Holtsinger v. National Corn Exchange Bank

6 Abb. Pr. 292, 37 How. Pr. 203

• Court: The Superior Court of New York City
• Decided: January 15, 1869
• Status: Published

Opinion

By the Court. Monell, J.

Without examining the ground upon which the referee has placed his decision, namely, that the power of attorney to Green & White was void, under section 1 of the act of Congress of February 26, 1853, and therefore the defendant acquired no title to the drafts, I am so well- satisfied there is another ground, fatal to the defense, that, without inquiring into the correctness of the reason given by the referee, we must affirm his decision, upon the well-established rule that the court will not reverse a correct judgment, merely because an insufficient or incorrect reason may have been assigned for it.

The only claim of title to the drafts asserted -by the defendants was derived through the indorsement of the payee’s name by ‘ R. Green, Jr., under a power of attorney to Green & White.

It was admitted on the trial, by the defendants, that the indorsement of the plaintiff’s name on the drafts was not in the handwriting of the plaintiff, but was in the handwriting of Richard Green, Jr. ; and that the only authority he had to indorse the name of the plaintiff was contained in the power of attorney.

This admission must be deemed to conclude the defendant upon the facts of the case.

Upon those facts an objection might be taken that a power exercised by one only of two joint attorneys, was not sufficient to pass title to the drafts to the defendant.

The general rule is, that where an authority is given to two or more persons to do an act, the act is valid to bind the principal only when all of them concur in doing it (Story on Agency, § 42, and cases cited). In respect to real property, it is made the subject of a public statute (1 Rev. Stat., 735, § 112) ; and in respect to other things it is a well-understood principle of the common law. In the case of Green v. Miller (6 Johns., 39), it was held that, in a parol submission to jive arbitrators, all must join in the award. It is there said that in a delegation of power for a mere private purpose, it is necessary for all to concur. In matters of public concern a different rule prevails. That decision was before the statute (2 Rev. Stat., 542, § 7), which somewhat changed the common law rule (Paley on Agency [Lloyd], 177, and cases cited). In this case, however, the letter of attorney was to two persons in their copartnership name, and it may be that the signature of one of the partners of his own name, and not of the name of his firm, was a sufficient execution of the power. But as the court do not fully concur on that point, and it is not necessary to the decision, it is left undecided.

The important question is, Did the power of attorney give any authority to the attorneys to indorse tíre drafts ?

The express power is, “to ask, demand, receive and receipt for any and all pay and allowances due me from the government of the United States, on account, &c., and to sign my name to any receipt, payroll, voucher, or other acquittance of such dues; . . . with full

power to execute and deliver all needful instruments and paper’s, and to perform all and every act and thing whatsoever requisite and necessary to be done in and about the premises,” with the usual clause ratifying and confirming the acts of the attorneys.

It will be seen that the letter of attorney does not in express terms grant any power to indorse the plaintiff’s name upon any draft; and unless such power can he derived from those parts of the instrument which confer what may be called general power, it nowhere exists.

The case of Hogg v. Smith (1 Taunt., 347), was very similar to this case. The plaintiff, by power of attorney, constituted one English, his attorney, to “ask, demand, recover and receive, from the commissioners of his Majesty’s navy, all such salary, wages, &c., as there was or thereafter should be due to him, for his services in any of his Majesty’s ships, . . and acquittances, releases and other discharges” in his name to make, with the usual clause of general ratification and of general power in the premises. English received from the commissioners of his Majesty’s navy, on account of the plaintiff, two bills, payable to the plaintiff’s order. English indorsed the drafts in the plaintiff’s name, and negotiated them to the defendant. The action was trover, and it was held that the authority was strictly confined to receiving the debt; that the attorney, by receiving the bills, performed all that he was authorized to do, and ought to have kept them in his possession for the plaintiff:

The case of Hay v. Goldsmidt (cited by Lawrence, J., in Hogg v. Smith, supra), was also similar. There was a power Of attorney to ask, demand and receive from the East India Company all moneys that might be due, &c., and to transact all business, with the usual general power and clause of ratification. The attorney received an India bill, payable to the plaintiff’s order, indorsed it in his name, procured it to be discounted by the defendants, who received of the India Company the money due on the bill. The action was to recover the money, and the court was of opinion that the instrument gave no authority to the attorney to indorse the bill, and that the words “ all business ” must be confined to all business necessary for the receipt of the money.

In Gardner v. Baillie (6 T. R., 591), the attorney had accepted a bill for and in the name of the defendant as executrix, for a debt due to the plaintiff from the de-, fendant’s testator. The letter of attorney authorized her attorney to “ adjust and settle all accounts, differences, &c.,” wherein she;, as executrix, was interested ; and for her and in her name, as executrix, to execute assignments of mortgages, receipts, releases, &c. ; to pay all debts due from her as executrix, and 61generally to do all such further acts for recovering debts and discharging the power given by the letter.” It was held that there was no authority to accept the bill. In Rossiter v. Rossiter (8 Wend., 494), a promissory note was made by an attorney, in the name of his principal, to release certain pledged property. The letter, after giving special powers to the attorney, also empowered him “ to accomplish, at his discretion, a complete adjustment of all the concerns of Pynchon, and to do any and every act in his name which he could do in person.” The court held that the attorney was a special agent; that the letter specified what business he was to transact, and that the general authority “to accomplish, at his discretion,” &c., conferred no power that did not relate to the business previously mentioned. The cases of Hogg v. Smith and Hay v. Groldsmidt were cited and approved.

The general rule for the interpretation of this species of written instruments is, that language, however general in its form, when used in connection with a particular subject-matter, will be presumed to be used in subordination to such matter, and will be limited accordingly. Such instruments are always subjected to a strict interpretation, and will not be extended beyond that which is given in terms, or which is necessary and proper for carrying the authority so given into effect (Ferreira v. Depew, 17 How. Pr., 418).

The cases I have cited are sufficient to show that the general words in a letter of attorney cannot be construed to extend or enlarge the power beyond the subject-matter of the agency, as expressed in the previous parts of the letter.

There being therefore no express authority to indorse the drafts, none can be implied from other parts of the letter.

The defendants being without legal title to the drafts, acquired no title to the money received upon them, and I can see no objection to the maintenance of an action by the payee for its recovery.

In Hogg v. Smith {supra) the action was trover, to recover for the conversion of the bills; and in Hay v. Groldsmidt {supra), for the recovery of the amount of money received on the bill. In each case the action was against a person to whom the bills had been transferred for value.

In this case the defendants were the collecting agents of their depositor, had parted with no value, and were, in fact, the mere custodians of the money, having no interest whatever, which, under other circumstances, it might, perhaps, ask to have protected.

But, if the English cases were not sufficient to sustain this judgment, one or two in our own courts can be brought to their aid.

In the case of Canal Bank v. Bank of Albany (1 Hill, 287), a draft drawn by the plaintiff was sent to the defendant for collection, with the payee’s name forged, and they received the money. It was held that the defendant was bound to refund to the drawees who had paid the draft. '

A similar case is Coggill v. American Exchange Bank (1 N. Y [1 Comst.], 113), where the payment by the drawee's was also after a forged indorsement, and the amount was recovered (and see Goddard v. Merchants’ Bank, 4 N. Y. [4 Comst.], 147).

In each of these cases the defendant was the collecting agent, and received the money on account of its immediate correspondent and indorser ; and they are cited to show that the mere agency of the defendant in the matter, did not protect them from an action for money which they had received without legal authority from the payee of the drafts.

The principle decided in Easton v. Clark (35 N. Y, 225), is, I think, also applicable to this case. It is, that property disposed of by a factor, in a manner not within the scope of his authority, may be reclaimed by the owner, on the ground that no title passes, either in replevin or trover, or he may waive the tort and recover the proceeds of the sale.

It not appearing in this case that the defendant has paid over to its depositor the money received on the drafts, it must be assumed that it remains in their hands, and therefore it is a matter of indifference to them which party receives it.

I have reached the conclusion in this case that the defense is unsound with some reluctance, inasmuch as the points I have considered were not much discussed on the argument; but the reasons I have stated are founded wholly on facts which cannot be changed ; and the most that can be complained of, is, that the appellants have not had another opportunity to argue them.

I am of opinion that the judgment should be affirmed.

Fithian, J.

The cause of action in this case is, that defendants, having innocently, but without authority or assent of the owner, become possessed of the plaintiff’s property (the drafts in suit); and having, through the unauthorized use of plaintiff’s name, converted the same into money, which they refused to pay to plaintiff, the law gives the latter a right of action as for money had and received to his use. I think the action is clearly maintainable in such a case.

I concur in the opinion of the court affirming the judgment in this case, on the ground solely that the power of attorney is not sufficiently broad and comprehensive to authorize the attorney to sign or indorse the plaintiff’s name to any bill, draft, or note. The attorney was a special agent for one single purpose, and when he had received and receipted for the drafts or “warrants” specified, he 'had executed his power, and his authority as agent terminated. He held the drafts precisely as he would have held money if he had received that instead of the "bills from the United States officer, viz : as the property of plaintiff, with no power or right of disposition whatever, save to pay over to the plaintiff.

On the question whether in this case the power of attorney could be legally executed by one of the two joint attorneys alone, I express no opinion.

The grounds upon which we put our decision in this case renders it unnecessary to inquire whether the power' of attorney was void by reason of its not being executed within the time required by the act of Congress of February 26, 1853.

However, as the referee based his decision solely on that ground, and the question was much discussed on the argument, it may not be inappropriate to state briefly my conclusions on that subject. I am of opinion that the provisions of the statute above mentioned are not intended to apply to all powers of attorney, but only to such as are irrevocable, and work an assignment to the attorney, of an interest in the claim or its proceeds ; or, in other words, powers coupled with an interest—for it is such only that are within the mischief sought to be remedied (6 Op. Att.-Gen., 60); and that a simple power or authority to an agent to collect and receive money on a demand against the government, in which the agent has no interest whatever, is not within the provisions of section 1 of the act of 1853, provided it be executed in accordance with the requirements of the act of 1846 on that subject. I am also of opinion that as to such powers as are void under the provisions of the act of 1853, they are so only as between the claimant and the government ; that is, the officers of the government are authorized to disregard the power, and treat it as a void instrument.

If, however, the officers of the United States choose to so far recognize the power as to pay over to the agent money or property on account of the claim, the claimant has his election to repudiate the act as no lawful payment, and still assert his claim, or he may ratify the act of payment, and pursue Ms money into the hands of his agent, or other persons to whom the agent may have delivered the same. If he does the latter, he is subject to and bound by all and every power of disposition or interference with the fund which he may have given, and wMch is valid at common law. The United States statute was not intended to affirm or avoid contracts between citizens, except so far as it affects the relations of the government with its citizens.

Had the power of attorney in this case been sufficient at common law to authorize the agent to indorse bills, the judgment must have been reversed. As it is, judgment .is affirmed.

Jones, J., concurred.