National Bank of Commerce v. Manufacturers & Traders' Bank

Headnote

A draft for $17 drawn by the plaintiff upon the M. Bank, its correspondent in ISfew York city, was raised to $3,462.40, and deposited by the payee with defendant, it giving credit for the full amount; this amount was paid by the M. Bank on presentation of the draft, and charged to plaintiff. On discovery of the fraud, defendant wrote to plaintiff stating that if the latter would procure the draft, and send it with an affidavit of correct amount, and not make the matter public, it would remit difference. Plaintiff procured the draft and sent it to defendant with the affidavit as requested; the latter not having remitted as agreed, plaintiff wrote stating that if not immediately placed in

funds as promised, it would refuse credit to the M. Bank, and thereafter sent this telegram: “Remit difference in draft or return it with affidavit by express to-day,” and on the same day plaintiff notified the M. Bank, that it would not recognize payment of draft for more-than the original amount. Defendant returned the papers as requested. Subsequently by arrangement between the defendant and the M. Bank, to which plaintiff was not a party, that bank credited plaintiff with $3,533.90. In an taction to recover the balance, held, that plaintiff’s acceptance and compliance with defendant’s proposition, obligated the latter to pay the face of the check, as raised, less the sum for which it was originally drawn, but that the subsequent transactions were in. legal effect a rescission of such contract; that the action could not be maintained as one for money had and received, as it was not the money of plaintiff, but that of the M. Bank, which defendant obtained, and this, that bank could not have recovered of plaintiff, but only from defendant.

Also held, that the fact the M. Bank charged the balance in its account with plaintiff did not affect the legal status of the parties.

Appeal from judgment of the General Term of the Supreme Court in the fifth judicial department, entered upon an order made April 14, 1888, which reversed a judgment in favor of the plaintiff entered upon the report of a referee, and ordered a new trial.-

On the 30th of October, 1882, the plaintiff drew a draft on the Manhattan Bank, its Mew York correspondent, for $17 to the order of J. T. Watson. The payee, or some other person altered this draft by changing the date to Movember second, the name of the payee to James T. Watson, and tie" amount to $3,462.40. Movember 3, 1882, Watson deposited this raised draft with the defendant, and had credit for the full amount. The defendant forwarded the draft to its Mew York correspondent, the Bank of the ¡Republic, and that bank presented it at the Manhattan Bank, which paid the full amount of $3,462.40, and charged that amount to the plaintiff. On the fourteenth of Movember, the defendant inquired of the plaintiff by telegraph for what amount- the draft Mo. 9699 was issued, and the plaintiff at once replied that it • was issued for $17. On the same day the defendant

wrote the plaintiff acknowledging the receipt of the reply, and' saying that Watson had deposited the plaintiff’s draft for-' $3,462.40 on Hovember third, had drawn part of it, that, defendant had forwarded the draft to Hew York, and the-same nad been paid by plaintiff’s correspondent. The letter-closed as follows: “ Please procure the draft from your correspondent, make affidavit to correct amount and send it with the draft direct to me and I will remit difference Please do not make this matter public, as we hope to catch Watson.” Two days later the plaintiff answered that the draft had been ordered returned, and that the defendant’s wishes should be strictly complied with. The plaintiff procured the draft-from its correspondent, made affidavit to the correct amount; and, on Hovember twenty-first, sent this affidavit and the draft: to the defendant and did not make the matter public. Hovember twenty-fifth, the defendant acknowledged its receipt of the-draft and affidavit in a letter in which it also raised the question whether the signature of plaintiff’s cashier to the draft was not also forged. Replying to this letter two days later, the plaintiff, among other things, said: “We have complied" with your every request, even to keeping the matter strictly confidential, and now beg to request that you remit immediately. The excess stands charged against us on the books of the Manhattan Bank and we desire to‘ be placed in funds that: it may be corrected. * * * Unless immediately placed in funds as promised by you, our remedy will be to refuse credit to the Manhattan, who paid the draft on your indorsement, and that of the Hational Bank of the Republic, your Hew York agent, and it should be refunded at once.” Plaintiff followed its letter by the following telegram to defendant on Hovember twenty-ninth: “Remit difference in draft, or return it, with affidavit attached, by express to-day.” Thereupon and on December second, the defendant returned to plaintiff the draft and affidavit, who retained them. On the same day that plaintiff' demanded the return of the draft and affidavit, it wrote to the bank of the Manhattan Company reciting the facts and notifying it that the plaintiff would not:

recognize the payment of the draft for more than the original amount, to wit, $17. Nevertheless, the Manhattan Company, in the next account current rendered by it, charged the plaintiff with the full amount, of the raised draft. Subsequently, by some arrangement between the Manhattan Bank and defendant, to which the plaintiff was not a party, the Manhattan Bank credited to the plaintiff on account of this draft the sum of $2,533.90. The defendant declined to pay the balance of $911.50 to plaintiff, and this action was brought to recover the same.

Where the case does not contain all the evidence, the court must assume that the facts proven were sufficient to sustain the findings. (Kellogg v. Thompson, 66 N. Y. 88 ; Murray v. Marshall, 94 id. 611, 617; Porter v. Smith, 35 Hun, 118 ; Howland v. Howland, 20 id. 472.) The plaintiff proved the promise of the defendant and its (plaintiff’s) compliance with defendant’s request. This made a complete contract with a valid consideration, and entitled the plaintiff to recover. (Train v. Gold, 5 Pick. 380 ; C. S. Church v. Kendall, 121 Mass. 529 ; Willetts v. Ins. Co., 45 N. Y. 45 ; Sands v. Crook, 46 id. 564; White v. Baxter, 71 id. 254; Marie v. Garrison, 83 id. 26; Brooks v. Ball, 18 Johns. 337 ; 2 Hill, 503 ; 1 Den. 508 ; 15 Abb. Pr. 340 ; Miller v. McKenzie, 95 N. Y. 575 ; Hurd v. Green, 17 Hun, 327 ; Roberts v. Cobb, 103 N. Y. 600 .) If either party had any intention of rescinding, it would have been an affirmative defense, and to be available should have been set up in the answer. (Fitch v. Mayor, etc., 88 N. Y. 500 .) This judgment can be sustained as for money had and received by defendant for plaintiff’s use. (N. T. Co. v. Gleason, 77 N. Y. 403 ; Crawford v. W. S. Bank, 100 id. 50; Talbot v. Bank of Rochester, 1 Hill, 295 ; Johnson v. F. N. Bank, 6 Hun, 124 ; People v. Bank of N. A., 75 N. Y. 547 ; Robinson v. C. N. Bank, 86 id. 404; Brooks v. Ball, 18 Johns. 337 .)