On January 14, 2022, Justice Borrok of the New York County Commercial Division issued a decision in BSDT 2012 LLC v. H F Z Capital Group LLC, 2022 NY Slip Op. 30151(U), holding that a guarantor was bound by a guaranty that was signed by his agent without his permission, explaining:
Ziel Feldman and the Borrower also have not created an issue of fact and otherwise cannot avoid liability by virtue of Mr. Feldman’s argument that the stamp of his signature was used without his knowledge or authority by one of his own employees. This argument is immaterial as a matter of law. The Lender is an essence a good faith purchaser for value of the loan made as there are no allegations that the Lender participated in this alleged improper use of his stamp signature. The bad acts of one’s employees does not release the principal from liability to innocent third parties. If one of Mr. Feldman’s employees acted without authority and personally benefitted from it, Mr. Feldman may very well have a claim against that employee. However, the fact remains that the loan was advanced by this Lender on facially valid documents, handled by an employee acting under the title Managing Principal of the Borrower – i.e., with apparent authority. Mr. Feldman’s company benefitted from the transaction which was ratified by the Borrower’s subsequent conduct of retaining the money. Stated differently, on the record before the court, Mr. Feldman’s employee, as his agent, acted with apparent authority and by keeping the money, the Borrower ratified the loan. If Mr. Feldman has a claim, it lies elsewhere and simply does not create an issue of fact relevant to the Lender’s rights because the Lender did not participate in this alleged unauthorized use of his stamp signature, nothing would have put the Lender on notice of the alleged problem and Mr. Feldman’s company benefitted from the loan and ratified it. Therefore, the Lender’s motion for summary judgment in lieu of complaint must be granted.
(Internal citations omitted).