Stuyvesant Bank v. National Mechanics' Banking Ass'n

By the Gilbert, J. Court— We are unable to discover any ground upon which we could properly reverse the judgment below. Treating the Merchants’ and Manufacturers’ Bank as the principal in the transaction, there was no valid objection to the defendants demanding and receiving the amounts of the forged checks. The only objection stated is, that the defendants being the drawees of the forged checks, are presumed to know the signature of the drawer; and [202] that having received the cheeks through the clearing house and charged them to the account of their customers, whose names liad been forged, they were precluded from making such demand. The answer to this is, that it is at least doubtful whether the facts make out a payment of the forged checks, within the meaning of the rule referred to, or whether that rule can properly be applied to a case like. this. The only facts making out a payment to the Merchants’ and Manufacturers’ Bank occurred at the clearing house, and consisted in charging the defendants and crediting the Merchants’ and Manufacturers’ Bank with the checks. -And this was done under a rule assented to by both parties, giving the right to the defendants to return the cheeks to the Merchants’ and Manufacturers Bank on the same day they received them from the clearing house, and requiring that on being so returned, the Merchants’ and Manufacturers’ Bank should refund the amount thereof to the defendants. The only departure from the rule thus established was, that the checks were not returned on the same day. The question, therefore, was one fairly open to dispute. But, if .not, surely it was competent for the Merchants’ and Manufacturers’ Bank to waive the delay in returning the cheeks. And even if such waiver was induced by the defendants’ threatened refusal to make further exchanges with them, it is none the less effectual; for the defendants might, without assigning any reason, break off such exchanges. There was nothing coercive or compulsory, therefore, in their insisting upon the amount of the forged checks being refunded as a condition of continuing such exchanges. The subsequent conduct of the Merchants’ and Manufacturers’ Bank is .proof that they did not act under compulsion, and in. legal effect is a complete affirmance of the transaction. We see no reason why the Merchants’ and Manufacturers’ Bank should be treated otherwise than as principals. They received the checks deposited with them by the plaintiff, and passed them to the credit of the latter. The account seems to have been kept in the usual mode in which accounts are [203] kept between a bank and its customers. The general rule certainly is that money or checks paid into a bank cease to belong to the person paying them in, and become the property of the bank. (Foley v. Hill, 2 H. L. Cas., 36.) We perceive nothing in the nature of the dealings between the plaintiff and the Merchants’ and Manufacturers’ Bank to take them out of this general rule. If these views are correct they had nothing to assign to the plaintiff. But even if, as is contended by the plaintiff, the Merchants’ and Manufacturers’ Bank acted as their agents merely, and they acted without actual authority in refunding the amount of the forged checks to the defendants, that fact would create no right of action against the defendants in favor of the plaintiff, but would, at most, render the Merchants’ and Manufacturers’ Bank'liable to the plaintiff. As between the defendants and the Merchants’ and Manufacturers Bank, the latter, from the nature of the dealings and under the rules of the clearing house, could be treated as principals only. The plaintiff having assented that such should be the nature of the agency, thereby conferred upon the agent, as far as third persons are concerned, authority to do in the premises whatsoever they themselves might do. (Story Ag., 60, 106.) For these reasons the judgment appealed from must be affirmed, with costs. Leonard, J. The Manufacturers’ and Merchants’ Bank voluntarily paid the check for $4,309 to the defendants upon request, without any objections, and that sum was thereby removed from any further reasonable controversy. The defendants retained the first three checks for so long a time after the presentation and settlement at the clearing house that it became quite probable, that the defendants could not maintain a claim to have the amount repaid, but that cóndi-' tian of the case was changed by the subsequent transactions. The mere passing of the checks through the clearing house from one bank to the other did not affect their respective rights, if immediate action had been taken to notify the bank [204] from which the check had been received of the error or wrong committed. But the plaintiff retained the checks for many days after they had been returned by the defendants to the Manufacturers’ and Merchants’ Bank, and by the latter bank charged and returned to the plaintiff’s bank. This must be regarded as a voluntary payment or as operating to that effect by acquiescence or ratification. Eeither the Manufacturers’ and Merchants’ Bank nor the plaintiff’s bank notified the defendants’ bank after the return of the checks by the defendants’ bank through the clearing house within the time allowed by the rules of the clearing house that they did not intend to be bound as upon a payment of that amount to the defendants, nor did they assert their rights, if they had any, in due season to entitle them to be relieved from the presumption that the transaction was to be regarded as voluntary. There is no fact in the ease to support an argument that the payment was obtained by coercion. The exceptions of the plaintiff must be overruled and judgment ordered for the defendants. Judgment affirmed.