Citation Numbers: 124 A.D.2d 418, 507 N.Y.S.2d 518, 1986 N.Y. App. Div. LEXIS 61416
Filed Date: 10/30/1986
Status: Precedential
Modified Date: 10/28/2024
The uncontested facts contained in the moving and opposing papers are as follows: Defendant Daniel L. Prewett was, during the pertinent period, a general partner in defendant
After learning of Prewett’s personal misappropriation of their funds, plaintiffs brought this action in fraud and conversion against Prewett, Empire Management, E.V.C. IX and National Savings. National Savings and Empire Management claimed over against Mohawk National. Upon timely motions and cross motions, Special Term granted plaintiffs summary judgment against Prewett, Empire Management and E.V.C. IX, and summary judgment in favor of National Savings and Mohawk National dismissing all claims against them.
The sole appeal is by Empire Management from the dismissal of its claims against the two banks for conversion of funds payable to it by honoring plaintiffs’ check upon which it was payee, under the circumstances in which it was negotiated by Prewett. Empire Management’s primary argument is that the banks accepted Prewett’s forged and unauthorized indorsement, when they were at least put on inquiry that the check was being converted by Prewett for his personal use. Empire Management further argues that Prewett’s authority to indorse checks payable to it was not made known to Mohawk National until several weeks later, when the firm opened an account with that bank and filed an authorized signature card for Prewett.
Empire Management’s contentions are unavailing upon which to impose a duty of inquiry in its favor, as payee, which would have revealed Prewett’s conversion of the firm’s funds. Prewett did not forge the indorsement by signing his own name. Moreover, as a general partner under the firm’s partnership agreement, Prewett was legally authorized to negotiate checks payable to Empire Management (see, Partnership
Order affirmed, with costs. Main, J. P., Mikoll, Yesawich, Jr., Levine and Harvey, JJ., concur.