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Hutchinson v. President & Directors of the Manhattan Co.

60 N.Y. St. Rep. 612 Court N.Y. Super. Ct. English

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p. 612
Lucius B. Hutchinson, Resp’t, v. The President and Directors of the Manhattan Company et al., App’lts.
(New York Superior Court, General Term,
Filed June, 1894.)

Headnote

Bills and notes—Collection—Credit.
Where a collecting agent deposits a check belonging to his'principal with a bank, it has not the right arbitrarily,to credit the proceeds on a past due obligation of the agent on the ground that he was a depositor with it.
Appeal by defendant from judgment entered on report of referee in favor of plaintiff.
Storn & Rushmore, for app’lts ; John L. Branch, for resp’t.

The check was drawn upon a Massachusetts bank, and deposited for collection by W. L. Patton & Co., who had undertaken its collection for the plaintiff. The check belonged to the plaintiff, and the proceeds when collected were his. McBride v. Farmers' Bank, 26 N. Y. 450 . There is nothing in the recent case of the Goshen Nat. Bank v. State, 141 N. Y. 379 ; 57 St. Rep. 597 ; 36 N. E. R. 316, nor in Justh v. Nat. Bank, 56 N. Y. 478 ; Stephens v. Board, 70 N. Y. 185 , 187; Southwick v. First Nat. Bank, 84 N. Y. 420 , 436, 437, which sustains the defendant’s contention that it had the right arbitrarily to credit the plaintiff’s money on the past due obligations of W. L. Patton & Co. because that firm was a depositor with it. In those cases both the party delivering and the one receiving the money or check acted with the avowed and understood purpose of discharging the pre existing obligation; and their mutual intention having been effectuated by the necessary acts, the court held that the title passed and the

p. 613
money had been lawfully applied.' Those controlling features are not only significantly absent here, but contrary intentions appear. The arbitrary application of the plaintiff’s money was not only repugnant to the trust upon which Patton & Co. and the defendant received the check, but contrary to the proclaimed intention of all the other parties in interest. There was no implied authority in the defendant to make the appropriation, and no equitable rule of-conduct, estoppel or set-off which gave it title to the money of the plaintiff against the will of those having the jus disponendi, particularly where it appears, as it does here, that the defendant gave nothing for the money, and its former position will not be changed if required to give it up. For these reasons and those assigned by the learned referee, the judgment appealed from must be affirmed, with costs.

All concur.

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