157 N.Y.S. 340 | N.Y. App. Term. | 1916
Lead Opinion
Plaintiff sued for goods sold and delivered. Defendant pleaded payment. Plaintiff is the liquidating partner of the partnership of Siegel & Scheinbaum, which was doing business under the name of the S. & S. Silk Mills.
Defendant testified that one Schrager called upon him representing the S. & S. Silk Mills and sold him three lots of goods. Defendant received three separate bills for these goods and paid the bills by three separate checks drawn to the order of the S. & S. Silk Mills and given on three different occasions personally to Schrager, who then marked the bills “ paid.” The first two of these checks Schrager gave to plaintiff’s assignors, who accepted, deposited and collected them. The third check Schrager converted to his own use by forging ■ the payee’s endorsement. One of plaintiff’s assignors testified, without contradiction, that Schrager was merely a salesman on a twenty per cent commission basis with a drawing account of five dollars a week, without authority either to collect money or endorse checks, and he added, speaking of the time when Schrager brought in the first two checks, “ I told him distinctly that I did not want him to bring me down these checks any more. I said '1 do not want you to collect money for me, I can go myself. ’ ” Defendant, however, was never notified not to pay Schrager.
On this appeal, nothing but a question of law is- involved. We may start with the principle laid down by Rapallo, J., in Thomson v. Bank of British North Am., 82 N. Y. 1, 8: “ The case then presents the simple question whether a party paying his own debt by a check to the order of his creditor, or of a party nominated by his creditor, can be called upon to pay it again, in case the creditor loses or is defrauded of the check and it is paid to the finder or fraudulent
It being settled, therefore, that a check will not be regarded (except under extraordinary circumstances) as payment until it is actually paid, the question arises what significance is to be attached to its payment. To answer this question, it is .first necessary to determine what we mean by payment. For judicial purposes at least, a check cannot be regarded as having been paid unless the amount therein called for has been paid either to the payee or to one authorized by him to receive the proceeds, or to put it in a more popular phrase (almost invariably applicable) to one authorized by the payee to endorse his name thereon. In the absence of such endorsement, it has been held repeatedly by our highest court that where a wrong-doer has appropriated a cheek, the payee may either recover from the maker as his debtor (Thomson v. Bank, supra; Talbott v. Bank of Rochester, 1 Hill, 295) or from the bank upon which the check is drawn as for conversion of the check or of its proceeds by their payment to one other than the payee. Robinson v. Chemical Nat. Bank, 86 N. Y. 404 (which expressly approves the opinion in the court below, reported in 10 W. Dig. 315). See also Johnson v. First Nat. Bank, 6 Hun, 124; Burstein v. Peoples Trust Co., 143 App. Div. 165.
There are, it is true, a number of expressions in the opinions in some cases which intimate a contrary rule, but when the cases are examined it will be found that they actually proceed upon the accepted general principle, but that the agent in those cases who endorsed
In the Sage Case (supra), “ The plaintiff (payee) did not say that Cook (the agent) was not authorized to receive or endorse them (namely, the checks).” Indeed, it was pointed out that plaintiff, the payee, had prior to the institution of the suit brought a criminal proceeding in which he charged his agent with grand larceny of the proceeds of the check — a charge which necessarily proceeded upon the theory either that the agent had been previously authorized to endorse and collect the proceeds of the check, or that his action in so doing had been ratified by the payee. In the Morrison case it is mentioned that the learned trial judge
Whether an agent, other than one in general charge of the payee’s business, having authority merely to collect money, is thereby impliedly authorized to endorse checks in the payee’s name, does not seem to •have been passed upon directly by the Court of Appeals. The decision in Prochowick v. Boyd, 15 N. Y. St. Repr. 809, affd., 119 N. Y. 641, does not go so far. But there is no pretense in the instant case that the employee, Schrager, had authority even to receive or collect money on behalf of plaintiff’s assignors, and certainly none to endorse plaintiff’s name on checks. Since, therefore, he was not authorized and does not claim that plaintiff held him out, expressly or impliedly, as having had such authority, there is no room for the application of the doctrine of estoppel. As is
I cannot see why this same argument should not be applied if the maker of the check handed it directly to his creditor, the payee, and then some other person by fraud or accident secured the' check and realized thereon by a fraudulent endorsement. The maker would certainly in that case suffer the same inconvenience, yet it is clear upon every precedent that he could not successfully plead payment of the debt. The same consideration prevents our regarding the mere receipting of defendant’s bill as paid upon delivery by him of the check to the agent as sufficient evidence that the check was received as payment. That conclusion certainly would not follow if the payment were made to, and the receipt given by, the principal himself, and no greater significance can attach to the same acts on the part of the agent. Thomson v. Bank, supra.
There remains then but one case which requires con
On the whole, therefore, I think that the case at bar has been properly decided in favor of plaintiff on the simple principle that the checks in controversy cannot be regarded as payment of the debt from the maker to the payee until or unless the checks have been paid to the payee or one duly authorized either expressly or impliedly to receive the proceeds thereof on his behalf.
Concurrence Opinion
(concurring). I concur with Mr. Justice Bijur in believing that the higher court could not have meant to-lay down the general rule that a mere naked authority to collect or receive checks carries with it power to endorse the principal’s name on such checks and convert them into cash. In the case at bar there
Judgment affirmed, with twenty-five-dollars costs.