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Norman v. Beling

Decided: June 28, 1960.

GEORGE C. NORMAN, PLAINTIFF-RESPONDENT,
v.
CHRISTOPHER A. BELING, DEFENDANT-APPELLANT



On appeal from Superior Court, Appellate Division, whose opinion is reported in 58 N.J. Super. 575.

For reversal -- Chief Justice Weintraub, and Justices Burling, Jacobs, Francis, Proctor, Hall and Schettino. For affirmance -- None. The opinion of the court was delivered by Burling, J.

Burling

Plaintiff, an endorsee of a series of promissory notes, brought suit in the Essex County District Court against the defendant alleging that the defendant was liable on the notes as a co-maker. After a trial without a jury, the trial court entered judgment in favor of defendant. Plaintiff appealed and the Superior Court, Appellate Division, reversed the trial court and remanded the cause for entry of judgment in favor of plaintiff. 58 N.J. Super. 575. We granted certification. 31 N.J. 556.

The following is a sample of the notes being sued upon in the instant case:

$50.00

April 8, 1957

Three Hundred sixty-six days AFTER DATE We PROMISE TO PAY TO THE ORDER OF J. H. Laporte and Company Fifty and 00/100 DOLLARS PAYABLE AT National State Bank of Newark VALUE RECEIVED TEAL CORPORATION

J. Harold Semar

Christopher A. Beling

No.

DUE April 1, 1958

Except for dates of maturity, the notes involved were identical to the above. In all of the notes, "Teal Corporation" was typewritten on the notes and the individuals' signatures were in handwriting.

It appears that the Teal Corporation, of which the defendant in this suit, Christopher A. Beling, was treasurer, owed a debt to J. H. Laporte & Company for services performed for the corporation. Laporte met with Beling and J. Harold Semar, president of Teal, to discuss a manner of payment of the debt. Apparently no agreement was reached but subsequently Laporte received 36 notes in the mail similar in form to the note reproduced above and having staggered maturity dates. The notes were thereafter negotiated to plaintiff. It appears to be conceded that plaintiff had no knowledge of the basis of the transaction between Teal and

Laporte or the relationship of Beling and Semar to the corporation.

The first twenty-one of the notes to become due were presented as directed in the notes and were honored by the Teal Corporation. None of the subsequently due notes were honored. Plaintiff thereupon resorted to Beling for satisfaction, and the present suit was instituted. The original complaint alleged that three of the outstanding notes had become due and were dishonored; but at the time of the hearing in the trial court a supplemental complaint was filed alleging that the remaining twelve notes had since become due and had been dishonored.

At the trial, plaintiff introduced the notes into evidence, then rested his case. Defendant thereupon sought to introduce evidence tending to show that defendant intended to sign the notes in his capacity as an officer of the corporation and not as a maker. The basis of this offering was that the notes were ambiguous on their face as to defendant's status with relation to the notes. The trial court allowed the evidence over plaintiff's objection. The effect of this evidence tended to show that Semar was president and Beling treasurer of the Teal Corporation, that they had signed the notes in those capacities in accordance with the corporation's by-laws, and that they never intended to bind themselves individually.

On this record, the trial court entered judgment for defendant, having found that defendant's status on the notes was not clear from a reading of the notes and that defendant intended to sign the notes in a representative capacity rather than in a manner which would bind him personally. On appeal, the Superior Court, Appellate Division, held that the instruments revealed unambiguously that defendant bound himself individually on the instruments because the form of the signature would lead a reasonably prudent man to believe that such an effect was intended. On this basis the Superior Court, Appellate Division, reversed the trial court and ordered judgment entered

in plaintiff's behalf. We must decide, therefore, whether the defendant, because of the form of his signature, was liable on the instruments without resort to extrinsic evidence, or whether the instruments were so ambiguous on this point as to require parol evidence to explain the subscriber's intent. If the latter course is selected, we must then decide whether ...


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