Union Land Co. v. Gwynn

Scott, J.: The defendant is sued upon a syndicate or underwriting agreement whereby he agreed, with others, to purchase bonds to be issued by a corporation known as the Texas Railways Company. The facts are practically undisputed and are so fully stated by the referee in his report and opinion that it is unnecessary to restate them. We are entirely satisfied with the conclusion at which the referee has arrived and with the reasons given by him for that conclusion. It would be unnecessary to go further except that there is presented one point, not dealt with by the referee, which serves to fortify the result arrived at. 'Defendant’s liability is predicated in part upon the guaranty by the managers of the syndicate of a promissory note given by the Texas Railways Company to a trust company in St. Louis and the assignment of the underwriting agreement as collateral security for the note. The underwriting agreement signed by defendant provided as follows: “The ‘managers’ are hereby granted specific authority to take up or guarantee the payment of any note or notes that may be issued by the ‘ Railways Company ’ in payment or part payment for any or all of the aforementioned ” $109,000 of the bonds of the Southern railroad. [831] The “managers” were designated in the 1st clause of the underwriting agreement as follows: “ This agreement made between Claude W. Jester and Martin S. Watts, general partners, and George T. Jester, special partner, doing business under the firm name and style of Jester & Co., in the City of New York (hereinafter called ‘managers’) parties of the first part,” etc. There can be no doubt, as we consider, that by the language above quoted it was the individual members of the firm of Jester & Cól who were made managers (a word that throughout the agreement is used in the plural form), and that the reference to their association as a firm was a mere descriptio personæ, intended to identify the individuals who were designated as managers. (Greenwood Lake & P. J. R. R. Co. v. N. Y. & G. L. R. R. Co., 134 N. Y. 435; Pfeiffer v. Rheinfrank, 2 App. Div. 574; Werner v. Wheeler, 142 id. 358.) This being so, it was essential to the validity of any guaranty undertaken to be made by virtue of the authority given in the underwriting agreement that such guaranty should be signed by all the managers, and not by less than all or by the firm. In this respect the. underwriting agreement resembled a power of attorney, as to which it is well settled that when it is given to two or more individuals it will, in the absence of a clear contrary intention, be presumed to be joint, and accordingly can be validly exercised only by all acting together. (Unterberg v. Elder, 149 App. Div. 647.) The document by' which Jester & Co. undertook to guarantee the payment of the note of the Texas Railways Company, and to assign to the trust company the underwriting agreement signed by defendant, was not signed by all the managers,' but by only one of them, who added to his own name that of the firm. This was not a valid exercise of the authority given to the managers, and was wholly ineffective to create any liability against the defendant. For this reason, as well as for' those stated by the referee, the judgment is right and must be affirmed, with costs. Ingraham, P. J., Clarke, Dowling and Hotchkiss, JJ., concurred. Judgment affirmed, with costs.