10 N.Y. 68, Weisser's Adm'rs v. Denison

Citation10 N.Y. 68
Party NameWEISSER'S Administrators v. DENISON, President of the North River Bank.
Case DateApril 01, 1854
CourtNew York Court of Appeals

Page 68

10 N.Y. 68

WEISSER'S Administrators

v.

DENISON, President of the North River Bank.

New York Court of Appeal

April 1, 1854

Page 69

[Copyrighted Material Omitted]

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COUNSEL

N. Hill, Jr., for the appellant.

I. The court below held that the judgment entered at the special term was erroneous, and yet refused to grant a new trial. This was wrong, the judgment being entire as to the damages, and the question arising on bill of exceptions.

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  1. It is only where a judgment is for distinct or different things, e. g., damages and costs, that a court has power to sever it on error or bill of exceptions. ( Sheldon v. Quinlen, 5 Hill, 441; Dixon v. Pierce, 1 Root, 138; Welles v. Fowler, Kirby, 236; Richards v. Walton, 12 John., 434; Bradshaw v. Callighan, 8 John., 558, 565, 6; Frederick v. Lookup, 4 Burr., 2018; Davis v. Campbell, 1 Ired., 482.) 2. The Code has not changed the former rule on this subject, so far as the right to sever entire damages on appeal is concerned. (Code of 1849, § § 12, 330; Voorhies' Code, § § 12, 330, ed. 1853; Sheldon v. Quinlen, supra.) 3. Even if a severance of entire damages was allowable, the record furnished no means of distinguishing between the different items, and, as there was conceded error, the judgment should have been reversed in toto. (Cases cited supra.)

II. The plaintiffs are not entitled to recover the amount of the twenty-one checks, nor interest thereon, by reason of Weisser's neglecting to examine them and to return them to the bank after they had been charged to him on account in his bank pass-book, and sent to him therewith from the bank, and opportunity had by examination and comparison to detect the forgeries. Weisser had knowledge, or the means of acquiring knowledge, whether any of such checks so charged and returned were forgeries. He adopted them as his own by neglecting either to return them to the bank or to notify the bank that they were forgeries. A payment made on general account to a party in mercantile paper (notes or checks), purporting to be drawn by such party, which paper is received by him as cash, though afterwards discovered to be forged, is a good payment. ( U. S. Bank v. Bank of Georgia, 10 Wheat., 333, and cases cited; Gloucester Bank v. Salem Bank, 17 Mass., 33.)

III. Even if Weisser was ignorant of Harlin's fraud, he is liable for it, and should bear the loss occasioned by it, because it arose from Weisser's entrusting Harlin with his business at the bank, and employing Harlin to act there for him and

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in his stead. Employment in such cases is not only the evidence of the authority, but the authority itself; and if one of two innocent parties must suffer by the fraud of a third, he who enables that third person to commit the fraud should be the sufferer. (Smith's Mercantile Law, 111, 133; Barber v. Gingell, 3 Esp. Cas., 60; Haughton v. Ewbank, 4 Camp., 88; Watkins v. Vince, 2 Stark., 368; Dunlap's Paley's Agency, 172.)

IV. The balancing and returning the bank pass-book with the checks, by the bank, and their being kept without objection by Weisser, was a settlement or stating of accounts between them, which cannot be opened on the ground of mistake, because made through Weisser's negligence; and he cannot set up his own negligence to the injury of another to excuse a mistake so as to open an account. ( Skyring v. Greenwood, 4 Barn. & Cress., 281; Philips v. Belden, 2Edw. Ch. R., 1.)

V. An authority may be presumed from employment, and adoption may be by mere acquiescence or silence. ( Lawrence v. Taylor, 5 Hill, 114; Ward v. Evans, 2Salk., 442; S. C., 2 Raym., 928; Williams v. Mitchell, 17 Mass., 98; Story on Agency, § § 234-260.)

Edward Sandford for the respondents.

I. The plaintiffs were not precluded from recovering the amount of money deposited by Weisser with the defendant, for which the defendant delivered to Harlin nineteen forged checks on the 19th of May, 1848. 1. It was not proved on the trial by whom these nineteen checks were forged. The only issue of fact which the defendant made respecting them was, whether they were not severally signed by Weisser. 2. If the evidence justified the assumption that these forgeries were committed by Harlin, the book-keeper and bank clerk of Weisser, they were crimes committed by him for which Weisser was not responsible. ( Vanderbilt v. Richmond

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Turnpike Company, 2 Comst., 479; Paley on Agency [Dunlap], 303, 306; Schmidt v. Blood, 9 Wend., 268, 271.) 3. Harlin, if the forger, had no more authority from Weisser to ratify his crimes than he had to commit them. The concealment of the evidences of his forgeries, by abstracting his forged checks, and reporting to Weisser that the balance was correct, rect, was but a part of and in further execution of his criminal designs. He was not, in any part of this business, doing any act which Weisser had either expressly or impliedly directed him to perform. ( Vanderbilt v. The Richmond Turnpike Company, 2 Comst., 479; Manhattan Company v. Lydig, 4John., 377, 384, 388; McManus v. Crickett, 1 East, 106; Wilson v. Peverly, 2N. Hamp., 548, 550; Foster v. The Essex Bank, 17 Mass., 479, 498, 508, 510, 11.) 4. The ratification of an act, previously unauthorized, must be, in order to bind the principal, with a full knowledge of all the material facts. If they be either suppressed or unknown, the ratification is invalid, because it is founded on mistake or fraud. (Paley on Agency [Dunlap], 172, note 9; Owings v. Hull, 9 Peters, 607; Davidson v. Stanley, 2 Man. & Gr., 721.)

II. Weisser was not chargeable by the bank with the nineteen checks forged by Harlin and paid by the bank, on the ground that the bank had afterwards charged the forged checks in his pass-book, and returned them to Harlin with Weisser's checks, and that he therefore had an opportunity to ascertain their genuineness. 1. If he had been shown each of the checks, and had by mistake admitted at the time that they were genuine, such an admission would be no more than prima facie evidence, and would not have estopped Weisser from afterwards showing them to be forgeries. ( Hall v. Huse, 10 Mass., 40; Salem Bank v. Gloucester Bank, 17 id., 1, 26, 27, 29; Canal Bank v. Bank of Albany, 1Hill, 287, 289; Barber v. Gingell, 3 Esp., 60, 61; Dezell v. Odell, 3Hill, 215; Pickard v. Sears, 6 Adol. & Ell., 469; Leach v. Buchanan, 4 Esp., 226.) 2. Each of the nineteen forged checks was

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paid by the bank, without any authority from or any fault on the part of Weisser, and the bank was liable to him for the money he had deposited and had not withdrawn. It is the duty of the banker to be acquainted with his customers' handwriting, and if he pays upon an order which is not genuine he must suffer. (Hall v. Fuller, 5Barn. & Cress., 750.) 3. The bank had no claim against any person, other than the forger, for the money paid by them on either of the nineteen checks. There were no other parties to either of them. There is no evidence by whom they were presented or to whom they were paid. If paid to any persons other than the forger, the bank had no valid claim to recover back the money so paid from such other persons. ( Price v. Neale, 3 Burr., 1354; Smith v. Mercer, 6 Taunt., 76, 78; U.S. Bank v. The Bank of Georgia, 10 Wheat., 333, 353, 55; Canal Bank v. Bank of Albany, 1 Hill, 287, 89, 90; Goddard v. Merchants' Bank, 4Comst., 147, 149, 152; Bank of Commerce v. Union Bank, 3 Comst., 230, 35.) 4. The bank was guilty of negligence in paying the forged checks. It was incumbent upon them to ascertain that they were genuine before they paid them. They thereby sustained a loss. Weisser had done no act to mislead them. The bank had given an appearance of authenticity to the checks, by their payment, calculated to mislead him, and there is no reason to throw off the loss from one innocent man to another innocent man. (Price v. Neale, supra; Smith v. Mercer, 6 Taunt., 76, 84, 87; Chitty on Bills, 463, 4, ed. of 1839.) 5. The greater negligence being chargeable to the bank, who paid the checks to the perpetrator of the forgery, they cannot retain the money which Weisser deposited with them on the ground of delay in detecting the forgery and giving notice of it, notice having been given as soon as the forgeries were discovered. ( Bank of Commerce v. Union Bank, 3 Comst., 230, 236.) 6. This is not an action to recover back money paid by mistake. It is an action to recover moneys received by defendant, which have never been paid at all. The stated account was mere

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evidence of payment open to explanation, like a receipt or any other admission, which had not changed the position of the parties. ( Manhattan Company v. Lydig, 4 John., 377, 389; Bruce v. Bruce, 5 Taunt., 495; Philips v. Belden, 2 Edw. Ch. R., 1, 14, 18; Brownell v. Brownell, 2 Bro. Ch. C., 62; Kinsman v. Barker, 14 Vesey, 579; Bullock v. Boyd, 2 Edw. Ch. R., 293, 295; Barrow v. Rhinelander, 1 John. Ch. R., 550-557; Perkins v. Hart, 11Wheat., 237, 256; 1 Story Eq. Jur., § § 523, 528, 9.)

ALLEN, J.

The jury, by their verdict, pronounced the checks upon which the money in dispute was paid to be forgeries, and it is not claimed that the intestate, Weisser, after he had personal knowledge of the facts, did any act by which he made them his own. After the forgeries were discovered by him he did not in any manner recognize Harlin, the forger, as his agent for drawing the checks. The original payment of the checks by the bank was in their own wrong, and if paid to an innocent holder the money could not be recovered back. ( Price v. Neale, 3Burr., 1354; Goddard v. Merchants' Bank, 4 Comst., 147; ...

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