Porges v. United States Mortgage & Trust Co.

Hoyt’s action in depositing the check, but gave no notice to defendant until she commenced this action on or about October 17, 1907. The jury in answer to specific questions put to them by the court found that plaintiff did not exercise due diligence in notifying the defendant, and that in consequence of her silence it was damaged to the extent of $500. The verdict, directed by the court, was for $4,000 with interest, less the $500 damage suffered by defendant. In considering the questions involved in this appeal, it is desirable to keep in mind the fact, strongly insisted upon by plaintiff, that this is an action only for the conversion of the check, and not one to recover its proceeds. The only question, therefore, is as to Hoyt’s authority to deposit the check to his own account with defendant. Whether or not he was so empowered depends upon the extent of the authority given him by the power of attorney upon which .defendant relies. It reads as follows:

“April 25, 1907. For and in consideration of one dollar, to me in hand paid, the receipt whereof is hereby acknowledged, T, Julia W. Forges, individually and as executrix of the late John H. Forges, do hereby authorize Adelbert E. Hoyt to dispose of my property No. 218 and 220 West 21st street, borough of Manhattan, city of New York, at such price and under such conditions as he may see fit and to accept either cash or other property, or both, and take any property subject to existing encumbrances (if any) on said property so taken in exchange, and I hereby give to said Hoyt my full power of attorney to sign contracts and to execute any and all papers in connection therewith and also full authority to sign, sell and manage any property so accepted in exchange and to pay out any necessary money in settlement of interest, taxes, water, salaries or other bills' of court costs and commissions for the sale of any of said properties, the same as if I did so myself, it being understood that the said 21st street property is now under foreclosure, and money must be. paid in settlement in order to deliver deed of same, and that I shall lose my entire equity in same unless said Hoyt can effect some sale or exchange whereby some benefit may accrue, and therefore I give unconditional and unlimited authority to him to do anything he deems advisable with said property, and any money that must be paid in excess of what may or may not be received in said transaction I will pay to him in cash when called upon without accounting or defense of any character.

“(The following in pencil: Irrevocable under any condition.)

“[Signed] Julia W. Forges.

“Witness:

“Mary W. Lillie.”

It would be difficult to draw a more general and comprehensive power than this so far as concerns the selling of plaintiff’s property and disposing of the proceeds. Hoyt was not only authorized to dispose of the property, but he was authorized to accept in payment "either cash or other property or both,” and to sign, sell, and manage any property so accepted in exchange, and “to pay out all necessary money in settlement of interest, taxes, water, salaries, or other bills of court costs and commissions.” The power expressly recognizes and recites that:

“The said 21st street property is now under foreclosure and money must be paid in settlement in order to deliver deed of the same.”

Thus authority was given to Hoyt in express terms to accept cash in settlement of whatever sale he was able to effect, and undoubtedly the purchasers would have been protected if they had given him cash, or a check to his order, as Duff did. It is also perfectly clear that it

was plaintiff’s intention that Hoyt should use in the first place and so far as it would go whatever money was received upon the transaction to' pay the charges upon her property; for her agreement was that “any money that must be paid in excess of what may or may not be received in said transaction, I will pay him in cash when called unon.” Thus the authority given to Hoyt was to sell or dispose of the Twenty-First street property; to accept in payment cash or other property; to sell the property so received, with the proceeds of the sale to pay off the incumbrances, and, if such proceeds were insufficient, to receive the excess from plaintiff. It is true that the power did not in express terms authorize Hoyt to indorse checks drawn to plaintiff’s order, but this we think was necessarily involved. If Van Sant had given Hoyt cash, as he might have done under the power, Hoyt might have deposited -it in any bank in his own name. The check was simply a token representing cash. Hoyt had authority to use the cash derived from the transaction, and we think had likewise authority to convert the check into cash, which was the practical effect of depositing it. In fact, in so doing he was carrying out exactly what plaintiff authorized him to do, and intended that he should do. It is not always necessary that explicit authority must be given an agent to justify his indorsement of a check or bill drawn to his principal’s order. An agent who is employed to procure a note to be discounted may indorse it in the name of his employer, or he may, unless expressly restricted, indorse it in his own name and claim indemnity of his principal. Nelson v. Hudson R. R. Co., 48 N. Y. 498 . And the power to make and indorse negotiable instruments may be implied as a necessary incident of powers expressly conferred, as where an entire business or an entire transaction is intrusted to the agent, and it becomes necessary to make o.r indorse negotiable paper in order to effectually carry out the agency. Whitten v. Bank of Fincastle, 100 Va. 546 , 43 S. E. 309 ; Gould v. Bowen, 36 Iowa, 77 ; Gate City Building & Loan Company v. Nat. Bank of Commerce, 136 Mo. 82 , 28 S. W. 633 , 37 L. R. A. 401 , 47 Am. St. Rep. 633 . We are of opinion, therefore, that the broad and unlimited power given to Hoyt authorized him not only to receive cash on a transfer of the property, but to convert into cash a check given on the transfer, even although that check was made payable to plaintiff. If so, he was entitled to deposit the check, and defendant was not guilty of a conversion in receiving it and placing the proceeds to Hoyt’s individual credit. The fraud which Hoyt perpetrated on plaintiff was in his subsequent misappropriation of the money, if he did misappropriate this particular sum, and in his obtaining from plaintiff subsequently a large payment under false representations. For these frauds, defendant is not responsible.

The judgment appealed from must be reversed, and a new trial granted, with costs toi appellant to abide the event.

MCLAUGHLIN and HOUGHTON, JJ„ concur. INGRAHAM and CLARKE, JJ., dissent.