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Executors. One of several executors of a will cannot, without the cooperation of the other executors, bind the assets of the estate by his signature on negotiable paper. Union Bank v. Sullivan, (1915) 214 N. Y. 332, 108

N. E. 558.

Corporate note not countersigned by treasurer.-A note signed in the name of a corporation by its president and for which the corporation has received value and which is executed without fraud, binds the corporation, although its by-laws provide that its notes shall be countersigned by its treasurer as well as signed by its president. Bigelow Co. v. Automatic Gas Producer Co., (1907) 56 Misc. 389, 107 N. Y. S. 894.

Husband and wife.-A married woman may authorize her husband to sign a note which will bind her separate estate. Noel v. Kinney, (1887) 106 N. Y. 74, 12 N. E. 351, 60 A. S. R. 423.

§ 39. Liability of person signing as agent. Where the instrument contains or a person adds to his signature words indicating that he signs for or on behalf of a principal, or in a representative capacity, he is not liable on the instrument if he was duly authorized; but the mere addition of words describing him as an agent, or as filling a representative character, without disclosing his principal, does not exempt him from personal liability.

This section was derived from the Negotiable Instruments Law of 1897, § 39.

Liability of principal for signature by agent: see supra, § 38. Indorsement of instrument payable to cashier of bank: see infra, § 72. Indorsement in representative capacity: see infra, § 74.

Liability of agent or broker: see infra, § 119.

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Joint note signed by both principal and agent.- Where the body of a note says we promise" and it is signed with the name of one person and the initials of another under it, the presumption is that it is a joint note and that both are liable as makers; but this presumption may be rebutted, and it may be shown that the person signing his initials was not intended to be bound as a maker, but was merely the agent of the maker and signed the maker's name thereto and added his initials as agent. Palmer v. Stephens, (1845) 1 Denio 471.

Knowledge of payee that agent was not to be personally bound.—Where an agent signs an instrument with the addition of words which are merely descriptio personae, and the payee knows that such person is merely acting as agent for another and that he does not intend to bind himself individually, the agent is not liable personally to the payee. Kerby v. Ruegamer, (1905) 107 App. Div. 491, 95 N. Y. S. 408; Crandall v. Rollins, (1903) 83 App. Div. 618, 82 N. Y. S. 317; Bush v. Gilmore, (1899) 45 App. Div. 89, 61 N. Y. S. 682; Hicks v. Hinde, (1850) 6 How. Pr. 1. But see Hills v. Bannister, (1827) 8 Cow. 31.

While it may be that, as to holders in due course of negotiable paper signed by one in a representative capacity without adding the name of the principal, the agent is personally liable, as to the payees in the note a different rule prevails, and the agent is permitted to show that he signed in a representative capacity and he may thus escape personal liability. Megowan v. Peterson, (1902) 173 N. Y. 1, 65 N. E. 738.

Officer of corporation.-Where a note is signed, not in the name of the corporation, but in the name of an officer with an addition of the office he holds, the name of the office is deemed mere descriptio personae, and the

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officer is, as against a holder in due course of the instrument, liable individually, and the corporation is not liable. Brooklyn First Nat. Bank v. Wallis, (1896) 150 N. Y. 455, 44 N. E. 1038.

"Where a negotiable promissory note has been given for the payment of a debt contracted by a corporation, and the language of the promise does not disclose the corporate obligation, and the signatures to the paper are in the names of individuals, a holder, taking bona fide and without notice of the circumstances of its making, is entitled to hold the note as to the personal undertaking of its signers, notwithstanding they affix to their names the title of an office. Such an affix will be regarded as descriptive of the persons and not of the character of the liability. Unless the promise purports to be by the corporation, it is that of the persons who subscribe to it; and the fact of adding to their names an abbreviation of some official title has no legal signification as qualifying their obligation, and imposes no obligation upon the corporation whose officers they may be." Casco Nat. Bank v. Clark, (1893) 139 N. Y. 307, 34 N. E. 908, 36 A. S. R. 705.

But, as against one not a holder in due course of the instrument, an officer of a corporation, who signs a note with his name and description of his office, may show that the obligation is one of the corporation and that the corporation received the consideration therefor and that it was not intended that he be bound individually. Bush v. Gilmore, (1899) 45 App. Div. 89, 61 N. Y. S. 682.

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Where a bill was drawn on a certain person president of the Rosendale Manufacturing Co.", and accepted by him with the same annex to his name, it was held that the bill could not be deemed the obligation of the company, and that such president was the only person liable. Moss v. Livingston, (1850) 4 N. Y. 208. One signing a note with the description that he is president of a certain corporation is liable personally; the note is his, and is not the note of the company. Barker v. Mechanic Fire Ins. Co., (1829) 3 Wend. 94, 20 Am. Dec. 664.

Corporate note.-An instrument in the form of a promissory note, subscribed with the name of a corporation and the name of an individual with the designation "Treas." is an obligation of the corporation, not of the treasurer individually. Union Nat. Bank v. Scott, (1900) 53 App. Div. 65, 66 N. Y. S. 145. And see Dunbar Box, etc., Co. v. Martin, (1907) 53 Misc. 312, 103 N. Y. S. 91, holding that, where the body of the note said we promise to pay and the note was signed with the name of the corporation and the name of its president, parol evidence was admissible to show that the note was the act of the corporation only, and not the joint note of it and its president.

Administrator.-A note, which was given by an administratrix to pay a claim against the estate and which was signed "Annie M. Phillips, Admx." has been held to be the individual obligation of the administratrix. Jenkinš v. Phillips, (1899) 41 App. Div. 389, 58 N. Y. S. 788.

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Trustees. Where certain persons signed a note as trustees, etc.," and the payees at the time of receiving the note had full knowledge that the signers were acting in a trust capacity and not individually, as to such payee, they are not liable individually. Kerby v. Ruegamer, (1905) 107 App. Div. 491, 95 N. Y. S. 408.

A note signed by certain persons "Trustees of Union Religious Society has been held to be the personal obligation of such persons. Hills v. Bannister, (1827) 8 Cow. 31.

Liability of unauthorized agent. Where one makes a note as agent for another, there is an implied warranty on the part of such agent that he has authority to do it for and in the name of the principal; and, if in fact he is without such authority, he is liable upon his warranty for the damages resulting from the breach. Such liability, however, does not accompany a transfer of the note, unless the claim founded upon the warranty is also

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§§ 40-42

assigned to the transferee. Miller v. Reynolds, (1895) 92 Hun 400, 36 N. Y. S. 660.

If an agent transferring commercial paper does not disclose the name of his principal and the paper proves to be a forgery, the agent is personally liable to the transferee for the consideration received. Holt v. Ross, (1873) 54 N. Y. 472, 13 Am. Rep. 615. An authorized agent is personally liable to the payee of a note, and the fact that the principal subsequently ratifies the act of the agent does not release the agent. Palmer v. Stephens, (1845) 1 Denio 471.

§ 40. Signature by procuration; effect of. A signature by "procuration" operates as notice that the agent has but a limited authority to sign, and the principal is bound only in case the agent in so signing acted within the actual limits of his authority.

This section was derived from the Negotiable Instruments Law of 1897, 8 40. signature" defined: see GENERAL CONSTRUCTION LAW, § 46.

Term"

41. Effect of indorsement by infant or corporation. The indorsement or assignment of the instrument by a corporation or by an infant passes the property therein, notwithstanding that from want of capacity the corporation or infant may incur no liability thereon.

This section was derived from the Negotiable Instruments Law of 1897, § 41.

Corporation as accommodation indorser.-This section provides for the passing of title by indorsement and does not pertain to the incurring of liability by a corporation. The rule that a business corporation is not liable as an accommodation indorser, is not affected by this section. Oppenheim v. Simon Reigel Cigar Co., (1904) 90 N. Y. S. 355. See infra, § 55, as to accommodation parties.

§ 42. Forged signature; effect of. Where a signature is forged or made without authority of the person whose signature it purports to be, it is wholly inoperative, and no right to retain the instrument, or to give a discharge therefor, or to enforce payment thereof against any party thereto, can be acquired through or under such signature, unless the party, against whom it is sought to enforce such right, is precluded from setting up the forgery or want of authority.

This section was derived from the Negotiable Instruments Law of 1897, § 42.

Liability of bank to depositor on account of forged check: see infra, § 326. Admission by acceptor of genuineness of drawer's signature: see infra, § 112. Warranty by indorser that instrument is genuine: see infra, §§ 115, 116. Alteration of instrument: see infra, §§ 205, 206.

$ 42

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Term “sig

Using false

Signature defined: see GENERAL CONSTRUCTION LAW, § 46. nature" is used in Penal Law: seg PENAL LAW, § 3, subd. 7. check or order for payment of money: see PENAL LAW, § 938. Obtaining money or property by fraudulent draft: see PENAL LAW, § 1293. Forgery generally: see PENAL LAW, § 880 et seq.

Instruments payable to bearer. Where an instrument is payable to bearer, it may be negotiated by delivery without indorsement, and hence the forgery of an indorsement of such an instrument does not necessarily preclude a transferee from acquiring a good title thereto. Seaboard Nat. Bank v. Bank of America, (1908) 193 N. Y. 26, 85 N. E. 829, 22 L. R. A. (N. S.) 499, affirming 51 Misc. 103, 100 N. Y. S. 740; Phillips v. Mercantile Nat. Bank, (1894) 140 N. Y. 556, 35 N. E. 982, 37 A. S. R. 596, 23 L. R. A. 584; Bloomingdale v. National Butchers', etc., Bank, (1901) 33 Misc. 594, 68 N. Y. S. 35. See also Trust Co. of America v. Hamilton Bank, (1908) 127 App. Div. 515, 112 N. Y. S. 84. See supra, § 28, as to when an instrument is payable to bearer. See infra, § 60, as to the negotiation of instruments.

Forgery of indorsement.-Where an instrument is not payable to bearer so that the indorsement of the payee is required for negotiation, title thereto is not transferred if the indorsement of the payee is forged, and the bank or person making the payment on the forged indorsement does so at his peril. Seaboard Nat. Bank v. Bank of America, (1908) 193 N. Y. 26, 85 N. E. 829, 22 L. R. A. (N. S.) 499, affirming 51 Misc. 103, 100 N. Y. S. 740; Shipman v. New York Bank, (1891) 126 N. Y. 318, 27 N. E. 371, 22 A. S. R. 821, 112 L. R. A. 791; Stein v. Empire Trust Co., (1912) 148 App. Div. 850, 133 N. Y. S. 517; Bloomingdale v. National Butchers', etc., Bank, (1901) 33 Misc. 594, 68 N. Y. S. 35. See also infra, § 326.

Where a check with a forged indorsement has been deposited in a bank for collection, the bank does not obtain title thereto, and the depositor cannot compel the bank to pay the proceeds to him, but the proceeds of the check belong to the payee whose indorsement has been forged. Stein v. Empire Trust Co., (1912) 148 App. Div. 850, 133 N. Y. S. 517. Where a bank collects a check, upon which the payee's indorsement has been forged, it cannot retain the money as against such payee. Standard Steam Specialty Co. v. Corn Exch. Bank, (1914) 84 Misc. 445, 146 N. Y. S. 181.

Where the indorsement of the payee of a check is forged and the bank cashing the same has failed to make payment according to the written directions of the depositor, it cannot charge the payment to the depositor, unless it shows either that the payment was made to the payee actually intended to receive payment though improperly described, or that the conduct of the depositor has been such as to impose a liability upon him beyond his intent. Kobre v. Corn Exch. Bank, (1913) 79 Misc. 212, 139 N. Y. S. 890.

Diversion of checks.-Where an agent has authority to indorse the checks of his principal for deposit in certain banks for the principal, but he diverts checks to his personal benefit, the indorsement of the principal is not deemed a forgery within the meaning of this section, and a bank receiving the checks in due course without notice of the limitation of the agent's authority is not liable to the principal as for a conversion of such checks. Salen v. New York Bank, (1906) 110 App. Div. 636, 97 N. Y. S. 361.

Payment by bank.-Where the bank on which a forged check payable to bearer is drawn, pays the same relying upon the unqualified indorsement of the holder, and the holder was in the habit of cashing checks for the drawer whose name was forged and was in a position to know the genuineness of his signature, the bank may recover the money of the indorser, when the mistake of the bank in paying the check has not acted to the prejudice of the holder. Williamsburgh Trust Co. v. Tum Suden, (1907) 120 App. Div. 518, 105 N. Y. S. 335.

Travelers' checks.-A traveler's check which contains the signature of the purchaser thereof, but is not effective until his signature is countersigned

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thereon in the presence of an agent of the banking company issuing the same, requires the second signature of the purchaser to give it currency; and, if it is stolen and the name of the purchaser forged, the loss falls on the banking company, not the purchaser. Sullivan v. Knauth, (1914) 161 App. Div. 148, 146 N. Y. S. 583.

Effect of certification of check with forged indorsement.-Where the issuance of a check is procured by fraud and the indorsement of the payee is in effect forged and the wrongdoer procures the certification thereof, the funds represented thereby do not pass from the drawer, and he can recover the same from the bank which has charged the check to his account. Anglo-South American Bank v. National City Bank, (1914) 161 App. Div. 268, 146 N. Y. S. 457, affirmed without opinion (1916) 217 N. Y. 726, 112 N. E. 1053. And see infra, §§ 112 and 323, as to the certification of forged checks.