186 A.D. 105 | N.Y. App. Div. | 1919
Lead Opinion
This is an action to impress a trust upon and for judgment for the proceeds on deposit with the defendant bank to the credit of A. Bolognesi & Co., the name under which Alessandro Bolognesi and Aldo Bolognesi, his son, were doing business as private bankers and brokers and carrying on an extensive foreign exchange business,— its depositor, of a certified check for $3,450, dated and certified February 10, 1914, drawn by plaintiff on the State Bank of New York to his own order and indorsed to the order of said depositor and deposited to its credit with defendant bank and collected by it the next day.
“ Mr. Angelo Legnití
“ Bought of A. Bolognesi & Co.,
“ 52 Wall Street.
“ Cable Transfer to Italy
to pay by Cable to Banca Commerciale Italiana, Napoli “ Advice to be forwarded by Cable from New York.
Lire 18,000....................... at 5
“ Cabling..........................
Paid (ck 3450.
“‘ (cash 13.61 : Bolognesi & Co.
“ Maselli : Feb. 10, 1914.
19%
$3462.37 $ 1.24
(ck)
$3463.61
Payments required in Cash or Certified Cheques, otherwise order if accepted, will be executed after collection of cheque.
“It is fully understood and agreed that no liability shall attach to us nor to our correspondent for any loss or damage in consequence of any delay or mistake in transmitting this message or for any other cause beyond our control.”
Plaintiff thereupon delivered the check to the messenger and $13.61,- the balance, in cash. Bolognesi at that time had either money or credit with the bank in Italy to which
I am of opinion that Bolognesi & Co. received the check in trust to procure a credit for plaintiff at the bank in Italy of 18,000 lire and that they could not acquire title to the proceeds of the check until that was done. The contract was not made on the theory that Bolognesi & Co. then had credit at said bank which was to be transferred to plaintiff. That did not enter into the negotiations and so far as appears the plaintiff did not know it. What the plaintiff desired and what Bolognesi & Co. undertook to do was to have 18,000 lire placed to his credit with said bank and that they did not do and made no attempt to do. The case is not analogous to the purchase of property for which payment is made in advance of delivery. If the transaction had been the purchase of property the plaintiff could have protected himself by requiring delivery or the delivery of evidence of title at the same time. The case would be one of agency if it involved the purchase of a credit by Bolognesi & Co. from another, and if not and it only involved a transfer of his own credit by cable, it would be analogous thereto, and in either case the proceeds of the check could be used only for the purpose for which it was delivered, and until or when the condition on which delivery was made was complied with the title thereto would not pass from plaintiff. Of course, it was not intended that the plaintiff’s money .should be transmitted or forwarded and deposited to his credit in Naples, for his was money curren b here and he delivered the check for our money to Bolognesi & Co. for the purchase of an equivalent amount of money current in Italy precisely as in People ex rel. Zotti v. Flynn (135 App. Div. 276), wherein we sustained a charge of grand larceny against a banker and broker for appropriating American money delivered to him for the purpose of forwarding the equivalent in Austrian money. The failure of the defendant is that case to purchase and forward the foreign money does not differ on principle from Bolognesi & Co.’s failure to purchase or arrange for credit in foreign money. In the case at bar by the memorandum prepared by Bolognesi & Co.
It follows that the findings of fact and conclusions of law inconsistent with these findings should be reversed and appropriate findings and conclusions made in accordance therewith and the judgment reversed, with costs to appellant and judgment entered in favor of plaintiff for the relief demanded, with costs.
Clarke, P. J., Smith and Merrell, JJ., concurred; Shearn, J., dissented.
Dissenting Opinion
The opinion of Mr. Justice Laughlin, as it seems to me, fails to take cognizance of the basic fact that foreign exchange
The soundness of this position has complete sanction in the very recent decision of this court in Strohmeyer & Arpe Co. v. Guaranty Trust Co. (172 App. Div. 16), where Mr. Justice Scott, writing for a unanimous court, said: “ The learned court from whose judgment this appeal is taken decided in favor of the plaintiff upon the theory that what defendant contracted to transmit was the identical money paid to it by the plaintiff, likening the case to one in which a common carrier had received ten trunks for transmission and delivered only nine of them. He was, therefore, of the opinion that the money paid to defendant remained the property of plaintiff until it or its equivalent had actually been paid over in Genoa, and that all plaintiff was entitled
It is intimated that this was dictum and by way of argument. But the decision turned upon whether the transaction was complete when the cable transfer was sold.
Reference is made to People ex rel. Zotti v. Flynn (135 App. Div. 276), wherein the court sustained a charge of grand larceny against a banker and broker who appropriated American money delivered to him for the purpose of forwarding its equivalent in Austrian money to a designated person in Vienna. There is an important distinction between such a transaction and a contract to sell a credit, available in a foreign country. In this case of the purchase of credit, to be made available by a cable transfer, there was, as Mr. Justice Laughlin concedes, no intention “ that the plaintiff’s money should be transmitted or forwarded and deposited to his credit in Naples.” In the Zotti case the intention was that
It does not follow that, because the receipt of money by ticket agents and brokers for the agreed specific purpose of forwarding has been held to constitute an agency or trust, the widely different and well-established business of selling foreign exchange or credit is founded upon the relation of agency or trust. The latter business is frequently carried on by issuing drafts and orders or letters of credit. The distinction between issuing a draft or traveler’s check and receiving money for transmission is recognized in Musco v. United Surety Co. (132 App. Div. 300, 305); also in the statute (Laws of 1907, chap. 185, as amd. by Laws of 1908, chap. 479; revised by General Business Law [Consol. Laws, chap. 20; Laws of 1909, chap. 25], § 25 et seq. added by Laws of 1910, chap. 348, as amd. by Laws of 1911, chap. 393),
The transaction at bar is very analogous to the purchase of a draft on the bankers’ foreign correspondent. In the latter case the draft would evidence the bankers’ obligation to establish the credit in Italy, whereas in the case of the cable transfer the memorandum delivered by the bankers evidences the obligation. In the case of a draft, where time is not so important, the purchaser would ordinarily mail the draft. In the case of a cable transfer, where time is all important, the seller, who necessarily is supposed to have an existing credit in the foreign country wholly independent of any money being forwarded, issues his orders to transfer the credit, employing a cablegram instead of a draft. Can there be any doubt but that when a traveler, wishing to establish credit in foreign countries, pays his money over to the banker, who agrees to honor his drafts abroad and evidences the agreement by a letter of credit, the transaction is then complete and title to the traveler’s money vested in the banker? Could the banker ■ be held as a defaulting trustee if he went into bankruptcy before the letter of credit was actually drawn upon? Clearly not. Mr. Justice Latjghlin concedes that in the purchase of a draft the seller gets immediate title to the money paid for it, but says in such case, “ the purchaser receives the draft, which is what he desires, and he uses that himself.” I doubt that what he desires is the draft which he receives. He desires the transfer of credit which the draft, if accepted, assures. If the draft should not be accepted, he would be in precisely the situation of this plaintiff, not able to hold as a defaulting trustee the issues of the draft, but with a good cause of action against him for breach of contract. ;
The judgment should be affirmed, with costs.
Judgment reversed, with costs, and judgment directed for plaintiff for the relief demanded, with costs. Order to be settled on notice.
Now Banking Law (Consol. Laws, chap. 2; Laws of 1914, chap. 369), art. 4.— [Rep.
Concurrence Opinion
I concur in the opinion of Mr. Justice Laughlin, but it seems to me that there are additional grounds for reversal.
■ While the trustee in bankruptcy is a party to the action, there is no controversy between the plaintiff and such trustee. The trustee has no interest in the funds in question. (See opinion of Giegerich, J., in Gilbert v. Mechanics & Metals Nat. Bank;
See 95 Misc. Rep. 364.— [Rep,