Page images
PDF
EPUB

Nolan v. Bank of New York National Banking Association.

The clerk will, of course, now adjust the plaintiffs' costs and insert them in the entry of judgment. Costs of but one motion are allowed. (a)

[SARATOGA SPECIAL TERM, April 15, 1873. Bockes, Justice.]

(a) On appeal the above opinion was adopted, and the decision affirmed by the General Term in the Third Department, and the decision of the latter court was affirmed by the Court of Appeals. (See 55 N. Y., 673 S. C.)

LOUISE J. NOLAN vs. THE BANK OF NEW YORK NATIONAL BANKING ASSOCIATION.

A check, dated Jan. 21, 1865, was drawn by M. & Sons, payable to their own order, upon the defendant, and indorsed by the drawers. It was, on or about that date, accepted by the drawee, certified to be "good," and registered. On the 4th of February, 1865, the check while in the hands of M. & G., was stolen from their book-keeper. Notice of the theft was given to the bank, or payment of it stopped, on the same day. In May or June, 1865, the plaintiff became the owner and holder of the check, paying value for it, and taking it in a legitimate manner, as an investment, after making all the inquiries which it was incumbent upon her to make.

Held, 1. That if the signatures to the check and certificate were genuine, the plaintiff was not bound, by anything appearing upon the face of it, to exercise any other caution, vigilance or diligence, so far. as the bank was concerned.

2. That the check was not to be deemed dishonored, like a promissory note payable on demand, from the delay in presenting it for payment, but on the contrary, was paid by the drawers, by an absolute appropriation of their funds to meet it, which the bank held for the transferee, whoever he might be. 8. That the certificate was to be regarded as an acceptance, payable on demand, and was obligatory until paid, or the statute of limitations should attach as a bar.

4. That the court below erred in deciding that the plaintiff was not entitled to recover upon the check, against the bank because the same was, in judgment of law, dishonored.

5. That the check having been stolen, it became the duty of the plaintiff to establish that she was a bona fide holder for value; and that the refusal of the judge to submit that question to the jury, on the ground that the check was overdue and taken subject to existing equities, was error.

The question of equities between any of the prior parties to a certified check cannot intervene against a bona fide holder for value. He deals upon the paper alone, looking to the bank as the primary debtor.

Nolan v. Bank of New York National Banking Association.

THIS action was

HIS action was brought to recover the amount of a check for $5,000, dated New York, January 21, 1865, payable in gold, drawn by Morgan & Sons, on the Bank of New York, payable to their own order, and which was accepted by the bank and certified to be good, and so put in circulation. The bank afterwards reorganized as a national bank under the name as above entitled; and the new association continued the business and assumed the liabilities of the old corporation, the Bank of New York. This check, it was claimed, was not intended either by the drawers or the drawee to be immediately paid, as it was accepted by the drawee and certified to be good, and so went out into the world.

At that time, and long afterwards, such checks drawn on that bank, payable in gold, and registered as this was, were circulated and used by the mercantile community as gold, and were thus kept in circulation a long time. In May, 1868, the plaintiff in this case, living at New Orleans, and having money to invest, in perfect good faith, and after making inquiry as to the genuineness and value of the check, and exhibiting it, or causing it to be exhibited to bankers and correspondents of the drawers and others, purchased it, giving full value for it. It was soon afterwards presented to the bank (the defendant) for payment, and payment was refused; and in this action the defence was that on or about the 4th of February, 1865, while the firm of Myer & Greve were owners of the check, it was lost by or stolen from a clerk of theirs. And that afterwards Myer & Greve having indemnified the bank, the bank paid the amount to them, and defend this suit for their benefit.

At the trial the court directed a verdict for the defendant, and ordered the exceptions to be heard in the first instance at the General Term.

The plaintiff appealed from the judgment, and upon a case and exceptions moved for a new trial.

Nolan v. Bank of New York National Banking Association.

B. K. Phelps, for the appellant. I. The court having directed a verdict in favor of the defendant, all presumptions and all disputed questions of fact, must, on this hearing, be held in favor of the plaintiff, and the case, on this application for a new trial, must be considered, wherever there is a dispute, as if the facts were as shown by the plaintiff's evidence only. Ward v. C. P. N. & E. R. R. Co., 42 How., 291. Cook v. N. Y. C. R. R. Co., 3 Keyes' Rep., 476. Wells v. Mann, 45 N. Y. Rep., 331. Stone v. Fowler, 47 N. Y. Rep., 566.

II. The check was negotiable, and, according to the evidence, the plaintiff purchased it in good faith, and gave full value for. There was nothing to arouse her suspicions. It was openly offered for sale, the owner refusing to sell it for less than its face. The plaintiff was not bound, before purchasing it, to make any inquiry at all, yet, for the purpose of ascertaining its genuineness and value, she caused it to be exhibited to merchants, bankers, and correspondents of the drawers, before she purchased it, who reported it to be good. If such persons pronounced it good, and knew nothing of its having been lost or stolen, why should she have suspicion. Such being the evidence, the plaintiff was a bona fide purchaser and owner, in good faith; and being such bona fide purchaser and owner, the fact that it had been lost by, or stolen from, a former owner, was no defence. Welsh v. Sage, 47 N. Y. Rep., 143. Magee v. Badger, 34 id., 248. Belmont Branch Bank v. Hoge, 35 id., 65. Turnbull v. Bowyer, 40 id., 456. Birdsall v. Russell, 29 id., 220. Goodman v. Simonds, 20 How. U. S., 343. Seybell v. National Currency Bank, 4 Abbott, N.S., 352. Murray v. Lardner, 2 Wallace, 110. Miller v. Austen, 13 How. U. S., 218. Farmers' & Mech. Bank v. Butch. & Drov. Bank, 16 N. Y., 128. Mead v. Merchants' Bank of Albany, 25 id., 143.

III. On the trial the plaintiffs' counsel offered to show

Nolan v. Bank of New York National Banking Association.

that by the custom of the mercantile community in 1865, 1866, and 1867, such checks on this bank circulated, and were received, transferred, and accepted as gold, and that they were so kept in circulation a long time without being presented for payment. But the court held it irrelevant and incompetent, and excluded the evidence. In this the court erred.

IV. The plaintiff testified that before she bought the check she had possession of it for an hour or two; took it to Mr. Fleming's office, and gave it to him, with instructions to go to the different banks and inquire the worth and value of the check; that Mr. Fleming went out with it, and then sent his book-keeper, Mr. Crane, out with it. Then plaintiff's counsel offered to show what Mr. Fleming and Mr. Crane reported to her as the result of their inquiries, and the defendants' counsel objected, without stating any grounds of the objection, and the objection was sustained. That was error. 1. As no grounds of the objection were stated, it was error to sustain it, if the evidence or fact sought to be proved was material or proper for any purpose. (45 N. Y. Rep., 753. 12 id., 442, 451. 7 Bosworth, 481.) 2. If there was anything about the paper casting suspicion upon it, and if that was material for the defence in the case, it was proper for the plaintiff to repel it, by proving anything said by anybody which did or would naturally have a tendency to remove that suspicion from her mind. It would have been material for the purpose of showing that she was acting honestly and in good faith, which is all that the law requires of a purchaser in such a case. (47 N. Y. Rep., 143. 34 id., 248. 4 Abbott, N.S., 352.) It was not the kind or quality of the evidence that was objected to, but the proof of the fact itself. But, in fact, it was not objectionable for any purpose. If their report would have been favorable (and for this purpose it must be presumed that it would have been,) it would have been proper, even if false.

Nolan v. Bank of New York National Banking Association.

The material fact would be that she was informed (by Fleming & Crane) and believed the check to be good and, therefore, in purchasing it acted honestly and in good faith.

V. The court held, as a matter of law, that the defendant was entitled to a verdict, and refused to submit any question to the jury, and directed a verdict for the defendant, to which, as to all of the other rulings on the trial, the plaintiff's counsel excepted. This ruling was wrong. 1. The evidence in the case shows that the plaintiff purchased the check, which was negotiable, in good faith, and gave full value for it. She, then, and not the defendant, was entitled to recover as a matter of law. 2. If there was any conflict of evidence, or any question about her honesty or good faith in the transaction, it was a question for the jury.

Therefore, in either or any view of the case, the court erred in directing a verdict for the defendant, and a new trial should be granted.

Thos. C. T. Buckley, for the respondent. I. The legal character of a check is not altered by the certification, and the only obligation assumed by the certifying bank is that assumed by the acceptor of a bill of exchange.

II. A check is, in judgment of law, an inland bill of exchange. The definition of the instrument given in the cases and in the treatises is, that it is such an obligation. (Chapman v. White, 2 Seld., 412. Etna National Bank v. The Fourth National Bank, 46 N. Y., 82, Allen, J. Salt Springs Bank v. The Syracuse Savings Institution, 62 Barb., 105. Edwards on Bills, 57. Robson v. Bennett, 2 Taunt., 388. Farm. and Mechs. Bank of Kent Co. v. Butch. and Drov. Bank, 4 Duer, 220; S. C., 14 N. Y., 623; 16 id., 128, 144; 28 id., 426. Mead v. Merch. Bank of Albany, 25 id., 146, 150. Claflin v. Farm. and Citizens' Bank, Id., 294. Smith v. Miller, 43 id.,

« PreviousContinue »