Moore v. Miller

6 Lans. 396

• Court: New York Supreme Court
• Decided: March 15, 1872
• Status: Published

Opinion

P. Potteb, J.

Since the recent decision in the Court of Appeals, of the greatly mooted question that arose in McNeil v. The Tenth National Bank,m

* it seems to me that we can hardly regard the question arising in this case as an open one. It is claimed that the whole certificate was not transferred, but only $10,000 of it; but the obligations given by Miller in payment clearly imply an entire purchase, and the plaintiff in his evidence shows nothing to the contrary.

We have been furnished the manuscript of the opinion delivered in that case, and I am unable to distinguish the question to be decided in the case at bar from the principle settled in McNeil v. The Tenth National Bank. We may assume that the plaintiff has been greatly defrauded byMiller; in fact, that, by false and fraudulent representations and pretences, Miller obtained from him the possession of the certificate in question ; and that, by his (Miller’s) agreement, he was to return the certificate to the plaintiff if he did not get it cashed within three weeks, and that, by the secret understanding between the plaintiff and Miller, the certificate was not absolutely assigned to Miller, though it was absolute in form ; and further, that Miller did not, in fact, negotiate the certificate within three weeks, according to that agreement; for, so-the jury have found. May, further, we may assume that by reason of Miller’s fraudulent acts he got possession of this certificate, and that plaintiff was entirely innocent in the transaction, and, by reason of Miller’s insolvency, unless he recovers in this action, he will lose his demand of $10,000. The plaintiff does not claim to make his case stronger than this. But we must also assume, from the evidence in the case, prima facie, that the bank, in their negotiation with Miller, acted in like good faith, and with like integrity and innocence, and that if the plaintiff recover against them, they would suffer in like amount by the fraud of Miller. It would then be a contest between two innocent parties, in which one must of necessity suffer. It then becomes a question of law, which of these two innocent parties must bear the loss. Is it he who puts in motion the instrumentality, the apparent agency which occasions the loss, or he who with confidence advances his means, relying upon the integrity "of the transaction, and makes the advance upon the faith of it 1 By well-established rules of law, clearly the latter. Mor is this inconsistent with that other and well-conceded rule, that in regard to the title of property, other than negotiable commercial paper, the grantee obtains no better title than his grantor had, as was held in Ballard v. Burchard (40 N. Y., 314.) The case before us is an exception to, or rather, perhaps, is distinguishable from that case, by an additional featurc connected with it. In the case before us, the plaintiff, as grantor, executed to Miller, one of the defendants, a conveyance, by an instrument in writing, under his own hand, purporting to he for a valuable consideration, the certificate in question; thus, apparently, conveying away from himself all title thereto. This conveyance, in legal effect, clothed Miller with the apparent power of absolute alienation; and under this apparent power, Miller, with like apparent consideration, conveyed the said certificate to the defendant, The Metropolitan National Bank, parties who were innocent strangers to the secret understanding between the plaintiff and Miller. As it turns out, this certificate was obtained from the plaintiff by a gross fraud and false representations on the part of Miller as to his solvency. There was also a secret understanding between Miller and the plaintiff, that the sale was conditional, and not absolute. True, as between the plaintiff and Miller, the certificate so obtained, while it remained between them, carried no title to Miller, because the fraud which avoided the contract could be given in evidence, notwithstanding the absolute nature of the transfer upon its face; but when the plaintiff, by his own voluntary act, clothed Miller with the solemn evidences of title, the absolute power of sale and all the indicia of ownership, including the possession, for the very purpose of allowing him to make a transfer of this certificate, he also thereby authorized, if he did not invite, the bank, and all other persons who chose to put confidence in this instrumentality or agency, to make the purchase. (Pickering v. Bush, 15 East. R., 41, 42, &c.) And, if made in good faith, the title so obtained is preferred, in law, to the title claimed through the secret understanding between the plaintiff and Miller. (Saltus v. Everett, 20 Wend., 267, 268; Mowry v. Walsh, 8 Cow., 238; Root v. French, 13 Wend., 570.) But further discussion of this question is unnecessary, as I think. The case of McNeil v. Tenth National Bank (supra), in the Court of Appeals, has reconciled what had been before regarded as a different doctrine in other reported cases, especially that in Ballard v. Burgett, and overrules the same case of McNeil v. Tenth National Bank, reported in 55 Barb., 59. Controlled by the decision of the last entitled case, in the Court of Appeals, and adopting the distinctions so ably and clearly presented therein between that and the cases supposed to have been in conflict, I am clear that the judgment is right, and should be aflirmed, with costs.

Judgment aflirmed.

See 46 N. Y., 325.