People ex rel. Port Chester Savings Bank v. Cromwell

In the consideration of this appeal the defendant is entitled to have the facts determined in accordance with the° relation thereof contained in his opposing affidavits. The statements of the affidavits are conflicting, and as the relator, notwithstanding that fact, still demanded a peremptory mandamus, it could only be granted upon the assumption that there were no disputed facts. Its action was equivalent to a demurrer to the case presented by the opposing affidavits, and the question thus presented must be determined upon the assumption of their truth. People v. Richards, 99 N. Y., 620 ; People v. Supervisors, etc., 73 id., 175; S. C., 64 id., 600. The facts thus presented are that Masterton & Co. were the legal depositories of the moneys of the county of Westchester applicable to the redemption of its bonded indebtedness, and, before November 1, 1884, had been put in funds by defendant, its county treasurer, to redeem the coupons for interest on its debt maturing on that day. The relator held such coupons, to the amount of upwards of §500, and on November 6, 1884, presented them to Masterton & Co. for payment, and, upon being interrogated as to the manner of payment, stated that it wished a draft for the amount. Thereupon Masterton & Co. delivered to the relator their sight draft upon the National City Bank of New Y ark for the amount thereof, and it surrendered to Masterton & Co. its coupons, which were immediately charged to the defendant’s account as paid, and the coupons were afterwards delivered to the county treasurer. At the time of this transaction Masterton & Co. had on hand cash sufficient to pay the amount of such coupons, and would have paid them in currency but for the election of the relator to take the amount in a draft.

The draft was presented by the relator to the National City Bank, sometime in November thereafter, and was protested for non-acceptance and non-payment; Masterton &

The remedy sought is of doubtful propriety in its application to the circumstances related, and it might well he said that payment of the general indebtedness of a county cannot he enforced by the punishment of its financial officers ; but, as we are of the opinion that the relator has not shown a case entitling him to recover upon the merits, we prefer to dispose of the appeal upon that ground.

The claim of the relator is that the loss occasioned by the insolvency of Masterton & Co. shall be imposed upon the defendant, and enforced by the compulsory process of the court. It is evident that this loss resulted from the voluntary action of the relator in accepting a draft, instead of money, for the obligations of the county then surrendered, and that it thereby intended to discharge its claim upon the county, and to accept in lieu thereof the responsibility of Masterton & Co. This is the plain meaning of the transaction as evidenced by the unequivocal acts of the parties, and it cannot be obscured by supposed analogies to other situations. Masterton & Co. were the special agents of the county to pay their coupons, as a bank is the agent of its depositor to pay his check. If, upon presentation of a check or order, such agent or bank should refuse payment, the debt- remains unpaid; but, if the creditor accepts anything other than legal currency in payment, the" debt is discharged. Crawford v. West Side Bank, 100 N. Y., 50 . The authority of the depository is simple, and limited to the act of making payment; and if the creditor goes further, and deals with it for any other transaction than that of receiving payment, he does so upon his own re sponsibility, and must bear the consequent loss, if any, of such a transaction.

The surrender of the possession of the coupons by the relator was inconsistent with the expectation of any continuance of liability on the part of the county thereon, as it was beyond the power of Masterton & Co. to authorize such an expectation. The county had provided the funds for the payment of its indebtedness; and, if the creditor accepted anything else than cash for its obligations, he was at liberty to do it,' but acted on his own responsibility in so doing. The entire scope of the agency of Masterton & Co.

By the acceptance of the draft, the relator authorized Masterton & Go. to immediately appropriate to their own use so much of the funds provided by the county to pay the coupons in question, and, when such coupons were afterwards delivered to the county, Masterton & Go. became entitled to a credit therefor. It was thus placed beyond the power of the county to reclaim those funds, or hold the bondsmen of Masterton & Go. hable for default of their principal. Masterton & Go. were not parties to the obligations presented, and were under no liability thereon, and their draft was the obligation of a third person accepted in exchange for the coupons surrendered. The defendant had no authority over this transaction, and it was beyond his power to influence or prevent it.

There is little analogy between this case and that of Indig v. National City Bank ( 80 N. Y., 100 ), cited by the relator, and apparently much relied on. There the defendant was an agent of the plaintiff, employed to make collection of a note at a distant point, and was sued for alleged negligence in accepting the draft of its own agent in payment of the collection. The liability depended solely upon the question of negligence. It was held that the collection was made according to the known and customary usages of business, and in accordance with the implied authority conferred upon the agent in transacting such business for its principal. It was further intimated in the case that the plaintiff therein had suffered no loss, as it did not appear that the note had been paid; the maker not having sufficient funds on deposit at the place of payment, at its maturity, to pay it. The implication from this case is quite strong that if the maker had provided funds, as the defendant did here, to pay the obligation, that the transaction would have operated as payment of the note.

This case is similar, in some respects, to that of Smith v. Miller ( 43 N. Y., 171 ), where it was said that “a creditor may so deal with negotiable securities received from his debtor for collection, and to be placed to his credit when paid, as to discharge the debtor from all liability, whether the securities are in fact paid or not. He may make them his own, so as to substitute the parties to the securities as his debtors, in place of his original debtor, by his dealings

The case here presented is also clearly distinguishable from those arising directly between the debtor and creditor. In those cases there is no question as to the power of the debtor to authorize the continuance of his original liability, and in any transaction having in view the payment of his obligation, it is required that it shall be actually paid in order to discharge it, or that something shall be received by the creditor from the debtor under an express agreement that it shall operate as payment.

The case of Turner v. Bank of Fox Lake (42 N. Y. (Keyes), 425), also cited by the relator, is not an authority in its favor. There the creditor sued upon a bill of exchange, of which he had possession, but which had been reclaimed by him after having been once surrendered in exchange for the check of the drawee. After payment of the check had been refused, the holder returned it to the drawee, and received possession of the bill, and caused it to be duly protested for nonpayment. It was held that the bill sued upon was given upon a sufficient consideration. In that case the check of a person liable as a party to the draft had been received in payment, and it was received by an agent for collection, and the question was whether the agent had discharged his duty in making the collection with diligence and fidelity.

Tire order of the general term should, be reversed, and that of the special term, affirmed, with costs.

All concur. _