National Park Bank of New York v. American Exchange National Bank

Giegerich, J. The action was brought to recover two sums of forty dollars each, being the respective amounts of two checks, one to the order of the Lincoln Insurance & Banking Company, and the other to the order of the Commercial Fire Insurance Company, paid by the plaintiff to the defendant through the clearing-house [673] upon indorsements alleged to have been fraudulent or unauthorized. The indorsement in each case took the following form — first the name of the corporation stamped across the back of the check, then the written words “ Rothschild & Co. Agts.” followed by the written signature “ Henry Y. Miller ” and finally these words stamped on, “ Pay Mechanics’ Trust Company or order, Henry Y. Miller.” The question is whether Miller had authority to make the first two indorsements. Evidence on behalf of the plaintiff was offered in the form of depositions taken without the State. The deposition of Jacob Eothschild showed that the firm of Eothschild & Co., doing business in Philadelphia, and of which he was a member, was the general agent of both the insurance companies in question, the one a corporation of Indiana and the other of Delaware; that this firm issued the policies and collected the premiums thereon for both companies, under a written authority the terms of which he refused to disclose on the ground that it was of a private nature; that his firm had authorized no one except one Charles 0. Block to indorse the firm name or the name of either corporation on any checks made payable to the respective corporations; that he had one partner, James E. Wilson; that Henry Y. Miller “ bore no relation whatever ” to him or to his firm or to either corporation. The evidence contained in the other depositions need not now be referred to. Miller, called on behalf of the defendant, testified that he was .a partner in the firm of Eothschild & Wilson; that the copartnership business was the control of insurance companies; that the firm owned both the corporations in question, which had no assets, and the officers of which were their clerks; that he represented the companies in Hew York and Hew Jersey; that twenty-five per •cent, of the premiums received was paid to canvassers and brokers and for expenses, and the balance, after paying losses, was divided between him and Rothschild and Wilson; that he collected the premiums on the policies issued by or through him, indorsed such premium checks, put them through his bank and, after paying the commissions and other expenses, gave or sent the balance to Rothschild. There was also put in evidence a letter from Rothschild & Co. to C. S. Atkinson & Co. of New York, dated June 13, 1901, more than a month before the transactions in suit, returning a check to the order of the Commercial Fire Insurance Company, with. [674] emphatic directions to' send it to Miller, through whom the policy in payment of the premium on which the check was given had been obtained. Rothschild claimed that this was done as a mere matter of bookkeeping so that Miller’s account could be more easily kept, and that the check should have later been forwarded by Miller to his firm, whereas Miller testified that this was only in the regular course of their dealing, and a 'single transaction of a thousand where he had received and indorsed and put through his own bank such checks. This check, which bore indorsements similar to one of those in suit, was offered in evidence but excluded on the objection that it was immaterial and irrelevant. Other similar attempts were made to put in evidence facts that would tend to show an authority in Miller to make such indorsements by reason of an established course of dealing. Miller’s claim that he was a partner in the firm was corroborated by the testimony of three apparently disinterested witnesses, attorneys of this city, who testified that Rothschild admitted in their presence and Miller’s that the latter was his partner. In view of Miller’s charge that the corporations were mere forms- or names through which Rothschild & Co. did business, and the refusal of Jacob Rothschild to make full disclosure of the relations existing between the firm and these companies on the ground that such relations were of a “ private nature,” and of his sweeping denial that Miller “ bore any relation whatever ” to him or his-firm, or to either of the companies, although the undisputed facts-show that he certainly did bear an important relation, and in view of the corroboration Miller received from different sources, I am constrained to take a contrary view of the weight of evidence from that of the justice below. Since a new trial must be had, it may be of some service to point out that though the exact extent of the authority of Rothschild & Co. is not disclosed, still it is shown that they had power to authorize others to indorse checks with the companies’ names, as in the case of Block, testified to by Rothschild. That being the foot, such authority could be conferred upon Miller by a Ion-' course of dealing, as well as by express permission. Marine Bank v. Clements, 31 N. Y. 33; Hammond v. Varian, 54 id. 398. It will, therefore, be proper and desirable, the testimony bom - so e-.nfiicting, that upon the new trial a full exposition be nvuk of the established course of business between Miller and Rothschild & Co. and the companies, if they exist in a proper sense, and he had any dealings with them. [675] The judgment should be reversed and a new trial ordered, with costs to the appellant to abide the event. Gildersleeve, J., concurs; Freedman, P. J., taking no part. Judgment reversed and new trial ordered, with costs to appellant to abide event.