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Kushelewitz v. National City Bank of New York. National City Bank of New York

UNITED STATES COURT OF APPEALS SECOND CIRCUIT.


decided.: March 4, 1953.

KUSHELEWITZ ET AL.
v.
NATIONAL CITY BANK OF NEW YORK. NATIONAL CITY BANK OF NEW YORK V. FEDERAL RESERVE BANK OF NEW YORK.

Author: Frank

Before AUGUSTUS N. HAND, CHASE and FRANK, Circuit Judges.

FRANK, Circuit Judge.

Not only was no fraud involved, but the money was applied precisely as plaintiffs intended. Adams had asked Cassell if "he could advance me" [Adams] some money to be used for the business conducted under the corporate name, Adams being the sole owner of the business. Adams told Cassell to make his check payable to "Richard Dye Works, Inc." The promissory note received by plaintiffs for this loan was signed "Richard Dye Works, Inc.," and, at Cassell's request, was endorsed by Adams. The proceeds of the check were used exclusively for the purposes of the business conducted by Adams under the corporate name. Adams, in good faith, thought the corporation existed. Not until after plaintiffs began the present suit, did Adams learn that, by an oversight, his attorney had failed to complete the incorporation. In no conceivable way did plaintiff suffer any harm because of the absence of a corporation or the honoring of the check. The fact that Adams, not the supposed corporation, received the money was of no importance to plaintiffs. The corporate name was but a way of designating the business enterprise conducted by Adams; and it was to that enterprise that plaintiffs desired the money paid. The facts here are unlike those in the cases, cited by plaintiffs, which, in one way or another, involved some fraud or the like.

All parties agree that Pennsylvania "law" governs. We have found no Pennsylvania decisions squarely in point. But remarks in cases decided by the highest court of the state, dealing with the general subject, convince us that it would hold that, in circumstances like those before us here, plaintiff could not recover.*fn1

Reversed and remanded to the district court with directions to enter judgment dismissing the plaintiff's complaint against the National City Bank and dismissing the complaint of the National City Bank against the third-party defendant, the Federal Reserve Bank.


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