126 Misc. 13 | N.Y. Sup. Ct. | 1925
This action was brought on for trial on an agreed state of facts and upon the usual Trial Term, Part III, stipulation. The essential facts are as follows:
On March 9, 1916, the plaintiff entered into an agreement with the Citizens Central" National Bank, defendant’s predecessor, evidenced by the following letter prepared by the manager of the bank’s foreign department, and signed by the plaintiff:
“ Citizens Central National Bank,
“ New York City:
“ Gentlemen.— We hereby purchase from you at 72f 50,000 (Fifty Thousand) Marks exchange on Berlin and request you to hold this amount in your account with the Deutsche Bank, Berlin, Germany for our use.
“ In consideration of your doing so, we hereb/ agree to pay you for the exchange as we use it at the aforesaid price, plus interest at the rate of 3% per annum for the time the exchange is held. You shall, however, have the right to call upon us t . pay for any unused portion of this amount at the aforesaid rate and interest at any time that you consider it advisable to do so.
“(signed) KUPFER BROS. CO.”
In a letter dated March 10, 1916, the bank confirmed the purchase of 50,000 marks at seventy-two and five-eighths, “ value $9,078.12 which we will hold for your account subject to your further instructions, in accordance with your agreement dated March 9th, 1916.”
On July 13, 1916, the plaintiff paid the defendant’s predecessor one-half of the purchase price, having previously paid accrued interest, and requested the latter to instruct the Deutsche Bank to pay 25,000 marks to Wilhelm Stern & Co., one of plaintiff’s correspondents in Germany. These instructions were carried out. On March 29, 1917 — the war with Germany being imminent — defendant’s predecessor requested the plaintiff to pay for the unused 25,000 marks and accordingly the plaintiff handed over the sum of $4,583.70 in payment of said marks at the agreed price, with accrued interest, and requested the bank to send instructions to cause the remaining 25,000 marks to be paid to Wilhelm Stern & Co. Advices to this effect were sent, but apparently never received by the Deutsche Bank, owing to the outbreak of the war, and the marks were, therefore, not paid out. Upon learning of
The defendant’s contention is that when its predecessor purchased 50,000 marks on March 10, 1916, and placed the same to its credit in the Deutsche Bank, its obligation to the plaintiff was discharged, save for its duty to forward instructions as these were given by the plaintiff, for payment out of this account. This duty it also claims to have complied with, the non-receipt of the instruction by the Deutsche Bank having been due to circumstances beyond its control.
The difficulty with the defendant’s position is that when its predecessor purchased the 50,000 marks which it placed to its own account in the Deutsche Bank, it did so for its own convenience and not for the strict purpose of making this particular sum available for plaintiff’s use. This is proved by the fact that at various times between March 10,1916, and March 29,1917, the defendant’s mark account with the German bank fluctuated to such an extent that at times it was considerably below the requirements of the plaintiff under the contract. In fact, the balance was temporarily wiped out in June and July, 1916. As defendant admits in its brief, “ the defendant’s credit facilities with the Deutsche Bank were such that the latter made the payment of 25,000 marks in July, 1916, pursuant to instructions, even without the defendant’s having a credit balance to that amount.” The transaction was, therefore, tantamount to a sale of credit, an agreement by the defendant to make available for plaintiff’s use, upon demand, the sum of 50,000 marks. This duty the defendant did not discharge by the mere forwarding of instructions to the Deutsche Bank to pay to the plaintiff’s correspondent the sums demanded. If the German institution had refused to pay such sums according to instructions there is little doubt but that the plaintiff would have had a cause of action for the return of the money paid by it, on the ground of failure of consideration. As was said by Judge Cardozo in Sokoloff v. National City Bank (239 N. Y. 158, 166): “ The defendant is not a bailee for the plaintiff, nor were any of its assets ear-marked to the plaintiff’s use.” Consequently the plaintiff in that event would have had no independent cause of action against the German bank and its only recourse would have been against the defendant. There is no reason why the same remedy should not obtain under the facts as they actually appear here.
" The use of the word ‘ rescission ’ in this connection is unfortunate and confusing. * * * What the term really means, when used with reference to the right to restitution, is that, upon the repudiation or substantial breach of a contract, the injured party may elect to disregard his contract * * * and demand restitution in value for what he has done.”
He then indicates that a cause of action for money had and received arises immediately upon the breach. The language of the learned justice (at p. 805) is clearly applicable here: “ In the present case it is quite clear that plaintiff has nothing to réscind. On the contract date defendant had not performed its agreement. Nothing remained of the contract. Plaintiff had received nothing and defendant had plaintiff’s money. * * * Having received nothing, plaintiff has nothing to tender back; having done nothing to induce or aid the defendant to change its position, he is not subject to any claim of estoppel or waiver.”
One more fact remains to be mentioned in regard to any possible ■ bearing it may have upon the decision of this cause. The defendant filed a claim with the Mixed Claims Commission as a creditor of the Deutsche Bank and included within it the 25,000 marks, the failure to pay which sum gave rise to this action. Evidence, however, is offered over the objection of the plaintiff, that defendant’s own records, of which the former was unaware, show that the amount so claimed was intended for the account of the plaintiff, and upon its allowance by the Mixed Claims Commission it would be turned over to the plaintiff. This evidence, even if admitted,