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Budelman v. White''s Express & Transfer Co.

Decided: April 11, 1958.


Price, Schettino and Haneman. The opinion of the court was delivered by Haneman, J.A.D.


Plaintiff appeals from a final judgment of the Superior Court, Law Division, entered by the trial court sitting without a jury, a jury trial having been expressly waived by the parties.

Plaintiff sought to recover $5,000, plus interest, from defendant upon three alternative demands for relief: (1) upon a promissory note allegedly made by defendant and negotiated to plaintiff; (2) for the payment of money loaned; (3) upon the theory that the defendant has been unjustly enriched in that it received the benefit of $5,000 belonging to plaintiff.

In addition to a general denial, the following separate defenses are raised in the pretrial order: (1) the note was made without authority and was not the note of defendant; (2) plaintiff was not a holder in due course; (3) defendant denied obtaining any loan from plaintiff and denied receiving any monies from plaintiff; (4) it was not unduly enriched.

The facts are as follows:

H. R. McCluckie was secretary-treasurer of defendant White's Express & Transfer Co., Inc., a closely held corporation engaged in the trucking business. He held four shares of the 200 shares of the capital stock issued and outstanding. The remaining 196 shares were owned by the White family,

as follows: Herbert White, 188 shares; his son, 4 shares, and his wife, 4 shares.

McCluckie had an option from White to purchase the balance of the stock of defendant for $47,500. As a part of that agreement, and in addition to the payment of that sum, McCluckie agreed to operate the business and pay its substantial debts and operating costs.

On or about October 19, 1956 defendant opened a bank account with the First National Bank of Jersey City. It filed with that bank, upon a form prepared and submitted by the bank, an instrument which, inter alia , recites in full a resolution which was allegedly adopted by defendant on October 19, 1956, and which allegedly appears on the corporate minutes, all of which is certified by McCluckie as secretary. Plaintiff contends that this resolution is a general authority to certain officers, including McCluckie, to make, execute, deliver, etc., various negotiable instruments in connection with defendant's business. However, a reading of the resolution demonstrates that the authority allegedly given is limited solely to transactions with the bank in reference to the negotiable paper of the corporation. The purpose of such resolution is to protect the depository bank in all of its dealings with the negotiable paper of its corporate depositors.

White testified that McCluckie had authority to sign checks but no general authority to borrow money, except from the First National Bank of Jersey City, as provided in the resolution filed with said bank.

Plaintiff is employed as a secretary in a firm which engaged defendant as a trucker of its goods. She testified that her employer had cashed checks for McCluckie on past occasions; that those checks were drawn on defendant's account and signed by McCluckie, and that those checks bore the legend "authorized signature."

Plaintiff knew that McCluckie was connected with defendant but did not know his official position with defendant or what authority, if any, he had to deal for defendant. She had known of defendant for some time prior to the

transaction upon which suit is here brought but had no knowledge of its financial standing or of its ability to pay its obligations. She had made no inquiry concerning any of the foregoing matters.

McCluckie testified that on or about October 19, 1956 defendant was in poor financial condition and could not borrow money from its depository bank. He admitted that he did not advise White that he was borrowing $5,000 for the benefit of the corporation and pledging its credit for the repayment thereof. He insisted that the money was being borrowed for defendant and that he had the power and authority to execute promissory notes generally for and on behalf of defendant. The trial court stated in his oral conclusions that he was "not impressed with the veracity of McCluckie at all."

Plaintiff testified that on October 19, 1956 McCluckie told her that defendant needed $5,000 and she agreed to lend that sum. She withdrew $5,000 from her account in a building and loan association and obtained from another bank a cashier's check in that amount, which was made payable to H.R. McCluckie. On or about October 19, 1956 she delivered that check to McCluckie. On or about October 22, 1956 McCluckie delivered to her a promissory note, which reads as follows:


October 22, 1956

Ninety days (90) after date we promise to pay to the order of H. R. McCluckie Five Thousand Dollars at First National Bank of ...

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