23 Abb. N. Cas. 172 | N.Y. Sup. Ct. | 1887
The notice was incomplete, for it did not trace the money to the check, which had been delivered by the plaintiff to Branscom, on the Nassau Bank. But its deficiency in this respect did not operate to the prejudice of the plaintiff, for it appeared by the conversation which, on November 6, took place between the plaintiff’s counsel, Henry H- Bowman and Mr. Crane, the president of the bank, that it was understood by him that the notice did not refer to this money still standing to the credit of Branscom in his account, and which had in fact been obtained from the Nassau Bank on the check by this defendant.
This conversation was induced by a letter written by the president, dated the same day, stating that they had no funds under their control which were deposited by Alexander C. Branscom, as manager or otherwise.
The president of the bank, in the interview between himself and Mr. Bowman, explained this statement as having proceeded upon the circumstance that an attachment had been issued in favor of the Conrows against Branscom, under which the money owing to him by the bank had been attached and the interview which then took place proceeded throughout upon the practical concession that the president of the bank understood the written notice to refer to the plaintiff’s check and its proceeds, ■which had been collected by it and placed to the credit of Branscom.
It further appeared that the attachment proceedings were discontinued November 8, before the check in favor
The cases of Ætna Bank v. Fourth National Bank (46 N. Y. 82) and Justh v. National Bank of Com. (56 Id. 478) do not protect the bank in making this payment of the money. In the first of these cases no question bearing any relation to this disposition of the money arose. It is no more than a decision concerning the effect of certifying a ■check, while in the latter case the money was paid out in good faith, which protected the bank on account of that circumstance not appearing in this case.
Neither did the attachment proceeding afford the bank •any legal reason for paying out this money after it had been advised of the claim or right of the plaintiff. For as that was issued against Branscom alone, no more could be ■seized under it than his right or interest in the money in ■controversy, and that was subordinate to the legal right of the plaintiff to reclaim it upon the discovery of the fraud •.and forgery and the election to rescind their agreement with Branscom. But it was not pretended and could not have been, that the attachment afforded any protection to the bank, for it had in fact been withdrawn as well as the levy under it, and the money was paid over in compliance with the check of Branscom, who had in this manner fraudulently received the. plaintiff’s check, and that in this state of the facts it had the right to disaffirm its transactions with
That this was the identical money produced "by the plaintiff’s check, is established by the fact that it was the last deposit in Branscom’s account, and this balance of it remained unpaid to him. The checks or drafts, previously made by him upon his account were, as a matter of legal presumption, first paid out of the preceding deposits, and the residue only not so paid, were then paid from so much of the last deposit as became necessary to meet their amounts.'
This presumption applies where no intervening circum.stance is made to appear justifying its exclusion, and there is no such circumstance in this case, for the account was kept generally as a debtor and creditor account in favor of Branscom, placing to his credit his deposits and charging against them the checks drawn by him in the order in which they were so drawn. And when that is the case, the presumption already mentioned applies—that the checks are-paid in the order in which they are drawn, out of the earlier, instead of the later deposits of money. Pennell v. Deffell, 4 De Gex, M. & G. 372, 384, following the rule in Clayton’s case, 1 Merrivale, 572, 608, and this has been farther sanctioned by the case of Knatchbull v. Hallett,. Law Rep. 13 Ch. Div. 696, and Dowes v. Kidder (supra) may not improperly be said to support the application of the same principle.
The bank, however, may still escape liability if the-fund parted with in this manner shall be recovered from the other defendants. For the object of the action is to follow and recover the fund as the equitable property of the plaintiff. The defendants Conrow received it in a manner charging them with notice of the plaintiff’s right to the money. If that had not been the fact, then under the authority of Stephens v. Board of Education (79 N. Y.
At the close of the proof, an application was made by the counsel for the Conrow Brothers, for a direction that the plaintiff should elect which of the defendants it would claim to hold.
This was objected to by the plaintiff, but the court nevertheless required the election to be made, and to that ruling the plaintiff excepted, and under it the election was made to proceed against the bank, and the complaint was dismissed as to the Conrow Brothers. There was no founda
It had the right also, to claim that theée defendants were-primarily liable to it, and the bank liable only ■ in case satisfaction could not be obtained from them, and for the-complete and effectual disposition of the controversy these-persons were all necessary parties to the action.
The case was erroneously disposed of, and the judgment should be reversed and a new trial ordered, with costs to-abide the event.
Van Beunt, P. J., and Beady, J., concurred.
Note.—The complaint, omitting formal parts, is inserted here as a useful precedent.
I. [The incorporation and the partnership were alleged in the usual form.]
II. That heretofore, and on or about October 14, 1884, the-plaintiff entered into a contract with defendant Branscom, whereby the plaintiff agreed to sell to said defendant certain merchandise, and also to advance to him the sum of §4,500 upon the faith, of a. certain paper, purporting to be a promissory note, [stating its tenor, ] ■which said note purported to be signed by William Oliver, as Secretary and Treasurer of said Mississippi Mills, a corporation organized in the-State of Mississippi, and which note also purported to be indorsed by the payee named therein, and made payable thereby to the order of the-defendant Branscom; and that on or about the said October 14, 1884, a paper purporting to be the promissory note as above
III. That thereafter, and on or about October 29, 1884, at the request of the said defendant Branscom, and in pursuance of the aforesaid contract, the plaintiff, relying upon the genuineness and validity of the said alleged promissory note, and the indorsements thereon, advanced and delivered to the defendant Brans com, the sum of §4,500, which the defendant Banscom received in pursuance of the said agreement, and solely upon the faith of the validity of the said alleged note, and the genuineness of the signature and indorsements thereon, and not otherwise.
IY. That, as plaintiff is informed and believes, the defendant Branscom deposited the same sum of $4,500 with the defendant, ¡National Shoe and Leather Bank, and that said bank received the same money from the said Branscom, and placed it to his credit in an account kept therein with said Branscom under the name of “ A. 0. Branscom, Manager,” and that, as plaintiff is further informed and believes, of the said sum of money so deposited, a large portion, and about the sum of $2,925, so remained deposited in the said bank to the credit of the defendant Branscom until ¡November 8, 1884.
Y. The plaintiff further alleges, upon information and belief, that the above described paper purporting to be a promissory note, with the indorsements thereon, was nota valid promissory note, in that the signature thereto was not the genuine signature .of an officer of the Company styled “Mississippi Mills,” nor made by any officer or agent of said company having authority to sign the said note, and that the said note was never issued or delivered by the alleged maker thereof or by any officer or agent thereof, duly authorized for that purpose ; and also that the said paper was never duly endorsed by Col. Ed. Richardson, the payee therein named, and that no indorsement upon said note, excepting that made by the defendant Branscom, was genuine, and by reason thereof the said paper, upon the faith of which this plaintiff had advanced to the said defendant Branscom the said sum of $4,500, was of no value and of no force or effect as against said ¡Mississippi Mills or the said Richardson whatsoever, all of which the
VI. That from the time of the delivery of said pretended promissory note to the plaintiff as aforesaid, at all times until on or about November 5, 1884, the plaintiff believed the said note, the execution and delivery thereof, and the indorsements thereon were each and all genuine and valid, and that on the said November 5, 1884, for the first time, this plaintiff was informed that said note was not genuine as to its signature; that it had not been duly made or delivered by the said Mississippi Mills, and that the indorsements thereon prior to that of the defendant Branscom were not genuine, and that the said note was of no force or effect as against the makers or indorsers other than defendant Branscom.
VII. ’ That immediately upon being so informed, the plaintiff rescinded and annulled the aforesaid agreement between it and the defendant Branscom, and also gave notice of all and singular the aforesaid matters and things to the defendants other than Alexander C. Branscom, and in particular notified them, and each and every of them, that the afore-' said sum of $4,500 had been obtained by the defendant Branscom from the plaintiff by trick and device, fraud and false pretenses with respect to the aforesaid paper purporting to be a promissory note, and the pretended indorsements thereon; and also notified them, and each of them, that the said sum of money so remaining on deposit in'the said bank to'the credit of the said Branscom, was a part of the same money which this plaintiff had so advanced to the said Branscom by reason of the said false pretenses and fraudulent representations, and that the said agreement under which the same had been so advanced, had been rescinded by the plaintiff, and also by the voluntary act of the defendant Branscom, and that this plaintiff was the sole' owner of the said sum of money remaining on deposit in said bank to the credit of said A. 0. Branscom, manager, and that the said defendant Branscom, had no right, title, or interest in, or to the said moneySj but that he held the same solely for the use and benefit of the plaintiff, and as' its trustee thereof.
VIII. That thereafter, as plaintiff is further informed and believes, and on or about November 8, 1884, with full knowledge of all and' singular the matters and things hereinbefore alleged, the three defendants Oonrow acting in their own behalf, and also by their agent and attorney, represented to the defendant Branscom that they
IX. That, as plaintiff is further informed and believes, the defendant, Alexander 0. Branscom, is wholly insolvent, and has no property within the State of New York or elsewhere, out of which a judgment for an)' sum of money whatever could be collected or satisfied, and that a judgment for the said sum of $4,500 advanced and paid to him as aforesaid, or any part thereof, would be of no value to the plaintiff .and that the plaintiff has no remedy or means in .law of collecting the said sum of $4,500 or any part thereof, except by establishing its right to the specific sum of money deposited by the said defendant Branscom as aforesaid, with the defendant bank, and so remaining on deposit until November 8, 1884.
Whekefoue, plaintiff demands judgment :
1. That the contract between the plaintiff and defendant, Alexander ■O. Branscom, entered into on or about October 14, 1884, hereinbefore described, is null and void, and that said defendant produce said iwriting and deliver the same up to be cancelled.
3. That the defendant Alexander C. Branscom, acquired no right in, or title to, the said sum of $4,500 so delivered to him by the plaintiffs on October 29, 1884, or any part thereof, but held the same only as the trustee of the plaintiffs, and to the plaintiffs’ sole use.
4. That prior to November 8, 1884, the plaintiffs gave to the defendants, and each and every of them, due notice that the said sum of $4,500 had' been obtained from the plaintiffs by the defendant Branscom by fraud and deceit, and that by reason thereof, plaintiffs had rescinded the contract under which it was obtained and had demanded the return of said money and every part thereof, and also that the sum of about $2,915; then on deposit to the credit of the defendant, Alexander C. Branscom, with the defendant, The National Shoe and Leather Bank, was a part of the said sum of $4,500 obtained by fraud and deceit, as aforesaid, and that the plaintiffs demanded that the said sum so deposited with said bank be paid to it.
5. That on November 8, 1884, the defendant Branscom andi the three defendants Conrow conniving together, caused the said sum of $2,915 to be paid out of said bank to the defendants Conrow, copartners as aforesaid, or to their order, and that for the said money the defendants Conrow gave no present consideration to said Branscom,
6. That the plaintiffs recover of the defendant, Alexander C. Branscom, the sum of $4,500 with interest thereon from October 29, 1884.
7. That the plaintiffs recover of the defendants other than said Branscom the sum of $2,915—with interest from November 8,. 1884.
8. For the costs of this action.
Smith & Bowman,
Plaintiffs' Attorneys.
A new trial was had in March, 1888, before Andrews,. J., resulting in a judgment in favor of plaintiffs and against all the defendants for the amount claimed. The judgment contained the following provisions as to its enforcements “ It is further ordered and adjudged, that this judgment shall be first enforced against the three defendants, Theodore Conrow, James W. Conrow and William E. Conrow,