Goshen Nat. Bank v. State
| Decision Date | 27 February 1894 |
| Citation | 141 N.Y. 379,36 N.E. 316 |
| Parties | GOSHEN NAT. BANK v. STATE. |
| Court | New York Court of Appeals Court of Appeals |
OPINION TEXT STARTS HERE
Appeal from board of claims.
The Goshen National Bank filed a claim against the state with the board of claims. From an award of nothing, claimant appeals. Affirmed.
Henry Bacon, for appellant.
T. E. Hancock, Atty. Gen., for the State.
In the month of May, 1892, and for several months prior thereto, one William M. Murray was county treasurer of Orange county. He had received the taxes collected from that county for state purposes in January and February, 1892, and had neglected to pay over the amount thereof at the time fixed by law; and on the 5th of May, 1892, the comptroller of the state had demanded payment from him of the balance due for such taxes, which amounted to the sum of $2,567.37. At the time of this demand, Murray was, and for 10 years prior thereto had been, cashier of the claimant bank. For the purpose of paying such taxes, Murray, on the 7th of May, took a blank draft addressed to the Importers' & Traders' National Bank, in the city of New York, filled it up for the above amount, and, making it payable to the order of the comptroller of the state of New York, signed his name to the draft as cashier. The bank had funds in the New York bank upon which the draft was drawn. Murray, then, in response to such demand, forwarded the draft by mail to the comptroller as payment for such taxes. The comptroller received the draft, indorsed it as payable to the order of the state treasurer, who then indorsed it and procured it to be forwarded to the bank upon which it was drawn in New York; and that bank paid the same upon presentation, and on the 9th or 10th of May charged the amount thereof to the Goshen National Bank as the drawer of such draft. The draft was taken by Murray when he filled it up out of a book containing a large number of other blank drafts of the same form, and which were used as occasion demanded, by the claimant, in drawing upon its funds on deposit in the Importers' & Traders' Bank in New York. When Murray drew and signed the draft, he paid no money to the claimant therefor, and made no entry upon its books showing the drawing of the draft, or his use of it; and he had not then, and never has had since, any money to his credit on deposit with the claimant. He was largely insolvent, and a debtor to the bank, at the time, independently of this transaction; and in June, 1892, he absconded, and has ever since remained a defaulter. He kept the fact of his drawing this draft concealed from the other officers of the bank until he absconded, and the fact was unknown until it was discovered in July following. Notice of these facts was then given the comptroller, and he was requested to refund the moneys thus collected by him upon the draft, which he declined to do, stating that he had no power without legislative authority. The officers of the state applied the proceeds of the collection of the draft to the uses of the state, and in payment of its obligations and expenses. There is no claim that the comptroller or any state officer had any actual knowledge of the wrongful acts of the cashier before the comptroller was informed thereof in July, 1892. The board of claims has found that the comptroller received the draft in good faith, and without knowledge that it was issued by Murray wrongfully, or without authority of the claimant. It was also proved on the trial that the cashier had the custody and possession of the blank drafts for the claimant, and that he had the right to sign drafts drawn by the claimant on its corresponding banks, and that he had the right to draw a draft on the corresponding bank of the claimant for himself upon the same terms that he had to draw a draft for a stranger. The claimant upon these facts founds the legal liability of the state to pay back the moneys which it has received as payment of the taxes as above stated. It is alleged that the state was not a holder of the draft for value, inasmuch as it was received upon a precedent debt, and no value was parted with by the state when it received the same. It is also contended that the form of the draft was itself notice that the cashier was using the funds of the bank to pay his individual debt, and as the state had such notice it could not be a bona fide holder of the draft, and was therefore liable to refund the moneys received in payment of it.
1. We think the question as to whether the state was a holder of the draft for value, or not, does not arise in this case. Murray, as county treasurer, was behind in his payment of the taxes due from Orange county to the state. In order to discharge his obligation, he transmits the draft in question. The state, through its officer, receives it, and presents it to the bank upon which it is drawn, and that bank pays it; and the state, having received the money, thereby discharges the obligation of Murray, and the taxes due from Orange county are thereby paid. The transaction is closed, and it cannot be that the drawer of the draft that has thus been paid can open up the whole matter, and claim to recover back the money which the state received in payment of the taxes due it. If the cashier, instead of sending this draft, had taken the money directly from the bank, and paid the same to the state in satisfaction for the amount due for the taxes, I think no one would contend that the bank could recover it back from the state on the ground that the act of the cashier in taking the money was a fraud upon it, or even a felony, and that the state had parted with no value at the time of the receipt of the money. I do not see that in this respect the case is altered by the interposition of the draft, instead of the payment of the money in the first instance. The state receives in good faith (as we must assume on this point) the written direction of the claimant to a third party to pay the money to the state upon demand, and the state makes the demand accordingly, and the money is paid and the debt extinguished. The interposition of the draft makes no...
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