52 N.Y.S. 1118 | N.Y. App. Div. | 1898
The individual defendants as executors of Adderton were depositors with the defendant bank. One Grant B. Taylor, an attorney at law, was the counsel for the executors. He forged the names of the executors to certain checks, and by these checks obtained from the defendant bank the sum of $2,400. Afterwards, Taylor opened an account in the plaintiff bank, and deposited with it a draft for $6,000 drawn by the Columbus Trust Company on the Chase National Bank, and payable to the order of one Charles Curie. The name of Curie and that of Taylor were indorsed on the draft. Taylor then drew his check on the plaintiff bank to the order of the estate of John L. Adderton for $2,400. This check he indorsed, “For deposit, Est. John L. Aderton, by G. B. Taylor,” and deposited, the same with the defendant bank to the credit of the defendant executors. The check was collected by the defendant bank through its correspondent in New York city and the clearing house, in the usual course of business. Subsequently the plaintiff bank discovered that the indorsement of Curie was not made by him, nor by his authority. There is something singular about, this draft which is not explained by the evidence. Curie testified that the indorsement was not his, nor authorized by him. But the plaintiff conceded that the proceeds of the draft did not belong to Curie, and that he made no claim on them. Who really owned the funds represented by this draft does not appear; and the referee, while he has found that Taylor wrote Curie’s indorsement, has not found that it was a forgery, or that Taylor was not the real owner of the draft. Upon, discovering the fact that Curie’s signature' was not genuine,
It is conceded by the learned counsel for the appellant that the check drawn by Taylor on the plaintiff is to be considered as money, and that the effect of the transaction is the same as if Taylor had drawn the money from the plaintiff and paid it to the defendant bank. It is also conceded that it is settled law in this State, under a line of authorities, that money, whether obtained by fraud or by felony, cannot be recovered where it has been paid to the creditors of the party who has thus criminally obtained it, even when the only consideration for the payment was the satisfaction of an antecedent debt. (Justh v. National Bank of the Commonwealth, 56 N. Y. 478; Stephens v. Board of Education, 79 id. 183; Goshen National Bank v. State, 141 id. 388; Hatch v.- Fourth National Bank, 147 id. 184.) The principle on which these decisions rest is thus stated by Judge Finch in Hatch v. National Bank (supra): '“This doctrine goes upon.the ground that money has no earmark; that in general it cannot be identified as chattels may be, and that to permit, in every case of the payment of a debt, an inquiry as to the source from which the debtor derived the money, and a recovery, if shown to have been dishonestly acquired, would disorganize all busi-' ness operations and entail an amount of risk and uncertainty which no enterprise could bear.” It is clear that, under .this rule, had either the defendant bank or the defendant executors known of Taylor’s first forgeries (the checks aggregating $2,400), and received his check on the plaintiff bank on account of the claim that either one or the other of the defendants had against him on account of those forgeries, the plaintiff’s action could not be maintained. This the appellant does not deny. The only question, therefore, presented upon this appeal is whether the facts of this case place it outside the general rule.
Prior to the time of the commencement of this action, all- the defendants were ignorant of Taylor’s wrongdoing. The forgery of the checks for $2,400, of course, did not in reality diminish the debt
The Special Term directed that separate bills of costs be allowed the defendants. We think that this direction was unauthorized. This was an action in equity where the costs were in the discretion of the court. By section 1022, Code of Civil Procedure, where the whole issues in an action are referred, the award of costs can be only made by the referee.
The judgment appealed from should be modified so as to direct that the defendants recover but one bill of costs, and as modified affirmed, with costs.
All concurred.
Judgment affirmed, with costs.