Freund, Proctor and Rogers.
The judgment is affirmed for the reasons expressed in the opinion of Judge Cleary in the court below.
On appeal from a judgment of the Superior Court, Law Division, where Judge Frank L. Cleary filed the following opinion. "This is a motion for summary judgment by the defendant, the First Bank and Trust Company, a banking corporation of New Jersey. The motion is based upon the pleadings and interrogatories and answers to interrogatories which have been filed in this cause and an affidavit of the defendant in support of the motion.
"Martin B. O'Connor, trustee in bankruptcy of the Amity Manufacturing Corporation, brings this suit against the defendant, the First Bank and Trust Company, to recover judgment against the defendant for the sum of $30,000. The Amity Manufacturing Corporation was adjudicated a bankrupt by order of the United States District Court for the District of New Jersey on October 21, 1948. The plaintiff was appointed trustee in bankruptcy. The complaint alleges that the Amity Manufacturing Corporation borrowed from the Seaboard Commercial Corporation on December 12, 1947, the sum of $30,000.
"A check was made out by Seaboard Commercial Corporation to the order of Amity Manufacturing Corporation in this amount. This check was endorsed as follows: 'Pay to the order of Armand De Mott, Amity Manufacturing Corporation by J. R. Zelenka, President Edward Foster, Authorized Signature.' From the interrogatories it appears that Armand De Mott transferred the shares of stock which he owned in the Amity Manufacturing Corporation as consideration. The check was endorsed by Armand De Mott and deposited in his account with the defendant bank. The defendant bank paid this sum of money into the account of the aforesaid Armand De Mott.
"The trustee in bankruptcy now asks that the defendant bank repay to him as trustee of the Amity Manufacturing Corporation the aforesaid sum of money. At the time of the transaction Armand De Mott was vice-president and secretary and also on the board of directors of the Amity Manufacturing Corporation.
"The defendant bank denies its liability to the trustee and sets up six separate defenses as follows: The first defense states that the plaintiff is estopped from instituting the present action because the stockholders, officers and directors of the Amity Manufacturing Corporation knew of the entire transaction and did nothing about itto the prejudice of the defendant; secondly, the transaction was ratified and confirmed by the Amity Manufacturing Corporation; thirdly, that the defendant is a holder in due course; fourthly, that the defendant acted as an agent for Armand De Mott; fifthly, that the defendant is protected from liability by the Uniform Fiduciaries Law; and sixthly, that the Amity Manufacturing Corporation had no beneficial interest in the check.
"The defendant bank had on file a corporation certificate and resolution which stated as follows:
"'RESOLVED that the funds of this corporation be deposited in the First Bank and Trust Company, Perth Amboy, New Jersey, subject to checks made in the corporate name signed by the President, Vice-President, Secretary, Treasurer, or either or any one of them (strike out officers not designated) who are also authorized to make, collect, discount, negotiate, endorse, assign and deposit in the corporate name, all checks, drafts, notes and negotiable paper, payable to or by this Corporation, also including non-negotiable papers; and, that all checks and instruments of the Corporation as aforesaid, including checks and instruments drawn to cash, bearer, or to the individual order of the officer, or officers signing or endorsing the same, shall be honored and paid by said bank and charged to our account. Said designated officer or officers are authorized to borrow money or bind this Corporation in any agreement or agreements with said bank. Any Officer, Agent, Employee and representative or other person, may deposit checks, or other instruments of this Corporation for credit to the account of this Corporation, without signatures, and for the purpose of so doing, may endorse said instruments for such deposit, and nothing herein stated shall be construed to the contrary. This resolution shall be binding on this Corporation unless and until and from such time only as another resolution shall be duly adopted by this Corporation which shall change the effect hereof and the receipt of a true copy of such new resolutions shall be duly acknowledged in writing by the executive officer in charge of the bank. This written acknowledgment shall constitute the only competent and admissible evidence of such receipt in any instance wherein the Corporation may claim such new resolution to have been adopted and received by the bank and deny authority of any officer or officers designated in the original resolution and certificate furnished the bank.'
"The resolution was dated September 9, 1947, and was in effect at the time that De Mott deposited the check to his account. There is a notation upon the certificate and resolution filed with the bank to the effect that all checks of the corporation over the amount of $500 must be signed by any two of the following: J. R. Zelenka; A. De Mott; E. Foster. The check was in fact signed by J. R. Zelenka and E. Foster.
"At the time of the transaction Zelenka was president-treasurer and was the owner of 343 shares of stock. Armand De Mott was the vice-president and secretary and held 342 shares of stock. Zelenka, De Mott and James De Mott comprised the board of directors. James De Mott held one share of stock.
"The substance of the matter before me revolves around the question of whether title to the negotiable instrument passed from the Amity Manufacturing Corporation to Armand De Mott and subsequently to the defendant bank in such a manner as to constitute the defendant bank the legal holder of the check in issue.
"It is well settled, of course, that the plaintiff, receiver for the Amity Manufacturing Corporation, stands in the shoes of the aforesaid corporation and has no greater right than the corporation itself. Cohen v. Miller , 5 N.J. Super. 451 (Ch. Div. 1949).
"Counsel for both plaintiff and defendant in their briefs admit, as is the case, that a corporation has the general power to make and endorse negotiable paper, Fifth Ward Savings Bank v. First National Bank , 48 N.J.L. 513 (E. & A. 1886), and a corporation, however, must act through an officer, employee or other agent who may have the express or apparent authority to endorse checks payable to the corporation. Whether or not this authority has been given is a matter within the law of agency. Krueger v. Vogel's Farm, Inc. , 15 N.J. Misc. 209 (Sup. Ct. 1937). The endorsement of a negotiable instrument by an officer, employee or other agent of a corporation who is not empowered to make or endorse commercial paper is in effect the equivalent of a forged making or endorsement which does not ...