In re Colonial Discount Co.

235 A.D. 870

• Court: Appellate Division of the Supreme Court of the State of New York
• Decided: May 15, 1932
• Status: Published

Opinion

Order denying petitioner’s motion to direct the Superintendent of Banks to pay petitioner a sum stated affirmed, with ten dollars costs and disbursements. The check of the appellant dated December 4, 1931, for $1,012.95, while payable to the order of The Long Beach Trust Company, was sent by the appellant to its creditor, Beach Garage, Inc., and that company indorsed the check and deposited it with The Long Beach Trust Company and was given credit for the amount thereof in its regular bank account in said trust company. The appellant was indebted to Beach Garage, Inc., in the amount of the check, which check discharged that indebtedness. No draft by Beach Garage, Inc., on the appellant was received by the trust company up to the time that the Superintendent of Banks took charge. The reason no draft was drawn by Beach Garage, Inc., on the appellant was because the appellant had paid its debt to Beach Garage, Inc., by the check in question. There was no relation of principal and agent between the appellant and the trust company. There was, however, the relation of debtor and creditor between Beach Garage, Inc., and the trust company. Young, Kapper, Hagarty and Tompkins, JJ., concur; Lazansky, P. J., dissents with the following memorandum: The check was to the order of the trust company and its terms plainly indicate the purpose for which it was to be used. There is no proof whatever that Beach Garage, Inc., had authority to indorse the check and to have it credited by the trust company to its account.