Messenger v. Fourth National Bank

| New York Court of Common Pleas | Dec 6, 1875

Bobinson, J.

In November, 1867, one F. S. Freese, being the creditor of the New Jersey Stock Yard and Market Company, in the sum of $12,500, or $12,400, and of Joseph McPherson, its superintendent, individually in about $2,900, demanded payment of him, and accepted towards payment the joint note of said McPherson and William B. Arthur, the President of said Stock Yard and Market Company, for $15,000, payable to his order at thirty days. He applied to plaintiff to •discount it, who agreed to have it discounted at the bank, if changed to a note of like amount and date, payable to their order. It was accordingly so changed for that purpose, and plaintiffs, in payment of such proceeds of its discount, and at their request, gave him their check, payable to the order of said W. B. Arthur, for $14,830, “ balance, less discount and collection paid in cash.” Such collection fee being “ something less than $100.” Mr. Arthur was not an accommodation maker, but united in the note, as he says, at McPherson’s request, “ to save himself from paying $15,000 to another party. I (he) owed $15,000. I (he) was responsible for $15,000.” * * * “ The First Rational Bank of Rew Jersey.” “ That was the party to whom I (he) stood responsible ” “for McPherson.” Although the cheek for $14,830 was made payable by request of Freese to Arthur, the former, so far as appears, was the party equitably and wholly entitled to the money, and Arthur could only have acted as trustee for his benefit. The check was paid upon the ostensible indorsement of Arthur, the payee, made-through Freese’s assumed agency for that purpose. Mr. Arthur in no way disputed the payment of the $15,000 note, when it became due, on account of want of consideration, but after being advised of the circumstances under which the consideration was. advanced, paid it with $6,000 cash, which he received from McPherson, and his own note for $9,000 in renewal for the balance, which he has paid in full. He thus recognized and admitted the validity of his obligation thereon, and responded to it.

The controversy, therefore, by these acknowledged and undisputed facts, is narrowed down to the mere question as to the efficacy of the indorsement of Mr. Arthur’s name upon the check by Freese, its holder and beneficial owner, under any authority, express or implied, or by recognition and adoption. It appears from proof given without contradiction, that Arthur,, during the course of all these transactions, in no way repudiated the original transaction occurring in form and legal effect immediately between himself and the plaintiffs, that he never questioned the validity of his note for want of consideration, but has repaid the plaintiffs in full the amount they had advanced by their check to his order (which alone constituted any such consideration), through indorsement thereon by such assumed acts of agency. The principal has asserted no rights as against the plaintiffs for money paid by mistake or misapprehension, nor is. any suggestion made of any facts upon which he could found any such reclamation. Arthur had no actual interest in the money payable by the check drawn to his order. It was the proceeds of his own note given to Freese in payment of a subsisting debt, and the question of Freese’s original authority to. make the indorsement for him became entirely superseded by his subsequent and unquestioned recognition and ratification of the act. A principal, when advised of the illegal acts of anyone assuming to act therein as his agent, is bound to repudiate them, and any omission to do so within a reasonable time amounts to a ratification (Law v. Cross, 1 Black [U. S.] 539; Story on Agency [7th ed.] § 256 and notes). If Freese acted improperly in assuming to indorse the check as Arthur’s agent, he is liable for any damages sustained by his assumed principal, but as between Arthur and the plaintiffs, it is evident that Arthur has fully recognized and adopted the means by which .the full consideration of his note, made payable directly to plaintiff, and constituting the expression and measure of his obligation to them, was advanced and paid. Ho right of reclamation of the moneys he thus paid them is or can well be suggested, and it is evident that he, if any one, and not they, are the losers by any unlawful assumption of Freese to act as his agent.

So far as plaintiffs are concerned, it is evident they can have no interest in the present question, and are not entitled to recover from the defendants for money drawn on their check, which has been paid to the parties in interest, and for which they have been fully compensated by the person in whose behalf the money was so drawn from the bank, whether by his direct action, or through an assumed agency. While regarding these considerations, arising out of the case presented by plaintiffs as decisive of the merits of this controversy, and fully establishing defendant’s exemption from responsibility for payment of plaintiff’s check now brought in question, I deem the reasons assigned in the opinion of Chief Justice Daly upon the points presented on the motion for a new trial as completely answering the argument made on this appeal. He has precisely stated the law applicable to such a motion for a new trial, both upon the point raised as to the deafness of the juror, and as to the device and trick used by Rutherford to obstruct plaintiff in finding the witness Dana, even if those means had been shown—as it was not—to have been in any respect successful, or influencing Dana’s conduct. Plaintiffs, if appreciating the materiality of his testimony, should have enforced his attendance on their behalf by subpoena; and if unable to do so, should have applied to the court for a postponement of the trial or withdrawal of a juror, as they might and ought to have done, under the authorities cited in the opinion of Chief Justice Daly. They could not avail themselves of the chances of a verdict, with full understanding of the importance of the testimony in their favor, and after defeat allege their own remissness, although aggravated as to its consequences by the unfair conduct of some third person, as a ground for defeating the consequences of the verdict upon the testimony presented and submitted to the court and jury.

The order denying the motion for a new trial should be affirmed, with costs.

Larremore and Joseph F. Daly, JJ., concurred.

Order affirmed accordingly.