Robinson v. . Chemical National Bank

86 N.Y. 404, 1881 N.Y. LEXIS 229

• Court: New York Court of Appeals
• Decided: October 11, 1881
• Status: Published

Opinion

Earl, J.

We have carefully read the evidence in this case, and we cannot say that any of the findings of facts by the referee are wholly unsupported by it. His findings were reviewed at the General Term, and were there sustained, and they therefore conclude us. The following facts must therefore be taken as conclusively established. In and prior to 1869, Harriet Douglass Gruger and Thomas M. Beare were the trustees under the last will and testament of Margaret Douglass, deceased, and as such had the charge and control of the building No. 7 Pine street in the city of New York, and also of other property. In 1868 they rented that building to Muller, Wilkins & Co., and on the 1st day of November, 1869, there was due from them to the trustees, their lessors, for rent the sum of $3,250. Beare was the acting trustee, having the exclusive management of the trust estate. He employed as his clerk and agent for the collection of rents and for other matters one H. K. Leonard. On the 16th day of November, 1869, Leonard, acting as such agent, called upon Muller, Wilkins & Co. for the rent and they gave him a check for the amount, then overdue, on the Manhattan Company, payable to the order of' Thomas M. Beare. Leonard indorsed the check as follows: “ Pay to the order H. K. Leonard, Thomas M. Beare per H. K. Leonard, attorney for deposit, Chemical National Bank. H. K. Leonard.” And on the 24th day of November he deposited the check in the-Chemical National Bank, and it certified thereon that the indorsement was correct, and collected the amount thereof of the Manhattan Company and placed it to the individual credit of Leonard, who subsequently checked out the same for his own use. Beare died on the "same 24th day of November. Leon ard had no authority to indorse or use the check or its proceeds, and the bank had no right or authority as against Beare or the trustees to take, collect and appropriate the proceeds of the check.

The authority which Leonard had as agent to collect the rent and transact other business for Beare gave him no legal authority to indorse this check, and his indorsement thereof was just as ineffectual to pass any title as if he had forged Beare’s name. (1 Parsons on Contracts [6th ed.], 62; Hogg v. Snaith, 1 Taunt. 347; Graham v. United States Savings Institution, 46 Mo. 186; Holtsinger v. The National Corn Exchange Bank, 6 Abb. Pr. [N. S.] 292; Thomson v. Bank of British N. A., 82 N. Y. 1-10.) The rule as derived from these authorities is well expressed by Prof. Parsons, as follows: “ An agent’s acts in making or transferring negotiable paper (especially if by indorsement) are much restrained. It seems that they can be authorized only by express and direct authority, or by some express power which necessarily implies these acts, because the power cannot be executed without them.”

Although this check was made payable to the order of Beare it in fact belonged to the trustees. Beare, in taking it, acted for the trustees and not in his own right. The moment it was taken it became a part of the trust estate. The drawers thereof, if charged upon non-payment of the check, by proper demand and notice could have heen sued thereon in the name of both trustees. These plaintiffs, therefore, the successors of-.Mrs. Cruger and of Beare, have sufficient title for the maintenance of this action. That an action for conversion will lie in such a case has never been doubted. (Talbot v. Bank of Rochester, 1 Hill, 295; Johnson v. First National Bank of Hoboken, 6 Hun, 124; Boyce v. Brockway, 31 N. Y. 490.)

The able opinion pronounced at the General Term makes a more exhaustive consideration of this case at this time unnecessary.

The judgment should be affirmed.

All concur, except Finch, J., not voting.

Judgment affirmed.