103 A.D. 25 | N.Y. App. Div. | 1905
The complaint avers that upon the 11th day of August, 1900, at the city of Detroit in the State of Michigan, for value received, the firm of J. F. Hasty & Sons made their draft or bill of exchange, dated on that day, whereby they directed the defendants to pay to the order of A. Ives & Sons, sixty days after the date of said draft, the sum of $1,500, and to charge the same to the account of J. F. Hasty & Sons; that thereafter the said firm of A. Ives & Sons, for value received, indorsed the draft and delivered it to the plaintiff, who then became and now is the lawful owner and holder thereof; that the said draft was duly presented to the defendants herein for acceptance, and the defendants duly accented the same by writing across the face thereof the following, “ Accepted — payable at the New York Produce Exchange Bank — $1,500.00 — Due Oct. 10 th, 1900 — Fifteen hundred dollars — No. 15,” and signed said acceptance in their firm name of Way dell & Co.; that on the 10th day of October, 1900, the day the said draft became due, it was duly presented for payment and payment was refused, whereupon the same was duly protested for non-payment, of all of which presentment, demand, refusal, non-payment and protest the defendants had due notice. The complaint demanded judgment for the face of the draft, together with interest and protest fees. The defendants, by way of an affirmative defense, averred that the said draft was delivered to Ives & Sons for the purpose of collection only, and that Ives & Sons delivered it to the plaintiff without value and solely for the purpose of collecting the same; that the plaintiff never became the owner and holder thereof, and that the plaintiff was also notified before said draft became payable that Ives & Sons never were the owners and holders thereof, and that they held the said draft solely as agents of J. F. Hasty & Sons for the purpose of collection. Upon the trial it was conceded by the defendants that they accepted payment of the draft; that it was presented for payment at the place where payment was due and payment demanded and refused, and that the draft was duly protested. The defendants then proved that the draft was given to Ives & Sons for the purpose of collection only; that they paid nothing therefor and that for the purpose of having said draft collected Ives & Sons indorsed the same and sent it to this plaintiff inclosed
We deem it to be settled law that the legal effect of the transaction between Ives & Sons and the plaintiff was to make the latter the agent of the former for the purpose of the collection of this draft. The notice which accompanied the draft established beyond question the authority and right under which the bank held the draft. That was to collect and credit the account of Ives & Sons with the proceeds of the draft when collected. The bank was authorized to present the draft to the drawees for acceptance. Having done that act and procured the acceptance it could take no further steps save to collect the draft when due when it was authorized to credit the amount to Ives & Sons. In Dickerson v. Wason (47 N. Y. 439) the following rule was established: “ Where persons in the business of banking and collecting send to their correspondents or agents, in the regular course of business of receiving and sending notes between them for collection for mutual account, business paper received from customers for collection, the agent or correspondent acquires no better title to it or to its proceeds than was owned by the one transmitting it, unless there is a Iona fide purchase of it for value or advances made upon it in good faith, without notice of any defect in the title.” This rule is precise in its application to this case. Ives & Sous were not holders of the draft for value, but were mere agents for its collection. It was received by the bank, accompanied by a notice of the character of the title of Ives & Sons, and the bank in express terms was directed to collect and credit it. The bank’s title was not higher than the title of Ives & Sons and of such title the bank had notice as matter of fact, in consequence of which its rights and obligations were measured by the title which it acquired. The rule announced in the Dicker son case was reiterated and applied in Bank of Clarke Co. v. Gilman (81 Hun, 486) by the General Term of the Supreme Court in the first department, and the decision therein was afiirmed by the Court of Appeals (152 N. Y. 634) on the opinion below. That was an action brought to recover the proceeds of a check drawn upon the National Bank of the Republic of New York city by
The judgment should, therefore^ be affirmed, with costs.
Van Brunt, P. J., Ingraham, McLaughlin and Laughlin, JJ., concurred.
Judgment affirmed, with costs.