Wahlig v. Standard Pump Manufacturing Co.

McAdam, C. J. The note was made by Pearl, and indorsed: “Standard Pump Mfg. Co. J. F. Herron, Treasurer.” The note did not concern any business of the corporation, and was indorsed by its treasurer for the accommodation of the maker. There was no by-law or resolution of the board of directors authorizing the treasurer to indorse negotiable paper; nor was there any proof of a recognized course of dealing by which the treasurer was held out as possessing such power, or any evidence of ratification on the part of the corporation. The corporation received no benefit from the note, and the proceeds never reached its treasury. Under these circumstances, the act of the treasurer was not a corporate act. Wahlig v. Manufacturing Co., 5 N. Y. Supp. 420; Mather v. Trust Co., 7 N. Y. Supp. 213; Westerfield v. Radde, 7 Daly, 326, 55 How. Pr. 369. Herron, as treasurer, had no power to lend the credit of the corporation. If the indorsement was not a corporate act, the fact that the plaintiff was a bona fide holder cannot, even under Mechanics' etc., Ass’n v. New York, etc., Lead Co., 35 N. Y. 505, make it a corporate charge. In such a case the remedy would seem to be against the treasurer, who acted without corporate sanction, (Green’s Brice, Ultra Vires, 634,) upon the theory that, where the act does not bind the principal, it binds the person who, without authority, assumed to act as agent. It follows that there must be judgment for the defendant.