125 N.Y.S. 93 | N.Y. App. Div. | 1910
Lead Opinion
On July 20, 1909, plaintiff signed his name to a blank check. Thereafter David Ryckoff and Benjamin Silberman stole the check, filled in the name of F. A. Mann as payee and the sum of $147.87 as the amount thereof, and presented it to the State Bank, where plaintiff kept his account, and procured it to be certified. Thereafter they indorsed said check with the name of F. A. Mann and passed it to defendant for value, who collected the amount thereof from the said bank. Plaintiff, having taken up said check from the bank now sues defendant as for money had and received for the amount of the check.
The question submitted, and which we are called upon to decide, is whether defendant obtained any title to the check which, as against the plaintiff, was a valid obligation for $147.87, As a general rule, one can only part with title to personal property by his voluntary act, or by conduct sufficient to create an estoppel. In the case of commercial paper it was long ago held that when by voluntary act a party intrusts another with such paper with a blank thereon designed to be filled up with a stipulated amount, such party is liable to a bona fide holder of the instrument, although the amount inserted was larger than that agreed upon. So, if the place of payment is left blank when the maker delivers it, the insertion of a different place of payment than that agreed upon will not avoid such paper in the hands of an innocent holder for value. (See Van Duzer v. Howe, 21 N. Y. 531; Redlich v. Doll, 54 id. 234.) The authorities are not harmonious as to the basis of this liability. Some deem that it rests upon an implied authority conferred by the maker upon the person to whom it was delivered to fill in the blanks, and others upon estoppel by reason of negligence. (National Exchange Bank v. Lester, 194 N. Y. 461, 465.) Upon neither of these grounds can the plaintiff be charged in this case. Certainly not upon the ground of implied authority, for that doctrine grows out of the relation of principal and agent, and there is no such relation between a thief and his victim. There is a vast difference in the rule of liability upon negotiable instruments between
None of the circumstances connected with the theft of this paper appear, except that it was stolen and that the persons guilty of the crime have been tried, convicted and sentenced for the same. Plaintiff, therefore, cannot be charged with negligence giving rise to an estoppel, unless a man is guilty of negligence in writing his name upon a piece of paper which by some possibility may after-wards be stolen from him, which paper afterwards comes into the hands of a third person who is an entire stranger to the transaction, with words written over the signature which are sufficient in form to make it a check or note. Actionable negligence involves, jm^st, the existence of a duty; second, the omission to exercise ordinary and reasonable care in connection therewith, and third, injury resulting in consequence thereof. In view of the contractual relation existing between the bank and its depositor, some duty of care may be owing to it. The bank, by the terms of its contract with him, is bound to pay on his account to the holder of paper bearing his genuine signature the amount called for, if such amount is to his credit. But a third person is under no obligation to honor his paper. He can take it or not as he pleases, and as a rule such paper is accepted in reliance upon the immediate transferrer thereof. (Trust Co. of America v. Conklin, 65 Misc. Hep. 1.) What duty, therefore, is owing to him ? Again, at the risk of being charged with lack of ordinary care and prudence, must one guard against the possibility of a crime being committed ? It has been held that where the maker of a completed negotiable instrument has parted with its possession, but it is in such form that it is possible to make alterations in it, he is not guilty of negligence in thus
This rule of law has now passed into the statute in these words: “ Where an incomplete instrument has not been delivered it will not, if completed and negotiated, without authority, be a valid contract in the hands of any holder, as against any person whose signature was placed thereon before delivery.” (Neg. Inst. Law [Con-sol. Laws, chap. 38 ; Laws of 1909, chap. 43], § 34.) The provision of the subsequent section of the same act, to the effect that “ where the instrument is in the hands of a holder in due course, a valid delivery thereof by all parties prior to him so as to make them liable to him is conclusively presumed,” must be read in connection with said section 34, and this provision does not apply in the case of an incomplete instrument, completed and negotiated without authority. (Crawford Neg. Inst. § 35, note.)
We conclude, therefore, that the delivery of a promissory note by the maker is necessary to a valid inception of the contract. The possession of such a note by the payee or indorsee is prima facie evidence of delivery, but if it appear that the note has never been actually delivered and that without any confidence, or negligence, or fault of the maker, but by force or fraud, it was put in circulation, there can be no recovery upon it, even when in the hands of an innocent holder.
The judgment appealed from must be reversed and a new trial ordered, costs to abide the event.
Jenks and Thomas, JJ., concurred; Woodward, J., read for affirmance, with whom Carr, J., concurred.
Dissenting Opinion
From the conceded facts it appears that the plaintiff signed a check, leaving the amount and the name of the payee blank. The instrument was stolen from his place of business by two persons, who filled in the amount, inserted the name of a fictitious payee, procured the same to be certified by the bank on which it was drawn and transferred the check to the defendant, who parted with the full apparent face value, partly in merchandise and partly in cash. The defense interposed was that the plaintiff was negligent in leaving the incomplete instrument where it could be stolen, and a fraud thereby perpetrated upon the defendant.
Section 34 of the Negotiable Instruments Law (Consol. Laws, chap. 38; Laws of 1909, chap. 43) provides: Where an incomplete instrument has not been delivered it will not, if completed and negotiated, without authority, be a valid contract in the hands of any holder, as against any person whose signature was placed thereon before delivery.” Section 35 of the same statute provides: “ Every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. As between immediate parties, and as regards a remote party other than a holder in due course, the delivery, in order to be effectual, must be made either by or under the authority of the party making, drawing, accepting or indorsing, as the case may be; and in such case the delivery may be shown to
“ Delivery,” as defined by section 2 of the Negotiable Instruments Law, “ means transfer of possession, actual or constructive, from one person to another.” By section 35 the delivery, to be effectual, must, as regards a remote party other than a holder in due course, be made either by or under the authority of the person making, drawing, accepting or indorsing, the instrument; and when the instrument is in the hands of a holder in due course, a valid delivery is conclusively presumed. The check in question was not delivered “ by or under the authority of ” the maker. But as to a holder in due course, that, it would seem, is not requisite. In the hands of such a party a valid delivery is conclusively presumed. The defendant was a holder in due course. (Neg. Inst. Law, § 91.) It follows that section 34 is not applicable, for that section presupposes that there has been no delivery. I, therefore, vote to affirm the judgment.
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Cabe, J., concurred.
Judgment of the .Municipal Court reversed and new trial ordered, costs to abide the event.