133 N.Y.S. 614 | N.Y. App. Div. | 1912
Lead Opinion
On May 9, 1898, the firm of Scholtz, Sanchez & Co. drew the following draft:
“No. 1233. New York, May 9th, 1898.
“ No. 45305 ne varietur.
“ Exchange for Fres. 35,000.
“At sixty days after sight of this first of exchange (Second not paid) pay to the order of Messrs. Muller, Schall & Co. the sum of thirty-five thousand francs. Value received which place.to account as advised.
“SCHOLTZ, SANCHEZ & CO. “(de N. & 0. ie.)
“To Messrs. Demachy & F. Seilliere, Paris.
“Rue de Provence 58.”
“ Scholtz, Sanchez & Co. No. 1234.
“New York, May 9th, 1898.
“Exchange for Frc. 35,000.
“At sixty days after sight of this first of exchange (Second not paid) pay to the order of Messrs. Demachy & F. Seilliere the sum of thirty-five thousand francs. Payable in Paris. Value received which place to account as advised.
“SCHOLTZ, SANCHEZ & CO.
“To Mr. Jose Invernizio, Tortona, Italy.”
And sent it to the payees therein named, the drawees of the first draft, with a letter of advice, in which they stated:
“ Against this remittance we have taken the liberty of drawing on you our draft $1233 at 60 days’ sight, in favor of Messrs. Muller, Schall & Co. for Fes. 35,000 which please accept as usual.”
They also on the same day wrote to Invernizio referring to his having authorized them to draw at sight on him for account of shipments made to his house in Caracas, and informing him of said- draft drawn upon him. The plaintiffs sent the draft purchased by them to their Paris correspondent for presentment to the drawees, but before it was presented the drawers, under the laws of the State of New York, made a general assignment for the benefit of creditors to the defendant; wherefore the drawees refused to accept the draft when it was presented, and, without presenting the Invernizio draft
At first glance, it seems plain that in equity and good conscience the plaintiffs have the better right to the fund, but when we come to support our off-hand impression by settled principles, we encounter difficulties.
Both drafts were upon their face negotiable bills of exchange, and it is well settled that a draft, drawn upon the general credit of the drawer with the drawee, does not operate to assign a particular account or fund, even though one is indicated, to which the draft is to be charged or out of which the drawee is to reimburse himself, as the case may be. If, however, it was the intention and understanding of the parties that the draft should be paid out of a particular fund and not absolutely and at all events, it will operate as an assignment thereof. (Brill v. Tuttle, 81 N. Y. 454.)
Our difficulty is not lessened by the circumstance that the ' case is submitted upon an agreed statement of facts, for, if conflicting inferences are permissible, we may not choose between them, but must confine our decision to the facts stated. (Bradley v. Crane, 201 N. Y. 14; Marx v. Brogan, 188 id. 431.)
I think it is a necessary conclusion from these facts that the plaintiffs purchased the draft on Demachy & F. Seilliere on the faith of their promise to accept it upon the security of the Invernizio draft to be furnished therewith, and on the faith of the drawers’ promise to send to the drawees a draft for like amount on Invernizio, and in reliance upon the drawers’ assurance that Invernizio. was indebted to them in that amount.
If Demachy & F. Seilliere had accepted the draft on them, but had failed to pay at maturity, the plaintiffs on the principle of subrogation would have been entitled to the Invernizio draft, or its proceeds. (Ten Eyck v. Holmes, 3 Sandf. Ch. 428; Vail v. Foster, 4 N. Y. 312; Wager v. Link, 134 id. 122; 150 id. 549.) I am unable to perceive how in principle the case is any different from the fact that the drawees broke their promise to accept, instead of a promise to pay after acceptance. They had given a promise to accept, qualified only by the condition that they be furnished a like draft on Invernizio. On the faith of that promise and the drawers’ promise to comply with that condition, the plaintiffs paid $6,662.50 to the latter. Upon the receipt by the drawees of the Invernizio draft, they stood in a sense as surety for the drawers to the plaintiffs, who had advanced money on the faith of their promise.
It is frequently a nice question to what extent a promise to accept a bill not in existence binds the promisor to third parties. who have acted on the faith of it. Section 223 of the Negotiable Instruments Law provides: “An unconditional promise in writing to accept a bill before it is drawn is deemed an actual acceptance in favor of every person who, upon the faith Vthereof, receives the bill for value.” (See Gen. Laws, chap. 50
The Revised Statutes contained the same provision (see 1 R. S. 768, § 8), which was but declaratory of the common law. (See Mason v. Hunt, 1 Doug. 297.) In that case Lord Mansfield said: “But an agreement to accept is still but an agreement, and if it is conditional, and a third person takes the bill knowing of the conditions annexed to the agreement, he takes it subject to such conditions.” (See on the general subject Coolidge v. Payson, 2 Wheat. 66; Murdock v. Mills, 11 Metc. 5; Greele v. Parker, 5 Wend. 414; Bank of Michigan v. Ely, 17 id. 508; Ulster County Bank v. McFarlan, 5 Hill, 432; 3 Den. 553; Shaver v. Western Union Tel. Co., 57 N. Y. 459; Merchants’ Bank v. Griswold, 72 id. 472; Ruiz v. Renauld, 100 id. 256; Germania National Bank v. Taaks, 101 id. 442; Story Bills, § 249; 1 Pars. Notes & Bills, 292.) To be sure, the Negotiable Instruments Law only covers the case of an unconditional promise to accept, doubtless because, in general, conditions attached to commercial paper deprive it of the attribute' of negotiability, though an acceptance of a bill may be conditional. The fact that the promise to accept in this case was! conditional upon the drawee’s having security is a cogent, in not a controlling, reason for thinking that the bills were non drawn on the general credit of the drawers, and that the rules] applicable to negotiable bills do not apply. Very likely the obligations of the drawees depend on the laws of Prance (see Boyce v. Edwards, 4 Pet. 111), but it is not necessary for us to determine precisely what those obligations were. We are dealing with a contract made in the State of New York, and are directly concerned only with the rights of the immediate parties to it as between themselves. It is sufficient for our purpose to hold that the purchase of a draft upon the drawees’ promise to accept it, coupled with the drawers’ promise to secure the drawees, equitably entitled the purchasers to the promised security upon the failure of the drawees to fulfill their promise, and that, too, independently of the precise nature of the obli, gation assumed by the drawees on making the promise.
The question still remains whether the Invernizio draft operated to transfer, or to create any charge or lien upon,
Viewing the matter, then, in the light of the knowledge which the plaintiffs had when they purchased the Paris draft,
It is wholly immaterial that the draft was never presented to or accepted by Invernizio. This is not a suit on the draft.
It is unnecessary to go so far as to decide that the draft operated as an equitable assignment, and the cases which have -arisen between payee and drawees are not in point. Indeed, I think that the parties could have agreed that the debt of the drawee should be treated as security without in any way interfering with the negotiability of the bill. If they intended that Invernizio’s debt should be a security for the ultimate payment of the draft, equity, as between the parties or volunteers, can give effect to that intention by creating a "lien or charge upon the debt, if not by raising a trust out of the circumstances of the case. The only hesitation I have is as to whether we can say from the agreed facts as a matter of law that such was the intention of the parties. In Throop Grain Cleaner Company v. Smith (110 N. Y. 83) the court held as a matter-of law that the surrounding circumstances showed an intention of the parties that the drafts drawn by a creditor on its debtor should operate to transfer the debt to the payee, and in Fourth Street Bank v.
The plaintiffs should have judgment in accordance with the terms of the stipulation.
Ingraham, P. J., and McLaughlin, J., concurred; Dowling and Laughlin, JJ., dissented.
Dissenting Opinion
The agreed statement, of facts upon which this controversy was submitted contains no recital that Muller, Schall & Co.
Nor can plaintiffs find relief under the provisions of the. Negotiable Instruments Law (Gen. Laws, chap. 50 [Laws of 1897, chap. 612], § 223; Consol. Laws, chap. 38 [Laws of 1909, chap. 43], § 223), because thereunder the promise in writing to
It would seem, therefore, that judgment should be given in favor of defendant, with costs.
Laughlin, J., concurred.
Judgment ordered for plaintiffs in accordance with stipulation. Order to be settled on notice.