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Second Nat. Bank v. Curtiss

Appellate Division of the Supreme Court of New York, First Department
Mar 1, 1896
2 App. Div. 508 (N.Y. App. Div. 1896)


March Term, 1896.

John A. Taylor, for the appellants.

William Allen Butler and John Notman, for the respondent.

The action was based upon the allegation of fraud and the decision found that there was fraud. The only representation made by the defendants' testator was by means of the act of subscribing his name as a witness to the assignment of the stock. That act was a statement and representation by the testator, in effect, that the signature to the assignment was made by Westfall in the testator's presence, or was acknowledged by Westfall in testator's presence, to be his (Westfall's) signature, and that the testator thereupon at Westfall's request wrote his name as witness thereto. Such was fairly the meaning of the act in law and as generally understood in the business community. (1 Greenl. on Ev. [14th ed.] §§ 569, 569a.) It does not seem to us that it could be fairly said that this act implied merely that the testator believed or was of the opinion that the signature of Westfall was his genuine handwriting. Regarding this act as a statement and representation of the facts we have referred to, there can be no doubt but that the conclusion of fraud so far as it was essential to support the judgment necessarily followed. The testator stated and represented as facts what he knew to be untrue. Westfall did not sign the assignment in the presence of the testator, nor did he acknowledge the signature to be his, and the testator did not thereupon become the witness thereto at the request of Westfall. The testator was informed and knew at the time he signed his name as a witness to the assignment that the stock was to be used by Allen to secure a loan of money, and he understood, therefore, that his signature as a witness would be relied upon by the party making the loan as establishing the actual execution of the assignment. Nevertheless, instead of stating the facts truly as they occurred, which would have avoided any injury to the plaintiff, he wholly misrepresented the facts and thereby brought about the injury and damage complained of in this case.

The only question is, whether there was sufficient evidence of an intent to defraud, to support the finding of the referee and the judgment entered thereupon. It clearly appears that the defendants' testator made the representations as of his own knowledge for the purpose of inducing the loan; that is, with knowledge that they were to be made use of to secure the loan, and that they would be relied upon by the person making the loan. The purpose of the testator in thus asserting his own personal knowledge must have been to induce a belief of the facts represented, and the inference of fraud, therefore, necessarily resulted. This principle of law has been frequently asserted and is supported by abundant authority. ANDREWS, Ch. J., in Kountze v. Kennedy ( 147 N.Y. 124) said: "It has been held that one who falsely asserts a material fact, susceptible of accurate knowledge, to be true of his own knowledge, and thereby induces another to act upon the fact represented, to his prejudice, commits a fraud which will sustain an action for deceit. This is not an exception to, but an application of the principle that actual fraud must be shown to sustain such an action."

We are of the opinion that fraud was properly found by the referee so far as necessary to enable the plaintiff to maintain the action.

It is said that no damage resulted from this act of the defendants' testator because the plaintiff could have enforced against the railroad company its title to the stock; that Allen and the testator were the officials and agents for the railroad company, and acted within the scope of their authority as such in the assignment of the stock to the plaintiff. In Fifth Avenue Bank v. R.R. Co. ( 137 N.Y. 231) the act complained of was the issue of the stock itself, and that was clearly within the course of employment of the officers of the company. Here, however, the act which caused the damage was not the original issue of the stock of the company, but was the illegal assignment of stock already issued and held by a stockholder, and this act was not within the scope of the employment of such officers, and was not done as such officers, and was not binding upon the company itself. The damage here resulted solely from the act of the testator himself. The acts of Allen would not have produced the result, the procuring of the loan from the plaintiff. If the assignment had been really executed by Westfall, it would have carried good title to the fifty shares of stock to the plaintiff irrespective of the question whether the certificate itself was the one actually issued by the railroad company or not. If the whole certificate had been merely a copy and not the original at all, still the fifty shares of stock being really owned by Westfall, his execution and delivery of the assignment on the back of the certificate, would have operated to give plaintiff good title to the stock described therein, the same as though the assignment had been written upon the back of the original certificate. The language of the assignment in effect was: "For value received I hereby sell, assign, and transfer to plaintiff the within fifty shares of the within mentioned stock, and hereby authorize the plaintiff as attorney to make the necessary transfer on the books of the company." It was only necessary to refer to the body of the certificate itself for the purpose of identifying the stock intended to be assigned, and this would be made to appear as well by a copy as by the original certificate, the copy reading precisely the same as the original.

The damage, therefore, resulted solely from the invalidity of the assignment, and plaintiff was injured by relying upon the act, statement and representation of defendants' testator that, to his personal knowledge, the assignment was executed by Westfall himself.

We conclude that the decision of the referee was correct and that the judgment should be affirmed, with costs.


Judgment affirmed, with costs.

Summaries of

Second Nat. Bank v. Curtiss

Appellate Division of the Supreme Court of New York, First Department
Mar 1, 1896
2 App. Div. 508 (N.Y. App. Div. 1896)
Case details for

Second Nat. Bank v. Curtiss

Case Details

Full title:THE SECOND NATIONAL BANK of the City of New York, Respondent, v . BENJAMIN…

Court:Appellate Division of the Supreme Court of New York, First Department

Date published: Mar 1, 1896


2 App. Div. 508 (N.Y. App. Div. 1896)
37 N.Y.S. 1028

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