Cardozo v. Fawcett, 23727.

• Court: Supreme Court of Minnesota (US)
• Citation: 158 Minn. 57,196 N.W. 809
• Docket Number: No. 23727.,23727.
• Parties: CARDOZO v. FAWCETT.
• Decision Date: 18 January 1924

158 Minn. 57
196 N.W. 809

CARDOZO
v.
FAWCETT.

No. 23727.

Supreme Court of Minnesota.

Jan. 18, 1924.

Appeal from District Court, Ramsey County; J. C. Michael, Judge.

Action by P. N. Cardozo against W. H. Fawcett. From an order denying a motion for a new trial, defendant appeals. Affirmed.

Syllabus by the Court

County warrants drawn on a special fund and indorsed by the treasurer, ‘Not paid for want of funds,’ are not negotiable instruments.

Where such warrants, indorsed in blank by the payee, are sold to a person who thereafter places them in the hands of an agent for collection, and such agent, instead of collecting them, wrongfully sells them to a good-faith purchaser, the owner may recover them from such purchaser.

Although the indorsement of the payee made them transferable by delivery, merely intrusting them to an agent for collection is not such conduct on the part of the owner as will estop him from reclaiming them from a purchaser from such agent.

[196 N.W. 810]

L. O. Rue and Chas. F. Kelly, both of Minneapolis, for appellant.

Ambrose Tighe and O. H. O'Neill, both of St. Paul, for respondent.

TAYLOR, C.

Action in replevin to recover possession of two auditor's warrants drawn by the auditor of Cass county on the treasurer of that county-one for the sum of $1,000, the other for the sum of $2,000. The warrants were issued October 19, 1921, and directed the treasurer to pay the amounts thereof to the order of L. & L. Construction Company and charge to a designated special road fund, ‘If there is money in the treasury for that purpose.’ A clause inserted in the warrants indicated that the claim had seen assigned to the Citizens' State Bank of Kelliher. On October 21, 1921, the treasurer indorsed upon the warrants, ‘Presented for payment and not paid for want of funds.’ Shortly thereafter they were indorsed in blank, without recourse, by the bank and by the Construction Company, and became the property of Stevens & Co., a corporation engaged in the business of buying and selling securities. In November, 1921, Stevens & Co. sold and delivered them to plaintiff, who took them without any other or further indorsement than above stated. On February 18, 1922, Stevens & Co. wrote plaintiff that the warrants had been called for payment and offered to collect them for him from the county. Plaintiff, through his broker, sent the warrants to Stevens & Co. with instructions to send them to the county for payment and remit the proceeds to him. On February 23, 1922, Stevens & Co. sold the warrants to defendant, who purchased them for full value believing that Stevens & Co. owned them. On the same day Stevens & Co. sent plaintiff their check for the amount of the warrants which plaintiff deposited for credit to his account. A few days later the check was returned by the bank on which it was drawn unpaid for want of funds. Shortly thereafter Stevens & Co. was adjudged a bankrupt. Plaintiff filed a claim for the amount of the check in the bankruptcy proceedings. Learning thereafter that the warrants had not been called for payment by the county, and that Stevens & Co. had not sent them to the county officials nor collected them, but had sold them to defendant, plaintiff demanded the warrants from defendant and brought this action to recover possession of them. The court directed the jury to determine whether plaintiff had delivered the warrants to Stevens 3 Co. solely for the purpose of collection, whether he was negligent in delivering them to Stevens & Co., indorsed as above stated and with no other indorsements...