Gerard v. McCormick

Decision Date01 December 1891
Citation29 N.E. 115,130 N.Y. 261
PartiesGERARD et al. v. McCORMICK.
CourtNew York Court of Appeals Court of Appeals

OPINION TEXT STARTS HERE

Appeal from common pleas of New York city and county, general term. Affirmed.

Action by Sarah M. Gerard and others against James McCormick. Plaintiffs obtained a verdict and an order denying a motion for a new trial, which were affirmed by the general term. Defendant appeals.

The other facts fully appear in the following statement by FOLLETT, C. J.:

The action was brought to recover $501.25, money received by the defendant September 19, 1882, alleged to belong to the plaintiffs. For many years the piaintiffs have owned Nos. 87 and 89 Wall street, New York, known as ‘Glass Buildings.’ From 1872 to February, 1887. William Boswell was the agent of the plaintiffs, having authority to collect and deposit the sums received for rents in the Corn Exchange Bank to the credit of an account kept in the name of William Boswell, Agent Glass Buildings,’ and to draw therefrom sums due for repairs, insurance, taxes, interest on incumbrances, his own commissions, and for the usual expenses of such buildings, and then to divide by checks on the account the remainder among the plaintiffs, according to their respective interests. The checks drawn against this account were signed, William Boswell, Agt. Glass Buildings.’ August 31, 1882, William Boswell borrowed $500 of the defendant upon securities deposited as collateral, and on the 19th of September, 1882, he paid the loan, amounting, with interest, to $501.25, by the following check: ‘No. ___. New York, Sept. 19th, 1882. Corn Exchange Bank, pay to the order of James McCormick five hundred and one 25 dollars. WILLIAM BOSWELL, Agt. Glass Buildings. $501.25.’ Upon receiving thecheck the defendant surrendered to Boswell the collateral pledged as security for the loan, and thereupon the check was thus indorsed: JAMES McCORMICK For deposit to the credit of James McCormick & Co. Per JOHN C. FINK, Atty.’ Thereafter the check was paid by the Corn Exchange Bank pursuant to the above order indorsed thereon, and charged to the account of William Boswell, Agt. Glass Buildings.’ In 1887 the plaintiffs learned that Boswell had from time to time appropriated large sums of money arising from the rents to his own use. The appropriations were made by drawing checks for his own benefit, like the one given to the defendant, and by neglecting to keep down the taxes and interest, which he reported to the owners as paid. After Boswell's frauds were discovered, this action was begun, September 5, 1888, to recover from the defendant the sum received by him by this check. The defenses interposed were (1) that the money secured by means of it did not belong to the plaintiffs; (2) that the defendant received it for value, in good faith, and without notice of the plaintiffs' rights, if any they had. When the plaintiffs rested, and against at the close of the evidence, the defendant asked the court to dismiss the complaint, on the grounds, among others, that the evidence was insufficient to authorize the jury to find that the money received belonged to the plaintiffs, and was insufficient to authorize them to find that the defendants had knowledge that the check was drawn against money belonging to the plaintiffs. The motion was denied, and an exception taken. The questions were submitted to the jury under instructions which are not contained in the case, and must have been satisfactory to both parties. A verdict was found for the plaintiffs, on which a judgment was entered, which was affirmed by the general term, and from that judgment the defendant appealed to this court.

Samuel Fleischman, for appellant.

H. Kettell, for respondents.

FOLLETT, C. J., ( after stating the facts.)

The evidence was abundant to authorize the jury to find that the amount standing to the credit of William Boswell, Agt. Glass Buildings' in the Corn Exchange Bank belonged to the plaintiffs, and that by means or the check the sum represented by it was, by the fraud of Boswell, withdrawn from the account, and paid to and received by the defendant. The remaining question is whether the evidence authorized the court to submit to the jury the question of good faith, or was sufficient to authorize the jury to find that the defendant had notice that the check was drawn against an account not owned by Boswell. The defendant testified, and his evidence was not disputed, that he received the check from Boswell in payment of $500 loaned August 31, 1882, and at the same time surrendered securities pledged as collateral to the loan. He was a holder of the check and of the money received by it for value. The defendant also testified that he took the check in good faith, and there is nothing in the case which tends to raise any question about his personal good faith, except that he received a check from Boswell in payment of his individual debt, signed William Boswell, Agt. Glass Buildings,’ without inquiry as to the right of Boswell to so use the fund. The learned counsel for the appellant cites Ford v. Bank, 13 Wkly. Dig. 352, affirmed, 88 N. Y. 672, as decisive of the case at bar. That case arose out of the following facts: An account was kept by C. F. Norton, Agt.,’ with the defendant bank, whose cashier knew that it belonged to some principal, whose name was to him unknown, for whom Norton was acting as agent. Norton, being indebted to the bank, drew his check, signed C. F. Norton, Agt.,’ in its favor on this account for $1,000. The check was charged to the account, and the sum represented by it applied on Norton's debt. When Norton's principal learned of this misappropriation he sued the...

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