
    M. H. Marcus & Bro. Corporation, Respondent, v. The National Film Distributing Company, Appellant.
    (Supreme Court, Appellate Term, First Department,
    May, 1912.)
    Negotiable instruments — bona fide holders — what constitutes a bona fide holder — taking in due course of business — corporation paper taken from officer.
    In an action by a bona -fide holder for value, upon a cheek given by the treasurer of a corporation in its name, defendant is not estopped from denying the authority of its treasurer to execute and deliver the check, in the absence of proof that plaintiff purchased it with knowledge of previous transactions between the payee and the defendant.
    The plaintiff was bound to show affirmatively the authority of the treasurer who signed the check as he had no implied power so to do.
    Appeal by defendant from a judgment in favor of plaintiff rendered in the Municipal Court of the city of Rew York, borough of Manhattan, first district.
    Benjamin F. Feiner (Rathan Ballin, of counsel), for appellant.
    Aaron Honig, for respondent.
   Guy, J.

The plaintiff, who is a bona fide holder for value, brings suit upon a check bearing the name of the defendant corporation, and underneath said name is the signature “ Israel J. Ablowich, Treas.” The evidence shows that the signature is the signature of the treasurer of defendant corporation, and that the check was executed and delivered by the treasurer of the defendant to the payee with the understanding and agreement that the check would not be 'paid unless countersigned by the vice-president of the defendant corporation, and an agreement on the part of the payee that he would present it to the Vice-president and obtain the . counter-signature of . the vice-president before using the same. The evidence also shows that the by-laws of the corporation w'ere amended about three weeks.before the making of the check in suit so as to provide that all checks should be countersigned by the vice-president of the corporation; that this fact was known to the payee of -the check in suit, and that he had previously received checks from the treasurer of the corporation, which were so countersigned by the vice-president. The evidence further establishes that, prior to the adoption of the amendment to the by-laws providing for such countersigning of checks, the treasurer had, during a long course of business with this payee, given him checks signed only by the treasurer, which checks were subsequently signed by the defendant corporation.

The main ground of appeal urged by the appellant is that the plaintiff failed to show any authority in the treasurer to execute and deliver the check in suit. The respondent urges that, in view of the previous course of dealings between the corporation and the payee, and the fact that the payee had, previous to the adoption of the amended by-laws, been paid in checks signed only by the treasurer, there was an implied authority in the treasurer to execute and deliver such checks signed only by himself as treasurer, without any countersigning by the vice-president. But it does not appear herein that the plaintiff, prior to purchasing or cashing the check in suit, had any knowledge of such previous transactions between the payee and the defendant, and it cannot be urged that the defendant, so far as the plaintiff is concerned, is estopped from denying the authority.

The only remaining question is whether there is any presumed authority in the treasurer of the corporation to sign checks, or other negotiable instruments, as incidental to the general powers of his office, which would relieve purchasers of such instruments from the duty of inquiring into the authority af the person executing and issuing the same.

It is urged by the respondent that the treasurer was also the manager of the corporation; but it does not appear that this fact was ever brought to the knowledge' of the plaintiff before purchasing the check in suit so as to establish any principle of estoppel against the defendant.

I do not think that the office of treasurer carries with it. any implied power to execute and deliver negotiable instruments in 'the name of a corporation, regardless of the provisions of the by-laws; and it appears to be the established rule that, as to negotiable instruments alleged to have been issued by a corporation, any holder or purchaser thereof is presumed to have notice that it must be taken subject to proof of authority on the part of the person by whom it purports to have been made; and that the plaintiff, in an action brought iipon such an instrument, must affirmatively prove the authority of the officer signing the instrument.

The Court of Appeals in People’s Bank v. St. Anthony’s R. C. Church, 109 N. Y. 512, held: Proof that a promissory note, purporting to be made by a corporation, was signed by its president and secretary, does not show that it is a note of the corporation, without proof that it was made by its authority.”

The plaintiff has failed to show either actual or implied authority in the treasurer to- sign and deliver the check in suit, without the counter signature of the vice-president, and. has, therefore, failed to establish the allegation of his complaint that the défendant made, executed and delivered the check in suit.

The learned trial court, therefore, erred in directing a verdict in favor of the plaintiff, and the judgment must be reversed and a new trial ordered, with costs to the appellant to abide the event.

Lehman and Bijur, JJ., concur.

Judgment reversed and new trial ordered, with costs to appellant to abide event.  