129 N.Y.S. 977 | N.Y. App. Div. | 1911
Lead Opinion
On June 20, 1907, the Congregational Church Building Society drew its check on the Mercantile Trust Company of New York for $2,500, payable to the Fourth Congregational Church of San Francisca. The latter opened an account with the California Safe Deposit and Trust Company on September 80, 1907, and on October 24, 1907, the treasurer deposited said check, together with $17.95 in currency, with the said trust company and was credited by the latter with the sum of $2,517.95. The check with other items aggregating $6,473.47 was sent “ for collection and credit” to the defendant and was received by it on the morning of October 30, 1907. The defendant forthwith credited said amount to the California Safe Deposit and Trust Company and on that day presented the check, with other items, to the Mercantile Trust Company and received in payment the latter’s check, drawn on the National
Said check, when deposited, was indorsed in blank and the person who deposited it in behalf of ■ the payee testified that no instruction Vas given the California Safe Deposit and Trust Company at the time. On the pass book delivered to the treasurer of the said church society when the account was opened was the following: “ This barfk iñ receiving out .of town checks and other collections, acts only as your agent and does not assume any responsibility beyond due diligence on its part, the same as on its own paper,” and on the deposit slip, upon which was entered the said deposit of $2,-517.95, was the following: “ In receiving checks on deposit, payable elsewhere than in San Francisco, this bank assumes no responsibility for the failure of any of its direct or indirect collecting agents, and shall only be. held liable when proceeds in actual funds or solvent credit shall have come into its possession. Under ■ these conditions items previously credited may be charged back to the depositor’s-account. In making this deposit the depositor hereby assents to. the foregoing conditions.”
There had been mutual and extensive dealings between the defendant and the California Safe Deposit and Trust Company for some time prior to the transaction in suit. The latter had a checking account with the former and was accustomed to send to it bills for collection and credit in two ways: a, by a so-called cash letter; b, by a so-called collection letter. The two differed onlyin.this, that the latter contained the following, not found in the former, viz.: “Credit only when paid and report by number- or date. Deliver documents only on payment. Do not hold our collections, but return promptly if not honored. ” The check in questipn, with others, was transmitted with a. cash letter. Another cash letter, was also
While the deposit of a bill or check in the ordinary course of business, the depositor receiving a credit against which he can draw, has the éffect of transferring the title (Briggs v. Central Nat. Bank of N. Y., 89 N. Y. 182; Metropolitan Nat. Bank v. Lloyd, 90 id. 530; Cragie v. Hadley, 99 id. 131), I do not think that was the effect of the original deposit involved in this cases The words on the deposit slip must be read into the contract. If title had at once passed to the California Safe Deposit and Trust Company, it would have had • recourse to the depositor only in case the' paper was dishonored, but by its contract it assumed no responsibility until it had received actual funds or solvent credit. Up to that time it was, then, merely the agent of the depositor. However, the check was actually credited by the defendant and paid by the drawee during banking hours on the thirtieth of October. The California Safe Deposit and Trust Company, then, had received and accepted solvent credit for the check before it failed, and its relation to its depositor had changed from that of agent and principal to that of debtor
Moreover, the defendant was a bona fide holder for value. While the learned trial court submitted to the jury the question whether the defendant had notice that the check belonged to the customer of the California Safe Deposit and Trust Company, there is no evidence in the case that it had such notice, and the undisputed evidence shows that it did not. Dor anything that appeared on the paper, and that was the only thing to give the defendant notice, the California Safe - Deposit and Trust Company was the owner of it. It was not to be presumed that the check was originally deposited only for Collection, as the cases hereinbefore cited show.
Of course-it is impossible to say that the defendant did anything upon the faith of the said trust company’s ownership which it would not otherwise have done. However, because of all the mutual dealings, of which that was a part, it suffered a general balance in its favor to remain and it paid and certified checks. Prior to the passage of the Negotiable Instruments taw (G-en. Laws, chap. 50; Laws of 1897, chap. 612; -Consol. Laws, chap. 38; Laws of 1909, chap: 43), and from the time of the decision of Coddington v. Bay (20 Johns. 637), it was the law of this State that in order to constitute one a holder for value as against. a true owner it was necessary that he part with some present consideration. A, different rule prevailed in the Federal courts, and in many of the States. (Vide Bank of the Metropolis v. New England Bank, 1 How. [U. S.] 234; 6 id. 212; Wood v. Boylston Nat. Bank, 129 Mass. 358.) The Negotiable Instruments Law provides: “% 51. What constitutes consideration. Value is any consideration sufficient to support a simple contract. An antecedent or pre-existing debt constitutes value, and-is deemed such whether the instrument is payable on demand or at a future time. § 52. What constitutes holder for value. Where value has at any time been given for the instrument, the holder is deemed a holder for value in respect to all parties who became such prior to that time.” While no case in this State on the point has been called , to our attention, it seems plain that those sections
The judgment and'order should be reversed and a new trial granted, with costs to the appellant to abide the event.
Concurrence Opinion
(concurring):
I concur with Mr.. Justice Miller in the reversal of this judgment. The complaint states two causes of action. His opinion relates to the first.
This cause of action seems to be based upon the claim that the church trustees, the plaintiff’s assignor, was the owner of a check for $2,500, drawn by the Congregational Church Building Society upon the Mercantile Trust Company of the City of New York to the order of the church trustees, and that they had deposited this check with the California Safe Deposit and Trust Company of San Francisco, Cal., for collection; that the California Trust Company had forwarded such check to the defendant for collection; that on October 30, 1901, the defendant collected on said check from the Mercantile Trust Company, the drawee thereof, the sum of $2,500, on which same day the California Trust Company was put in charge of a receiver on the ground of insolvency; that the defendant had not remitted the proceeds of the check to the' California Trust Company or its representatives or to the trustees of the church, and that the trustees of the church had assigned then- claim against the defendant to the plaintiff. -
The crucial question presented is whether the defendant became in consequence of this transaction the debtor of the trust company or the debtor of the trustees of the church. Assuming that the check was received by the trust company from the trustees of the church under an arrangement by which the title to the check did not vest in the trust company upon deposit, it was authorized to collect the check and when actually collected by it or its agent the proceeds of the check became the property of the trust company and the trust com-'
The second cause of action was based upon a check drawn by a bank in Texas on a bank in Few York, to the order of one Neal for $500, which was subsequently indorsed and delivered to one Simon, This check was, on October 29, 1907, deposited by Simon with the California Trust Company for collection, the trust company giving a receipt that it had “received for collection from I. Simon check on National Park Bank of
The crucial difference between this claim and the claim for the $2,500 check embraced in the first cause of action arises from the fact that' it was received by the trust company specifically for collection; was forwarded to' the defendant specifically for collection; and was not collected until after the trust company had faffed. Neither the trust company nor the defendant ever acquired title to the check and when the money was received by the defendant it was received on account of the owner of the check, namely, Simon, and the defendant with notice of that fact before it had changed its condition in any way was clearly responsible to Simon as the owner of the check for the amount that it had collected. Simon remained the owner of the check, the defendant had received the proceeds of the check, the California Trust Company having failed before it had received such proceeds, the defendant was responsible, not to it, but to the real owner of the check, and the defendant is, therefore, responsible to the plaintiff in this action for its proceeds which it had collected.
It appears, therefore, from the undisputed facts- that the plaintiff was not entitled to recover for the $2,500 check but was entitled to recover for the $500 check, and unless the plaintiff wishes to reduce the judgment to the sum of $500 and interest, there must be a new trial.
Clarke, Soott, Miller and Dowling, JJ., concurred.
Judgment and order reversed and a new trial ordered, with costs to appellant to abide event.
