First National Bank of Brooklyn v. Wallis

Andrews, Ch. J. The character of the plaintiff as a bona fide holder of the note is not affected by any misconception it may have been under when it discounted it, as to the legal import of the promise, that is to say, whether the note was the obligation of the Wallis Iron Works, or'of the persons who signed it in their individual names, with the addition of the names of their respective offices. The bank discounted the note at the request of its customers, the payees, before maturity, paying full value, without inquiring as to the nature of-the principal obligation, and it is entitled to enforce it against the *458 defendants as individuals, if on its face it was their promise, and not the promise of the corporation of which they were officers. It may be admitted that if the bank, when it discounted the paper, was informed or knew that the note was issued by the corporation, and was intended to -create only a corporate liability, it could not be enforced against the defendants as individuals, .who, by mistake, had executed it in such form as to make it on its face their own note and not that of the corporation. But according to the rules governing commercial paper nothing short of notice, express or implied, brought home to the bank at the time of the discount, that the note was issued as the note of the corporation, and was not intended to bind the defendants, could defeat its remedy against the parties actually liable thereon as promisors. It appears that the bank discounted the note on the credit primarily of its customers, the payees, making no inquiry as to whether it was a corporate or individual obligation, and having no knowledge on the subject. In law it was the individual note of the defendants (Casco National Bank v. Clark, 139 N. Y. 308; Merchants’ National Banh v. Clarh, Id. 315), and the form of the promise is quite consistent with an intention to create an individual liability. The fact that the bank sued the Wallis Iron Works on one of the notes of this kind is not a material circumstance. That note matured and suit was brought thereon subsequent to the discount of the note now in question. The view there entertained by the plaintiff of the legal nature of the obligation did not conclude the bank from enforcing the note now in question according to its real character. If the fact of the former suit and the pleadings therein were admissible on the question of the knowledge of the bank when it discounted the present note, that it was issued for and was intended as a corporate obligation, the existence of such knowledge has been negatived by the course of the trial. We think the judgment is right, and it should, therefore, be affirmed. All concur. Judgment affirmed.