. Werner, Mgr.," to the personal account of "P. A. Werner, Mgr.," without making inquiry as to the authority of "P. A. Werner, Mgr.," in the premises, does so at its peril.

Appeal from Third District Court, Bergen County.

Suit by the Singer Sewing Machine Company against the Citizens' National Bank & Trust Company of Englewood. From a judgment in favor of the defendant, the plaintiff appeals.

Judgment reversed.

Argued May term, 1933, before PARKER, LLOYD, and PERSKIE, JJ.

Rex B. Altschuler, of Haekensack, for appellant.

Abram A. Lebson, of Englewood, for appellee.

PERSKIE, Justice.

This appeal brings up for review a judgment rendered in favor of the defendant-appellee, hereinafter called defendant, in an action brought against it by the plaintiff-appellant, hereinafter called plaintiff, for the conversion of a check for the sum of $320.

The pertinent facts in this case, as settled by the court, are as follows: A check for $320 dated June 2, 1931, payable at the Citizens' National Bank & Trust Company of Englewood, to the order of "Singer Sewing Machine Co. P. A. Werner, Mgr.," was issued by the board of education, school district of Englewood, and presented to the defendant bank on June 11, 1931, indorsed "Singer Sewing Machine Co. For Deposit Only, P. A. Werner, Mgr." The defendant bank accepted the check, indorsed "Singer Sewing Machine Co. for Deposit Only, P. A. Werner, Mgr.," and credited the amount thereof, $320, to the personal account of "P. A. Werner, Mgr." Werner maintained a personal account with the defendant bank, and the authorized signature for withdrawal against this account was "P. A. Werner, Mgr." Defendant made no inquiry at any time as to the authority of any agent to indorse paper.

Defendant, for the second time, raises several technical objections in its brief concerning the condition of the pleadings, the state of the case, etc. A motion to dismiss the appeal on the same grounds was made to the court on the opening day of the May, 1932, term, case No. 456, and it was denied. That was dispositive. We fail to understand counsel in again presenting the same grounds of objections. We therefore necessarily pass to the meritorious questions presented.

The check executed by the board of education, school district of Englewood, payable to "Singer Sewing Machine Co., P. A. Werner, Mgr.," is presumed to be corporate property. In Reeve v. First National Bank of Glassboro, 54 N. J. Law, 208, 23 A. 853, 16 L. R. A. 143, 33 Am. St. Rep. 675, the Court of Errors and Appeals held that a promissory note signed "Warrick Glass Works, J. Price Warrick, Pres.," is the note of the corporation and not the note of Warrick, or the joint note of Warrick and the corporation. If a note is signed by the corporate name, followed by the name of a corporate officer, who affixed to his name his official title, such note is conclusively taken to be corporation paper. This is pursuant to sections 19 and 20 of the Negotiable Instruments Act (3 Comp. St. 1910, p. 3737, §§ 19, 20). Vliet v. Simanton, 63 N. J. Law, 458, 43 A. 738; Phelps v. Weber, 84 N. J. Law, 630, 87 A. 469.

While the effect of the decisions in the aforesaid cases is to impose liability on the body corporate as a maker, analogy requires the same rule to be adopted in determining the ownership of the instrument. Hence the conclusion is reached that the check in question was the property of the Singer Sewing Machine Company and that only a proper indorsement of the corporation's name by a properly qualified person could divest the corporation of its title. Assuming, but not deciding, that the presence of Werner's name along with the corporation's name, as payee, required his indorsement or gave him the authority to indorse, for the corporation, yet it was incumbent upon the defendant bank to make inquiry of Werner's authority in applying the funds to his personal account.

In Wagner Trading Co. v. Battery Park National Bank (1920) 228 N. Y. 37, 126 N. E. 347, 348, 9 A. L R. 340, an officer of a corporation indorsed "Wagner Tdg. Co. C. J. Wagner, President." C. J. Wagner had a personal account in this bank, and the proceeds were credited to his personal account. The New York Court of Appeal in action for conversion held: "Wagner had authority to indorse the checks, although no by-law or...