219 A.D. 272 | N.Y. App. Div. | 1927
The question presented for review is the right of a bank to offset against the proceeds of a draft received by it for collection from a forwarding agent, a debt owing to the bank, not by the owner of the draft, but by the agent through whom certain goods to be paid for by said draft were forwarded1.
The claim arose out of the following transaction: The plaintiff sold certain goods to a foreign vendee and shipped the same through the Electrical Manufacturers Export Corporation. The latter delivered to the defendant a draft upon the vendee, accompanied by bills of lading and other usual documents. Said draft was delivered to the defendant bank for collection only, the bank having previously declined a request to discount the same'. The defendant thereafter collected the money and deposited the same in the account of the Electrical Manufacturers Export Corporation. The defendant then charged against the account a debt which the defendant claimed was owing to it by the said corporation. The claim of the defendant against the Electrical Manufacturers Export Corporation is based on a draft of one Willard, which the defendant had discounted, and there is a question as to whether this was the personal draft of Willard or that of the Export Corporation, of which Willard was an officer and director. It is not necessary to go into this incidental question since it is not material. For the purposes of this appeal, it may be assumed that the obligation on the Willard draft is that of the Export Corporation. The draft received by the defendant as aforesaid for collection was paid on July 6, 1921. On April 2, 1921, the plaintiff had written directly to the defendant identifying the draft by name, number and amount, and inquiring when “ we may expect to realize on this shipment.” There also was testimony to the effect that the defendant previously had been informed that the Export Corporation was acting as an export selling and forwarding agent only and never doing any business or selling on its own account, and that among its clients' was the plaintiff. If, therefore, the question of notice to the defendant were material, it would appear that the defendant had such notice; or at the least a question of fact was presented which should have prevented the direction of a verdict for the defendant. (Kinston Cotton Mills v. Kuhne, No. 1, 129 App. Div. 250; Foreign Trade Banking Corporation v. Gerseta Corporation, 237 N. Y. 265.)
The respondent relies upon the Factors’ Act (Pers. Prop. Law, § 43, as amd. by Laws of 1915, chap. 273) in so far as it provides in effect that every factor or agent intrusted with the possession of any documents of title or with the possession of merchandise for sale or as
It is unnecessary to go into the details of the claim upon which the defendant bases its right of setoff, since the defendant was not a purchaser of the draft in question and, therefore, acquired no right to offset any claim against the proceeds thereof. It may be noted, however that the defendant had discounted the Willard draft prior to the time it received the draft in question for collection and, therefore, could not possibly have made such advance upon the faith thereof. All the foregoing is predicated upon the assumption that the proceeds of the draft was the property of the plaintiff as distinguished from the Export Company. If the proceeds of the draft was in fact the property of the Export Company and not that of the plaintiff for whom the Export Company was merely acting as agent, a different situation is presented. This, however, presented a question of fact. It follows that the judgment should be reversed and a new trial ordered, with costs to the appellant to abide the event.
Dowling, P. J., Merrell, McAvoy and Proskauer, JJ., concur.
Judgment reversed and new trial ordered, with costs to the appellant to abide the event.