Azzarello v. Richards

Summary

The court held that a defendant who signed and delivered a postdated check as the authorized agent of a known principal was not personally liable where the payee knew of the agency relationship and the defendant did not intend to incur individual liability. The court admitted parol evidence concerning the agency relationship and dismissed the complaint, entering judgment for the defendant with costs.

Holdings

1. An agent is not personally liable on a negotiable check when the agent acted within the scope of authority for a known and disclosed principal, the payee knew the agency facts when accepting the check, and the agent did not intend to assume personal liability.
2. Although parol evidence ordinarily is not admissible to relieve an agent who signs a negotiable instrument without a written or printed indication of agency, such evidence is admissible between parties who had knowledge of the relevant facts when the instrument was delivered.
3. The absence of consideration paid by plaintiff directly to defendant did not defeat the check because the postdated check was a negotiable instrument entitled to the presumption of consideration, and the presumption was not overcome merely because defendant received no personal consideration when the check was drawn at a third person's request.
4. The act of issuing a postdated check is not, standing alone, evidence of fraud or a violation of section 1292-a of the Penal Law; it represents that funds will be available on the check's future date, not necessarily when the check is delivered.

Questions Presented

1. Whether defendant, who signed and delivered a negotiable postdated check individually while acting as the authorized agent of a known and disclosed principal, was personally liable on the check.
2. Whether parol evidence was admissible between the original parties, where the payee knew the agency facts when accepting the check, to show that defendant signed only in a representative capacity and did not intend personal liability.
3. Whether the absence of consideration running from plaintiff to defendant defeated recovery on the check.
4. Whether delivery of the postdated check constituted fraud or violated section 1292-a of the Penal Law.

Disposition

dismissed