19 Barb. 391 | N.Y. Sup. Ct. | 1853
Lead Opinion
The Bank of Wilmington and Brandywine received the draft in question from Betts, Harlan & Hollingsworth, the payees and holders thereof, and gave them credit for the amount; that bank thereby became its owner. The Troy City Bank received the draft for collection, and failed either to collect the draft, or to protest it, so as to charge the parties who would have been liable to the owner for its payment. The Bank of Wilmington and Brandywine is therefore entitled to indemnity for its loss, and the Troy City Bank is liable for its failure to discharge the duty it took upon itself when it received the draft for collection. The question then is how the plaintiff and the defendants, the immediate parties to the transaction, are affected by the right of the Bank of Wilmington and Brandy-wine to indemnity, and this liability of the Troy City Bank. That the plaintiff is liable to the Bank of Wilmington and Brandywine, is settled by the authority of Allen v. The Merchants’ Bank of New York, (22 Wend. 215.) The resolution of the court for the correction of errors in that case is, that when a bank, upon a good consideration, receives a note, or a bill, for. collection at a distant place, the party receiving the same for collection, is liable for the neglect, omission, or other misconduct óf the bank or agent to whom the note or bill is sent, either in the negotiation, collection or paying over money, by which .the money is lost or other injury sustained by the owner of the note or bill, unless there be some agreement to the contrary, expressed or - implied. Upon this principle, the Merchants’ Bank of Hew York, which had received from the Messrs. Allen a draft upon a mercantile firm in Philadelphia for collection, and had transmitted it for the same purpose to the Philadelphia Bank, was held liable to the owners of the draft for the neglect of the notary of the latter bank in giving notice of the non-acceptance of the draft, so as to charge the indorsers. (See also Downer v. The Madison County Bank, 6 Hill, 648.)
The question still remains, whether being itself liable to the Bank of Wilmington and Brandywine, the plaintiff may maintain its action against the Union Bank or the Troy City Bank, without waiting for a recovery against it upon its own liability. To hold that the action cannot be maintained, would be contrary to the policy of the law, which always seeks to avoid a multiplication of suits by sustaining the action directly against the party ultimately liable. “ Why,” said Nelson, Oh. J., when the same argument was urged by the defendant, in the Bank of Orleans v. Smith—“why bring'the action against the Bank of Troy? They were but the agents of the defendants, and a recovery against them would only have the effect of multiplying actions, as they would have an immediate remedy over against the defendant.” If, according to the principle laid down by the supreme court, in Allen v. The Merchants' Bank, (15 Wend. 482,) the only duty assumed by the plaintiff upon receiving the draft, was, that the draft should be forwarded in due season to some competent agent at the place of payment; then, indeed, having discharged that duty, there would be no ground for maintaining the action—no injury could have been sustained by the plaintiff. But since by the doctrine established by the court of errors, in Allen v. The Merchants' Bank, the plaintiff became answerable for the diligence of the agents who might be employed in the collection of the draft, it had such a special interest in the draft as would enable it to maintain an action for the injury it ha,d sustained. Though the Bank of Wilmington and Brandywine was the general owner, the plaintiff, to which the draft had been indorsed and delivered for a special purpose, became a special owner. It
In this case the Bank of Wilmington and Brandywine had, by indorsement in due form, transferred the draft to the plaintiff. Having the possession of the draft thus indorsed, the plaintiff was clothed with the legal evidence of ownership. As such owner, the plaintiff transmitted the draft to the defendant. The parties dealt with each other as principals. By receiving the note from the plaintiff for collection, the defendants engaged with the plaintiff, as the plaintiff had engaged with the Bank of Wilmington and Brandywine, that-the proceeds of the draft, or the draft duly protested, should be returned to the plaintiff. Having failed in discharging this duty, it is no answer to the action to say, that the plaintiff is under a similar obligation to another party. Nor is it any answer to say, that the real principal has a right also, as an implied party, to avail himself of the obligation which the defendants had assumed with the plaintiff. It is by reason of the plaintiff’s responsibility to its principal that it has an interest in maintaining this action for its own indemnity. “ It may be laid down as a general rule,” says Story, “that wherever "an agent, although known to be such, has a special property in the subject matter of the contract, and not
It cannot be doubted, I think, that the plaintiff had such a special property in the draft, as entitled it to maintain an action against the defendants for the injury it had sustained by the default of the defendants’ agent in collecting or protesting the draft. The plaintiff had the legal right to recover the damages which the defendants had incurred by reason of such default, so that it might be indemnified against its own liability upon its own undertaking with its principal. It was upon this principle that it was held by the court of errors, in Miller v. Adsit, (16 Wend. 335,) that a receiptor of property taken in execution, being -bound to return the property or pay the execution, had such a legal interest in the property as entitled him to maintain ah action against a third person who had taken the property, although it had been left in the possession of the de fendants in the execution. I think, therefore, that the action was properly brought by this plaintiff, and against these defendants.
It has thus far been assumed that the facts in this case, in respect to which there was no dispute, showed such loches as would render the Troy City Bank liable for its failure to collect, or duly to protest, the draft. But as the "defendants’ counsel have made a point upon that question, it is proper that it should receive a moment’s notice. The draft was received at Troy on the morning of the 19th of November. At the opening of the bank on that day it was presented by the teller to W orren for payment. Though he had not funds upon deposit to pay the draft, his check for the amount of the draft, with some other items, was received, and the draft delivered up as paid. Subsequently, on that day, and the day following, cash deposits were made to an amount greatly exceeding the check which was used in the payment of the draft. I suppose that these deposits were applicable to the payment of. the check used for the purpose of taking up the draft in preference to other similar advances made subsequently. (Allen v. Culver, 3 Denio, 284. Webb v. Dickinson, 11 Wend. 62. Seymour v. Van Slyck, 8
Nor have I been able to perceive any sufficient grounds for suppressing the depositions of the two cashiers. A copy of the draft was annexed to the interrogatories, and the witnesses were asked, among other things, if they had ever seexi the original of such copy; and, if so, under what circumstances and when. By other interrogatories, the cashier of the Bank of Wilmington and Brandywine was required to state the facts in relation to the transfer of the draft by Betts, Harlan & Hollingsworth to the Bank of Wilmington and Brandywine, and the transmission of the draft for collection. The cashier of the plaintiff’s bank was also required to state the facts in relation to the transmission of the draft to New York for collection. At the taking of the deposition of each witness, the original draft was present and identified. Each verified the copy annexed to the interrogatories as being a true copy. The defendants’ counsel insisted, on the settlement of the interrogatories, that these interrogatories ought not to be allowed, because they related to a copy of the draft, without producing the original or proving it lost, thereby seeking to give paroi evidence of a written instrument. Upon the trial the further objection was taken that the plaintiff had no right to give evidence of the original draft without allowing the defendants to see the same before the witnesses were examined. In respect to the latter objection it is enough to say that it is hypothetical. It does not appear whether the defendants’ counsel in- fact saw the draft or' not. If he did not, there is no reason to believe he might not have seen it,
By one of the interrogatories administered to the cashier of the Bank of Wilmington and Brandywine, he was required to state the usual mode of transferring notes and drafts from one bank to another. This was objected to,- on the ground that it involved the decision of a question of law. In this, too, I think the defendant’s counsel is mistaken. The witness is interrogated in respect to a mere matter of fact; that is, how a certain kind of business is done. What might be the legal effect of doing the business in the mode described by the witness, is a question which would still remain to be determined.
In answer to the concluding general interrogatory, each witness has in substance repeated the facts he had previously stated in answer to the specific interrogatories, and perhaps has added some other statements. Ho motion was made to suppress the answer to this interrogatory, or any part of it. But ifr such a motion had been made, I do not see why it should be granted. So far as the same facts were re-stated by the witnesses, the defendants certainly could not be prejudiced, and if any new matter was stated bearing upon the matters in issue, it was no more than the duty of the witness required him to state. If the defendants had desired to cross-examine the witnesses in respect to any new matter there stated, they should have applied to have the commission sent back for that purpose. It was too late to raise such an objection at the trial.
It had appeared on the cross-examination of the plaintiff’s attorney, who was called as a witness upon the trial, that before
The only other point made by the defendants’ counsel is, that the erasure of the indorsements of the cashiers of the Bank of Wilmington and Brandywine, and the plaintiff’s and defendant’s bank, canceled the interest of the plaintiff in the draft, if it ever had any, and that for this reason the action cannot be maintained. These erasures were made, as the defendant’s counsel concedes, when the draft was returned under protest, and probably before the circumstances which establish the liability of the defendants were known. If the defendants were liable to the plaintiff at all, they were liable in consequence of the' failure of the Troy City Bank to discharge its duty in the collection of the draft. That liability was fixed before the draft was returned, and of course, before the indorsements had been erased. The fact that the indorsements were erased, or even
Parker J. concurred.
Dissenting Opinion
(dissenting.) The action is againstthe defendants, the corresponding bank of the plaintiffs. It is not pretended that any thing has been collected on the draft, by the Union Bank. If liable, it is for the negligence or misconduct of the Troy City Bank, to whom they transmitted the paper for collection. In Allen v. The Merchants’ Bank of New York, (15 Wend. R. 482,) this court decided that when a bill of exchange, payable at a distant place, is deposited-with a bank for collection, without any agreement for compensation, the only obligation incurred is to forward the bill in due season to a bank or other suitable agent, at the place of payment, with directions to take the necessary measures to obtain payment; and accordingly when a bill was thus forwarded, and the bank receiving it placed it in the hands of a notary to make presentment for acceptance, which was made and refused, and the notary omitted to give notice to an indorser, whereby the debt was lost, it was held that an action would not lie against the bank where the bill was originally deposited, but the ■ holder must seek his remedy against the foreign bank or notary. This appears to have been the general commercial rule. (Bank of Washington v. Triplett, 1 Peters’ R. 25. East Haddam Bank v. Scoville, 12 Conn. R. 304. Fabens v. Mercantile Bank, 23 Pick. R. 330.) But the court for the correction of errors reversed the decision of this court, in Allen v. Merchants’ Bank, (22 Wend. R. 215,) holding that a bank receiving paper for collection at a distant place is liable, in the absence of any special agreement to the contrary, for any neglect of duty occurring in its collection, though arising from a default of its correspondents, to whom the paper was transmitted,
But can the plaintiff (the Commercial Bank of Pennsylvania) maintain the action ? The proof showed, and indeed it was conceded throughout the case, that the Bank of Wilming,ton and Brandywine, was the owner of the draft. It ivas transmitted by that bank to the plaintiffs, as its agent, for collection. They received it as agents, and for the purpose of collection, and none other. They lose nothing by a neglect or omission to properly charge the drawer or indorsers. They are not the persons damnified, or who suffer by the negligence or misconduct of the' defendants, or their sub-agents. The action is not brought to recover upon the draft itself. Though assumpsit, in form, it is founded in negligence or omission of duty. Is such a right of action assignable ? I .think not. But if so, there is no pretense that the Bank of Wilmington and Brandywine have assigned the cause of action to the plaintiff. The learned judge who tried the cause held “ that though the plaintiffs were the mere agents of the owners of the draft to collect the same on their account, yet under the circumstances which appeared in evidence, they had sufficient interest in the draft to enable them to maintain the action.” In this I am at a loss to discover the meaning of the judge. If not the owners of the draft, what interest had they in it? What property in the chose in action lost by the negligence of the Troy City Bank ? It cannot be pretended that the indorsement of the draft, at the time it was transferred to the plaintiffs for collection, vested the legal title in them, so as to clothe them with the rights of owners. The indorsement was for a specific purpose, viz: to facilitate the collection for the owners, and the indorsement was stricken out before this suit was commenced. It is not perceived, therefore, what personal interest the plaintiffs had in the draft in questionat the commencement of this action; and it seems to me clear
The Bank of Wilmington and Brandywine being the owner of the draft in question, might, have prosecuted directly against the Troy City Bank, for the distant agent is to be considered the agent of the holder as well as of the bank transmitting the paper. (Bank of Orleans v. Smith, 3 Hill, 560.) Thus a multiplication of actions would be avoided. This course is not taken, nor any course on the part of the persons having the beneficial interest and property even as against the immediate agent. One agent brings an action against another intermediate agent. How does this subserve the policy of the law which seeks to avoid a multiplication of suits by sustaining the action against the party ultimately liable ? But if the action had been against the Troy City Bank, or the notary, who in this case are to be regarded as ultimately liable, the doctrine of avoiding multiplicity of actions could have no application.
It seems to be conceded that the plaintiffs must have a special property, or a direct beneficial interest in the draft, to enable them to maintain the action in their own names. That they have none either in law or by the usage of trade, is the difficulty that I am unable to overcome. The fact of intrusting to an impolitic agent that which they should have performed themselves, or having themselves discharged their agency with such loches as to render them answerable to their principal in law, certainly, gives them no property in the subject matter of the. agency, or any beneficial interest in the thing itself. The plaintiffs occupied the position of ordinary agents. They undertook to perform a service for the owner of the draft, viz; to collect it. In undertaking this duty they are understood to have contracted for reasonable skill and ordinary diligence, and consequently are liable for injuries to their employer, occasioned by ordinary negligence or want of reasonable skill. But, unlike some other classes of agents, they had no property or lien upon the draft or the debt of which it was the evidence, or th.e proceeds of the draft. An auctioneer, who for • some purposes may be deemed an agent for both vendor and vendee, has a lien on the goods sold by him, and the proceeds thereof, for his commissions, and has an unconditional authority to sue the purchaser in his own name as being not merely agent but a contracting party. So also a factor, who has the possession, management, control and disposal of the goods to be bought and sold, has a special property in them, and a lien on them not only for commissions but for advances, and not only on the property itself but its proceeds. He may buy and sell goods in his own name for his principal, and for many if not for most purposes (except between himself and his principal) he is treated as the owner of the goods. He may sue in his own name for goods sold by him for his principal, and is also liable to be sued for goods.bought by him for his principal. These classes of agents have peculiar duties and peculiar functions resulting from- the
On the argument we were not referred to any authority claiming to bear upon the point of the right of the plaintiffs to maintain the action, except the case of Miller v. Adsit, (16 Wend. R. 335.) That case holds that replevin may be maintained by a receiptor of goods, where he is bound to deliver them by a specific day or pay the amount of the execution under which the levy was made, although the property be left by him in the
I am of the opinion that the action cannot be maintained by the plaintiffs. We may make this case a precedent, but not otherwise. They were not the owners or holders of the draft, nor had they any personal interest in or lien upon it. They were but the agents of the Bank of Wilmington and Brandy-wine to collect it. As such agents, it is true, they were responsible for their own negligence, and that of those with whom
Parker, Harris and Wright, Justices.]
There should be a new trial with costs to abide the event.
Motion for new trial denied,
Affirmed by Court of Appeals. See 1 Ker. 203.