
    John P. Gaitley, Respondent, v. Albany Foundry Company, Appellant.
    Third Department,
    May 7, 1913.
    Corporation—liability of corporation on note given for loans — assignment of claim to president — constructive trust.
    A corporation is liable on a note countersigned by its president for money loaned to it which was used for the purchase of claims against the corporation, which claims when paid were assigned to the president personally.
    Although the claims were in form assigned to the president of the defendant he holds them in trust for it.
    Appeal by the defendant, the Albany Foundry Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Albany on the 17th day of October, 1912, upon the verdict of a jury rendered by direction of the court after a trial at the Albany Trial Term.'
    
      William O. Van Loon, for the appellant.
    
      Countryman, Nellis, Du Bois & McDermott [Thomas F. McDermott of counsel], for the respondent.
   Smith, P. J.:

This action is brought to recover upon a promissory note for $3,000, executed April 5,1911, payable on demand to the plaintiff, and signed “ Albany Foundry Company. A. P. Deeds, Treasurer. Countersigned; John E. Gaitley.” John E. Gaitley was the president of the corporation. Upon proof of the execution of this note, which recited that it was for value received, plaintiff rested. The defendant for defense showed that the note was given for moneys borrowed by the defendant; that the moneys went into the account of the defendant corporation and were paid out by the treasurer upon order of the president for the purchase of claims against the defendant corporation; that upon the payment of those claims an assignment was executed to John E. Gaitley personally. Upon this evidence it was contended that it does not appear that the note was authorized by the corporation, and it does appear that it was used for the personal benefit of the president of the corporation and not that of the corporation. Waiving the question as to the proof of authority to execute it and the presumptions which apply, we are of the opinion that the corporation is shown to have received the benefits of the loan, and, therefore, is not in position to question its liability. If these claims were purchased from the funds of the corporation the claims became the property of the corporation, and it does not matter whether the claims were assigned in form to the president personally or whether the claims were released to the corporation. The president as matter of law holds all such claims thus assigned to him in trust for the corporation, and such trust would be declared either at the instance of the corporation or at the instance of any other creditors of the corporation who might be interested in the question. For this reason we are of opinion that the court properly directed a verdict for the plaintiff, and that the judgment should, therefore, be affirmed, with costs.

Judgment unanimously affirmed, with costs.  