Craigie v. Hadley

• Decision Date: 05 May 1885
• Citation: 99 N.Y. 131,1 N.E. 537
• Parties: CRAIGIE and others v. HADLEY, Receiver, etc.
• Court: New York Court of Appeals Court of Appeals

99 N.Y. 131

1 N.E. 537

CRAIGIE and others

v.HADLEY, Receiver, etc.

Court of Appeals of New York.

Filed May 5, 1885.

Richard Crowley, for appellant, Sterling G. Hadley, receiver, etc.

Sherman S. Rogers, for respondents, John Craigie and others.

ANDREWS, J.

The general doctrine that upon a deposit being made by a customer in a bank in the ordinary course of business, of money, or of drafts or checks received and credited as money, the title to the money, or to the drafts or checks, is immediataly vested in and becomes the property of the bank, is not open to question. Commercial Bank of Albany v. Hughes, 17 Wend. 94;Metropolitan Nat. Bank v. Loyd, 90 N. Y. 530. The transaction in legal effect is a transfer of the money, or drafts or checks, as the case may be, by the customer to the bank, upon an implied contract on the part of the latter to repay the amount of the deposit upon the checks of the depositor. The bank acquires title to the money, or drafts or checks, on an implied agreement to pay an equivalent consideration when called upon by the depositor in the usual course of business. The further rule that one who has been induced to part with his property by the fraud of another, under guise of a contract, may, upon discovery of the fraud, rescind the contract and reclaim the property, unless it has come to the possession of a bona fide holder, is equally well settled, and does not at all depend upon the character of the wrong-doer, whether a corporation or a natural person.

A corporation may be, in a legal sense, guilty of a fraud. As a merely legal entity it can have no will, and cannot act at all, but in its relation to the public it is represented by its officers and agents, and their fraud, in the course of the corporate dealings, is in law the fraud of the corporation. There is more difficulty in establishing a fraud against a corporation than against an individual. This arises from the difficulty, in many cases, of determining whether the fraud charged is imputable to the corporation. There may be knowledge of a fact by an agent of a corporation which, if brought home to the corporation itself, would create responsibility in a given case, but as to which notice will not be imputed to the corporation merely from the fact that it was known by the agent. We need not enter into the distinctions upon this subject. But the general rule is well established that notice to an agent of a bank, or other corporation intrusted with the management of its business, or of a particular branch of its business, is notice to the corporation, in transactions conducted by such agent, acting for the corporation, within the scope of his authority, whether the knowledge of such agent was acquired in the course of the particular dealing, or on some prior occasion. Holden v. New York & Erie Bank, 72 N. Y. 286;Bank of U. S. v. Davis, 2 Hill, 452.

The drafts, for the proceeds of which this action is brought, amounting to $14,793.37, were deposited by the plaintiffs in the usual...