National City Bank v. Westcott — 29 N.Y. St. Rep. 806

Majority

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The National City Bank of Brooklyn, Resp’t, v. Robert E. Westcott, as President of Westcott Express Co., App’lt.^[1]

(Court of Appeals, Second Division,

Filed February 25, 1890.)

Headnote

1. Bills and notes—Raised check—Liability of agent collecting money on—Money paid by mistake.

The Westcott Express Co. took for collection from the IT. Y. & Boston Despatch Express Co. a check upon plaintiff for $660, drawn hy one Yon Deilen, one of plaintiff’s depositors, and Dixon, the agent for the defendant, endorsed his name upon the check, and it was paid to him. It had been raised from a check of six dollars and the payee’s name changed, and plaintiff demanded its repayment hy defendant. Held, that defendant

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represented the N Y. & B. Despatch Express Co., as their agent, merely for the collection of the money, and not as the apparent owner of the check, and having, prior to the discovery of the fraud, handed over the money to the company, was not liable to the plaintiff as for money paid by mistake.

2. Same—Agency.

The endorsement of Dixon, without the word “ agent” attached, under the circumstances, was in behalf of defendant merely for the purpose of collecting the money, and did not guarantee the genuineness of the check.

Appeal from judgment ot the general term of the supreme court in the second judicial department, affirming judgment entered on a verdict in favor of the plaintiff.

On November 19, 1884, the New York & Boston Despatch Express Company handed to the defendant company for collection a check purporting to have been drawn by H. Yon Deilen, on the plaintiff, of which the following is a co¡iy:

“Brooklyn, Nov. 15, 1884. “ National City Bank of Brooklyn : “ Pay to Samuel T. Allen or order six hundred and sixty dol“$660. H. Yon Deilen. “ Endorsed, Samuel T. Allen. “ For collection New York & Boston Despatch Express Company. A. J. Dunlap, Gen. Agent."

On the same day George W. Dixon, who was the agent of the defendant company, endorsed his name upon the check, presented it to the plaintiff, and received the amount of it. And thereupon the money was delivered to the New York & Boston Despatch Express Company, which received it, and on November 27th, at Philadelphia, paid the money to the party from whom it had received the check. In February following the plaintiff asceitained that the check so presented was not genuine, but that Yon Deilen, the drawer, had on November 13th given to a stranger a check drawn upon the plaintiff for six dollars, payable to Mrs. J. W. Smith or order; and that it had been so feloniously altered as to produce the check first above set forth. As soon as the discovery was made the plaintiff demanded of the defendant re-payment of the amount so paid, which was refused. This action was brought to recover it.

Charles A. Da Costa, for app’lt; Edgar Bergen, for resp’t.

The case as presented by the evidence was at the trial treated by the counsellor the parties as presenting a question of law only. The request for direction of a verdict for the defendant was refused, and the court directed a verdict for the plaintiff, and exceptions were taken. So that if in, any view which may be taken of it, the evidence is sufficient to support the verdict, the recovery must be sustained. Dillon v. Cockcroft, 90 N. Y., 649 .

In the presentation of the check to the plaintiff for payment, and in paying it, the parties acted in good faith, and upon the

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assumption that it was in all respects genuine. The drawer of it, was one of the plaintiff’s depositors, and had been such for considerable time. The signature to the check was his, signed to one-drawn by him, and which had been raised in amount from $6 to-$660, and the name of another payee inserted in it. This fraudulent alteration was not discovered until nearly three months after the time the payment was made. In the meantime the money had been paid over to the person who had placed it with the N. Y. &• B. D. Express Go. for.collection.

The payment was made hy the plaintiff upon a mistake of fact-as to the character of the check; and money paid under such circumstances may be recovered back from the party to whom payment is made. If the Westcott Express Company had been or had assumed to be the apparent owner of the check when it was presented to and paid by the plaintiff, the defendant would have been liable to reimburse the plaintiff. Canal Bank v. Bank of Albany, 1 Hill, 287 ; Bank of Commerce v. Union Bank, 3 N. Y., 230 ; Corn Exchange Bank v. Nassau Bank, 91 id., 74.

But in the present case the check was in fact sent to the defendant company for collection, of which the plaintiff was advised by the endorsement upon it to that effect, made by the N. Y. &. B. D. Express Co. The defendant, therefore, apparently, and in fact, represented that company, and in the relation of such agency received the money from the plaintiff. Montgomery Co. Bank v. Albany City Bank, 7 N. Y., 459 . And prior to the time of the-discovery of the fraudulent character of the check, having handed the money over to the company from which it was so received for collection, the defendant was not liable to the plaintiff as for-money paid by mistake. National Park Bank v. Seaboard Bank, 114 N. Y., 28 ; 22 N. Y. State Rep., 160. It is, however, contended that the defendant was endorser of the check, and became-chargeable as such. And to establish the fact that the defendant did endorse it, reference is made to the pleadings. The complaint, alleged that the “ check so altered, changed and raised, and properly endorsed, was presented ón or about the 19th day of November, 1884, by George W. Dixon, as agent of said Westcott Express. Company.”

And the defendant by the answer “admits the allegations that, the check referred to in said complaint * * * properly endorsed, was presented to said plaintiff for payment on or about the 19th day of November, 1884, by George W. Dixon, as agent of the said Westcott Express Company.” This admission in its import is no broader than those allegations of the complaint, and they do not charge that the company endorsed the check, and they are entitled to such construction only, in favor of the plaintiff, as-the language used fairly requires. Slocum v. Clark, 2 Hill, 475 ; Clark v. Dillon, 97 N. Y., 370 . That the check, properly endorsed, was presented to the plaintiff by Dixon as the agent of the defendant company, does not necessarily furnish the inference of endorsement by the company.

Bnt it is urged that inasmuch as Dixon was the agent of the company, and presented the check as such for payment, his en

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dorsement must or may be that of his principal. He endorsed his name upon it without any thing to indicate that he made it •other than individually. It may be that if he had added the word agent to his name, it' may have been properly shown to have been done by him as such agent, and the endorsement treated as that of his company upon evidence being given of his authority to make it. Hicks v. Hinde, 9 Barb., 528 ; Babcock v. Beman, 11 N. Y., 200 ; Bank of Genesee v. Patchin Bank, 19 id., 312 .

Nothing appears in any manner upon the paper characterizing the endorsement of Dixon as made in a representative capacity, or his purpose to so make it, and it would be unduly extending the rule to charge another party in such case as endorser of commercial paper. Mills v. Hunt, 20 Wend., 431 ; Booth v. Bierce, 40 Barb., 114 ; Briggs v. Partridge, 64 N. Y., 363 . This view has relation only to the situation produced by the act of making such an endorsement, and without any reference to the effect of an adoption of the act by the principal as against the latter. The endorsement by the New York & Boston Despatch Express Company, appearing by its terms to have been made for the purpose of the collection of the check, the defendant assumed the relation of agency in receiving it and obtaining the money and transmitting it to such endorser.

The restrictive endorsement denied to the defendant the apparent title, and rendered the check non-negotiable, of which the plaintiff was advised by the restriction appearing by the terms of the endorsement. The defendant company took no title to it, and could transfer none. The right of the defendant as the correspondent or agent of the other company, was to present the check to the plaintiff and receive the money. Sigourney v. Lloyd, 8 Barn. & C., 622; Hook v. Pratt, 78 N. Y., 37 ; White v. National Bank, 102 U. S., 658 . There was, therefore, no implied authority in Dixon, as the agent of the defendant company, to represent it in the transaction beyond what was requisite to the performance of the agency assumed by it, or was legitimately within its purpose. This imposed upon the defendant neither the duty to endorse the check, or to guarantee its genuineness. Nor does it appear that Dixon as such agent had any special authority to do either, or any authority in that respect other than such as arose from his relation of agency. A different case would have been presented if the defendant company, through its agent, had received the money in its own right, or apparently so, from the plaintiff. Then, with or without endorsement, the defendant may have been treated as warranting the genuineness of the check and as liable to the latter for the amount. White v. Continental Nat. Bank, 64 N. Y., 316 , 320; Susquehanna Valley Bank, v. Loomis, 85 id., 207, 211.

The cases cited by the plaintiff’s counsel, and upon which he relies to support in this respect the recovery, were those in which the implication was permitted that the party presenting paper and receiving payment was the lawful holder having title. The doctrine of -guaranty and liability in such case is firmly settled, but for the reasons before suggested it is not applicable to the present case.

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Ho other question seems to require consideration.

The judgment should he reversed and a new trial granted, costs to abide the event.

All concur.