189 F. 442 | S.D.N.Y. | 1911
Now a check is undoubtedly a draft, and, in the case of a time draft, I suppose no one would say that there was any representation by the drawer that the drawee was in funds in prsesenti. Every one knows that business usage does not contemplate that the drawee shall be in
In short, the period of the time of presentation of a check is by no means one day, but it is the earliest time within which the check maybe presented, and that, of course, varies with the facts. In a case like that at bar, where the drawer, the payee, and the drawee all live in the same city, and where the payee may cash the check in a few minutes, the time is reduced practically to nothing, and it seems to me that the drawer must be held to represent that the drawee is already in funds, unless he indicates in some way that the check is not ■to be presented at once. It is of no consequence that the payee may wait and so take a chance of the drawer’s and the drawee’s continued solvency. If the check means that the dra.wee is in funds now, and if the payee accepts it as cash, he may rescind if he was misled, however innocently.
'¡'lie authorities arc not helpful upon this precise proposition. I have found no case in which the point was -taken that there were no funds in the drawee’s hands at the time the check was given, except cases in which there was in addition clear proof of fraud, such as Earl of Bristol v. Wilsmore, 1 B. & C. 514; Keable v. Paine, 8 A. & E. 555. In the other cases the rule seems to be confused with the rule which exists in many jurisdictions that delivery by a seller upon a cash sale is not of itself a waiver of the condition of payment. I believe that this rule is quite wrong in principle (Williston oil Sales, § 346) ; nor is there any authority binding upon me. At least such a delivery must be held to he presumptive evidence of waiver and this appears to be the rule in New York. Osborn v. Gantz, 60 N. Y. 540. That question, however, in the light of the present facts is immaterial.
Coming back now to the failure to prove that the proceeds have been dissipated, it is apparent that this makes no difference in the result, because, if they are not dissipated, the claimant is confined to the proceeds, while, if they are, yet the trustee may still retain the stock upon paying to her the equivalent. How, then, can the trustee complain of a failure to prove that he has not got.the proceeds? If he has them, he must pay them over but he may keep the stock. If he has not got them, he may pay over their equivaler-1- and keep the stock. The only change in his position is that, if she had proved that he did have the proceeds, he would have had to pay them, whether or not the value of the'stock had fallen. That, how ver, is her right,, not his. Her failure to prove that only eliminates her right to insist on the proceeds. If he is given the option to pay either amount of the proceeds or stock, which option he has even if the proceeds themselves be gone, he is in no worse position than if he had the proceeds. Therefore, if an order be entered giving him that option, the issue of whether or not the proceeds are dissipated becomes immaterial.
What I said in the earlier opinion was correct enough, and would result strictly in compelling the claimant to show that she could not get the actual proceeds. Since, however, the amount of the proceeds is the precise equivalent of the actual proceeds, it seems to me of no consequence to require proof of a matter, which, while formally necessary, makes not the slightest substantial difference in result. As it does not concern any one whether the claimant traces and gets the actual proceeds, or gets the equivalent sum of money by way of tender from the trustee, I shall not require any proof upon the subject. I had not carried out the detail of this reasoning before, as it was not necessary, while there was no misrepresentation, and while so far as appeared the claimant upon delivering the stock had accepted the broker’s credit.
Let an order pass directing the trustee at his option to turn over either the certificate or the amount of the proceeds at which the stock sold.