Booth v. Farmers' & Mechanics' National Bank , 1872 N.Y. LEXIS 436 ( 1872 )

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] A party who, after having for a valuable consideration assigned a judgment, satisfies it, clearly incurs a liability to his assignee. If the satisfaction piece is given on payment of the judgment, the money had be recovered by the assignee in an action for money had and received, and if the satisfaction is given without payment, and the assignee is prejudiced thereby, he is entitled to recover of his assignor the damages sustained. In the absence of proof to the contrary, the presumption arising from the giving of a satisfaction piece is that it was given upon payment of the judgment. The satisfaction piece is an acknowledgment of the satisfaction of the judgment. This is equivalent to an acknowledgment of its payment, which is the proper and usual way of satisfying it and is sufficient prima facie as an admission to charge the party giving it with the receipt of the amount.

If the defendant in this case were a natural person, and had personally executed the satisfaction piece, it can hardly be controverted that the evidence would be sufficient prima facie to charge him with having received the amount of the judgment. But being a corporation, and the satisfaction piece having been executed by its president, it is claimed and was held in the court below that the defendant is not liable.

It was admitted upon the trial that the president was the financial officer of the defendant. The judgment had been recovered by the defendant against the makers of a promissory note. Clearly, under ordinary circumstances, the president was empowered to receive payment of this note, or of the judgments recovered upon it, and this power necessarily included authority to give such acquittances and discharges as the debtors were entitled to receive on making payment. The giving of a satisfaction piece was therefore within the scope of the official authority of the president, and prima facie evidence of the receipt by the bank of the amount due on the judgment.

It is claimed, however, that the authority of the president, and the bank itself, to collect and satisfy the judgment ceased when the bank assigned it to a third party, and that therefore the bank is not bound by what the president did after such assignment.

This court has in several cases decided adversely to the doctrine which lies at the foundation of this position. When an officer does an act which is within the general scope of his powers, although circumstances may exist which render the particular act a violation of his duty, the corporation is nevertheless bound by his act as to persons dealing in ignorance of those circumstances, and is responsible to innocent third parties who have sustained damages occasioned by such act. And the liability of the corporation for the consequences of acts of its officers done within the scope of their general powers is not affected by the fact that the act which the officer has assumed to do is one which the corporation itself could not rightfully do. A corporation may do wrong through its agents as well as a private individual. (N.Y. N.H.R.R. v. Schuyler,34 N.Y., 30; Farmers' Mech. Bank v. Butchers' Drovers' Bank, 16 id., 125; Bissell v. Mich. South. R.R., 22 id., 258; Bank ofGenesee v. Patchin Bank, 13 id., 309, and S.C., 19 id., 312.)

The filing of the satisfaction piece and its entry on the docket were effectual to discharge the lien of the judgment upon the real estate of the debtors, at least as to bona fide purchasers. (2 R.S., 360, § 12, 362, § 22; Taylor v. Ranney, 4 Hill, 619; Laws, 1820, p. 334, §§ 25, 34, 335; Laws, 1847, p. 334, §§ 52, 65, 338; Code, § 282.)

It also discharged the debtors themselves if they paid the judgment in ignorance of the assignment. It clearly caused damage to the plaintiff, and was a violation of the obligation of the bank resulting from the assignment, even if it should appear that the money was not paid.

It is objected that the satisfaction piece was not executed in the name of the bank or under its seal. It sufficiently appears, however, upon the face of the instrument that it was executed by the president in his official capacity and in the business of the bank, and on its behalf. It is not capable of any other construction. This made it as binding upon the bank as if its name had been formally prefixed to the signature of its president. (1 Den., 613; 19 N.Y., 312; 16 id., 125.)

We think also that it sufficiently identifies and describes the judgment. It is inaccurate in stating that the judgment was between the Farmers' and Mechanics' Bank of Rochester, plaintiff, and the McLeans, Goddard and Flint, defendants, instead of stating that it was against the McLeans and Goddard impleaded with Flint, and also stating in another place that it was against Flint and others. But we do not think that this inaccuracy deprived it of validity, as the names of the defendants against whom the judgment was recovered, and the date and amount are correctly set forth, and it was proved that there was no other judgment to which any part of the description could apply.

The judgment should be reversed, and a new trial ordered, with costs to abide the event.

All concur except CHURCH, Ch. J., not voting.

Judgment reversed.