SECOND DEPARTMENT, APRIL TERM, 1897. [Vol. 15. paid by Frazier more than reached and covered the stone in question, and that as nothing was said by either party at the time of payment, the rule of application of payments to the earliest items of the account must obtain, whereby the stone in question was paid for, and all right of action therefor extinguished. The evidence, however, shows that the alleged payments consisted in part of notes given by Frazier to the plaintiff, by whom they were transferred to one McDermott, who obtained judgment on them which still remains uncollected. There remains also unpaid on the general bill over $3,800. Under these circumstances, the doctrine of application of payments does not apply, as the note of a debtor can hardly be considered a payment of the indebtedness. The Special Term decided that no part of the price of the stone in question had been paid; that the filing of a lien of $1,800, though too large in amount, was an honest mistake resulting from misapprehension existing in the plaintiff's mind as to the amount of stone which had virtually gone into the Waverly street work; that stone to the value of $1,021.50 had gone into such work, and ordered judg ment for the sum with interest, with judgment for the deficiency. There was ample evidence to justify these findings of fact, and we see no reason to disturb them. The judgment should be affirmed, with costs. All concurred. Judgment affirmed, with costs. L. BOLTON BANGS, Respondent, v. NATIONAL MACARONI COMPANY, Appellant. Corporate notes, issued in contemplation of insolvency, how avoided — evidence of authority to make a corporate note. The fact that certain promissory notes given by a defendant corporation were executed by it in contemplation of insolvency and with an intent to prefer the payment of a debt due from it to its officers, is no defense in an action brought by the holder of the notes to enforce the maker's liability thereon. Relief against such a preference must be had either by a motion or by an action brought by the receiver of the corporation to set aside the lien of the judgment or of the execution issued thereon. App. Div.] SECOND DEPARTMENT, APRIL TERM, 1897. Proof that a promissory note purporting to be made by a corporation was signed by its president and secretary, does not show that it was the note of the corporation, or prove that it was made by its authority. The by-laws of a corporation, containing a provision that the treasurer may incur indebtedness in the regular course of business for supplies and merchandise to a limited amount, do not authorize that officer to issue promissory notes for such indebtedness, and in order to establish the liability of the corporation upon notes so given, it is necessary to show either acquiescence or ratification by the trustees of the power assumed by the treasurer to issue them, or such a course of dealing by that officer, and such negligence on the part of the trustees, as would estop the corporation from denying the treasurer's authority. Evidence that the only benefit derived by the corporation from the notes in suit was the satisfaction and discharge of similar obligations of the corporation to other parties, as it is insufficient to show any liability of the defendant on the notes retired, does not prove that the corporation received any benefit from the notes issued to retire them. APPEAL by the defendant, the National Macaroni Company, by Frank Adams Acer, its ancillary receiver, and Frank Adams Acer, ancillary receiver of the defendant, the National Macaroni Company, from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 29th day of June, 1896, upon the verdict of a jury directed by the court, with notice of an intention to bring up for review upon such appeal an order entered in said clerk's office on the 13th day of July, 1896, denying the defendant's motion for a new trial made upon the minutes. This appeal was transferred from the first department to the second department. Ferdinand E. M. Bullowa, for the appellant. George W. Wickersham and George Coggill, for the respondent. CULLEN, J.: The action was brought to recover the amount of two promissory notes alleged to have been made by the defendant. The answer, in substance, denied the authority of the defendant's officers to make the notes, and set up that the notes were made and delivered while the defendant corporation was insolvent, with intent to prefer the payment of certain debts due from it to its officers. As to the second defense, that the notes were executed in contemplation of insolvency and for the purpose of giving preference, SECOND DEPARTMENT, APRIL TERM, 1897. [Vol. 15. we have held in the case of Welling v. Ivoroyd Co. (15 App. Div. 116) that these facts do not constitute a defense to the action, and that relief against such preference, if illegal, must be had either by a motion or by an action brought by the receiver to set aside the lien of the judgment or of the execution issued thereon. As to the first defense, we think that the plaintiff failed to establish authority in the defendant's officers to execute the note in suit. "Proof that a promissory note, purporting to be made by a corporation, was signed by its president and secretary, does not show that it is the note of the corporation, without proof that it was made by its authority." (People's Bank v. St. Anthony's R. C. Church, 109 N. Y. 512; De Bost v. Albert Palmer Co., 35 Hun, 386.) The by-laws of the defendant corporation were put in evidence. As we construe them, they conferred no authority to issue promissory notes, but, on the contrary, expressly forbade their execution. The exception, that the treasurer might incur indebtedness in the regular course of business for supplies and merchandise, for a sum not exceeding $1,000 in any single contract, nor in excess of $5,000 in any single month, did not authorize that officer to issue promissory notes for such indebtedness. In this state of the by-laws it was necessary for the plaintiff, in order to establish the liability of the defendant upon the notes, to show either acquiescence or ratification by the trustees of the power assumed by the treasurer to issue notes, or such a course of dealing by that officer and such negligence on the part of the trustees as would estop the defendant from denying the treasurer's authority. (National Bank v. Navassa Phosphate Co., 56 Hun, 136.) The evidence, we think, in this case is insufficient for this purpose. At most, it presented no more than a question of fact for the jury. It was, therefore, error to have directed a verdict for the plaintiff. This case is to be distinguished from that of National Spraker Bank v. Treadwell Co. (80 Hun, 363). It was there held that the corporation was liable because it had received the proceeds of the note, although the president was without authority, under the by-laws, to make such an obligation. In this case the only benefit derived by the defendant from the notes in suit was the satisfaction and discharge of similar obligations of the defendant to other parties. In fact, the evidence shows that the money borrowed on these App. Div.] SECOND DEPARTMENT, APRIL TERM, 1897. notes was loaned for the express purpose of taking up notes of the defendant on which the plaintiff's brother, the president of the defendant, was liable as indorser. The evidence, if insufficient to show any liability of the defendant on the notes in suit, was equally insufficient to establish any liability of defendant on the notes retired by the proceeds of the notes in suit. Hence, it was not shown conclusively that the defendant received the benefit of these last notes. The judgment and order should be reversed and a granted, costs to abide the event. All concurred. new trial Judgment and order reversed and new trial granted, costs to abide the event. HERSEY BROWN and CHARLES A. LENT, Respondents, v. CHARLES M. DENNISON and Others, Appellants. Partnership-right of one partner purchasing the business and good will from his copartners to state on its sign and letter heading that the new firm is the successor to the old one. The articles of copartnership of the firm of Dennison & Brown, after providing that at the expiration of the term of the partnership Dennison should have the option of purchasing the interest of the other partners, and the good will of the business, further provided in the fifteenth clause thereof that the term "good will" should not be so construed as to prohibit the parties thereto from going into a new business or partnership after the dissolution of the partnership thereby formed, or to solicit business in competition with the other parties thereto, but that none of the parties thereto, or their successors, should use the firm name of Dennison & Brown, without the consent of the parties of the first and second parts, their heirs and representatives. Dennison availed himself of the option, bought out the interest of his copartners, and associated his sons with himself in business, the new firm representing itself on its signs, letter headings, etc., as "Dennison & Sons, successors to Dennison & Brown." In an action brought by the retiring partners to restrain the new firm from using, in any manner, the firm name of Dennison & Brown in connection with their business and from holding themselves out as the successors of the latter firm, it was Held, that, apart from the provisions of the fifteenth clause, the defendant Dennison had, by his purchase of the interests of his copartners in the assets of SECOND DEPARTMENT, APRIL TERM, 1897. [Vol. 15. the partnership and in its good will, acquired the right to represent himself as the successor of the firm of Dennison & Brown; That the proper construction of the fifteenth clause prohibited only the transaction of business under the name of Dennison & Brown, a right which, were it not for this provision, the defendants would have had; and that, by the above clause, it was not intended that none of the parties should, in any manner, refer to his connection with that firm; That, as by the terms of the agreement Dennison was to take all of the assets of the partnership, including its contracts, and as the transfer implied an agreement on his part to carry out all such contracts and discharge all the debts of the partnership, it was proper that he should make known that upon him, or his firm, had devolved the obligations of the old firm. APPEAL by the defendants, Charles M. Dennison and others, from an order of the Supreme Court, made at the Kings County Special Term, bearing date the 23d day of February, 1897, and entered in the office of the clerk of the county of Kings, restraining the defendants from using the firm name of Dennison & Brown, or the name of Brown during the pendency of the action. A. B. Cruikshank, for the appellants. J. Orlando Harrisson, for the respondents. CULLEN, J.: Charles M. Dennison, one of the defendants, and the plaintiffs, Brown and Lent, as partners, for many years carried on the business of stationers and blank book manufacturers in the city of New York under the firm name of Dennison & Brown. By their articles of copartnership it was provided that, at the expiration of the partnership term, Dennison should have the option of purchasing the interests of the other partners, paying to each the sum which might appear upon the books of the firm to be due him as his share of the assets of the firm, and, in addition thereto, to Brown the sum of $1,200 "for his good will in the said business," and to Lent the sum of one dollar "for his good will in the said business," and Brown and Lent agreed that on the receipt of such moneys they would give to Dennison "a bill of sale of their entire respective interests and good will in the partnership and business hereby formed.” The articles of copartnership contained this further provision: "Fifteenth. It is expressly agreed and understood by and between the parties hereto, that the term 'good will' used in Article |