National Bank v. . Van Derwerker , 74 N.Y. 234 ( 1878 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] We have examined with care the points urged by the learned counsel for the appellants against the correctness of the judgments in these cases and find no sufficient reason for reversing them. We think that they should be affirmed. Upon the question as to which there was a difference of opinion in the court below we are not able to assent to the conclusions stated in the memorandum of the dissenting judge. According to the explicit provisions of the statute with regard to suits against associations of more than seven persons, the association known as "The Old Saratoga Union Mercantile Association" was properly sued in the name of its president, and in the action brought against it the summons ran properly against William P. Ostrander, president of "the Old Saratoga Union Mercantile Association," as defendant. (Laws of 1849, chap. 258, sec. 1); and there is nothing in the numerous authorities cited by the appellants' counsel to the contrary. Of these, those most in analogy to the present are suits by and against banking corporations organized under the general banking law of 1838. In suits by and against such corporations it has been uniformly adjudged that while the action may be properly brought in the name of the president of the bank, yet the pleading must allege the contract to have been made, the dealing to have been had, or the obligation to have been incurred with the bank itself, and if the allegation is of contract or dealing with the person named as defendant, the president of the bank, it will not be an action by or against the bank but at most by or against such persons individually. (Delafield v. Kinney, 24 Wend., 345; TheOgdensburgh Bank v. Van Rensselaer, 6 Hill, 240; Root v.Price, 22 How. Pr., 372.) It is not necessary to decide whether in this respect there is a distinction, as urged by the respondent's counsel, between banking corporations and ordinary associations of more than seven persons provided for in the act of 1849, and that while a banking corporation must under the express provisions of the statute use in its dealings its corporate name and not the name of its president, such is not the case as to these associations; for we are of the opinion that the complaint in the action against Ostrander, president, etc., did sufficiently set forth a contract made by the association and a liability incurred by it and not by Ostrander personally. It alleges that the defendant, the Old Saratoga Union Mercantile Association was a joint stock association, etc., of which Ostrander was president; that as such president and by the authority of the association, Ostrander made the note, which is set out in full; that when the note became due it was presented to the said defendant, and that the said defendant was justly indebted to the plaintiff thereupon. This sufficiently alleged that the note set out was a note of the association and that the debt thereby created was owing from the association and not from Ostrander personally. The recovery therefore in that action was a compliance with the provision of the statute requiring that judgment should be first obtained against the association. (Laws 1853, chap. 153.) Both the judgment and execution were properly against William P. Ostrander, president, etc., as by the very terms of the act the association could only be sued in the name of its president, and the action having been brought against him as the nominal defendant, the judgment and execution must follow the summons and could only be against him as such president, but bound in accordance with the provisions of the first and third sections, the joint property of the association and not his individual property. (See Laws 1849, chap. 253, §§ 1, 3.)

On the trial of the present actions the existence of the association and its liability for the notes sued upon were sufficiently proved. It appeared that a meeting was held, the name of the association agreed upon, a constitution and by-laws adopted, president and directors appointed, that under such organization business was actually conducted for a considerable period of time. It was unnecessary that there should be any subscription to such association in writing by the members thereof. The statute requires no greater formalities in that respect for the formation of such associations than for the formation of ordinary partnerships. But as to partnerships although to endure for a longer period than a year, it has been held that they are not within the statute of frauds. (Smith v.Tarlton, 2 Barb. Ch., 336.)

The notes were proved to have been made by the authority of the association and to have been signed by an officer thereof authorized to bind it. It was not necessary for the plaintiff under these circumstances to show that the money lent by it thereon was actually applied for the benefit of the association, although we think the evidence did prove such fact.

There was no error affecting the judgment in the admission of the evidence of the cashier of his "understanding" that the notes were discounted for the association. This, if improper, could not harm the defendants, as it appeared without dispute that such was the fact, irrespective of his understanding of it.

The judgments must be affirmed, with costs.

All concur, except MILLER and EARL, JJ., absent.

Judgments affirmed.