Sims v. United States Trust Co. of New York

• Decision Date: 23 November 1886
• Citation: 9 N.E. 605,103 N.Y. 472
• Parties: SIMS, Ex'r, v. UNITED STATES TRUST CO. OF NEW YORK.
• Court: New York Court of Appeals Court of Appeals

103 N.Y. 472

9 N.E. 605

SIMS, Ex'r,

v.UNITED STATES TRUST CO. OF NEW YORK.

Court of Appeals of New York.

November 23, 1886.

Wm. A. W. Stewart, for appellant.

J. Alfred Davenport, for respondent.

RUGER, C. J.

On the fifteenth of November, 1882, the plaintiff's testator, J. Marion Sims, delivered to one Crowell his check on the People's Bank of the City of New York, payable to the order of the defendant, for $5,000, with verbal directions to deposit the same to his credit with the defendant. Instead of doing as directed, Crowell delivered the check to the defendant; but requested and received from it a certificate of deposit payable to himself, as trustee for Dr. Sims, and shortly thereafter drew the money thereon, and converted it to his own use. The defendant collected the money from the People's Bank upon Dr. Sims' check, and the main question in the case is whether it had authority to make the payment it did to Crowell. It claims to have acted in so doing upon the strength of an alleged custom among banks authorizing such a payment. Upon the trial, however, the proof in relation to such custom was conflicting, and the question as to its existence was submitted to the jury, and found against the defendant's claim.

Upon the transaction, with this feature eliminated, there would seem to be no doubt of the defendant's liability. The check, upon its face, imported the ownership of the moneys represented in it by Dr. Sims, and his desire that its custody should be transferred from the People's Bank to the defendant. This certainly did not warrant the defendant in supposing that Dr. Sims thereby intended to pay $5,000 to Crowell, or place him, for any purpose, in possession of the fund. If he had so intended, the check would have been made payable to Crowell's order, and there would have been no need of the agency of the defendant in the transaction. The use of the defendant's name as payee of the check indicated the drawer's intention to lodge the moneys in its custody, and place them under its control, and nothing further than this was inferable from the language of the check. The check, by its terms, authorized the defendant to withdraw from the People's Bank a certain sum, for a purpose not disclosed, but fairly inferable from the nature of the defendant's business.

The defendant could have refused to receive the deposit, or act as Dr. Sims' agent in transferring the funds from one custodian to another, but, having accepted the office of so doing, it was bound to keep Dr. Sims' moneys until it received his directions to pay them out. The language of the check making the funds payable only upon the order of the defendant imposed upon it the duty of seeing that they were not, through its agency, improperly disbursed after it had received them. They could not safely pay out such funds except under the direction of their lawful owner. This they have never received, unless the proof hereafter referred to shows such authority.

On the trial the defendant offered in evidence a power of attorney from Dr. Sims to Crowell, which, so far as appears, had always remained in the custody of the People's Bank, and never came to the knowledge of the defendant until after the transactions in question. This evidence was objected to by the plaintiff, and excluded by the court, to which ruling the defendant excepted. This exception presents the principal question in the case. The power of attorney read as follows:

‘Know all men by these presents, that I. J. Marion Sims, of the city of New York, have made, constituted, appointed, and by these presents do make, constitute, and appoint, Gilbert L. Crowell, of the same place, my true and lawful attorney, for me, and in my name, place, and stead, to collect and receive all sums of money now due, or hereafter to become due, to me, whether from rents, accounts, bonds, and mortgages, or otherwise, and, upon payment thereof, to give good and sufficient receipts or other discharges therefor. Also to transact all my ordinary bank business at the People's Bank, in the city of New York, to draw checks on said bank, and to indorse checks, promissory notes, drafts, and bills of exchange for collection or deposit. This power of attorney to remain in force until said bank is notified of its revocation, giving and granting unto my said attorney full power and authority to do and perform all and every act and thing whatsoever, requisite and necessary to be done in and about the premises, as fully, to all intents and purposes, as I might or could do if personally present, with full power of revocation; hereby ratifying and confirming all that my said attorney, or his substitute, shall lawfully do, or cause to be done, by witness hereof.

‘In witness whereof I have hereunto set my hand and seal the fifth day of April, 1870.

J. MARION SIMS. [L. S.]

[50-cent internal revenue stamp.]

‘Sealed and delivered in the presence of

‘CHARLES S. BUSHNELL.’

We are of the opinion that the exception was not well taken. At the time of this transaction Crowell made no claim of acting as the general agent of Sims, and the defendant had no reason to suppose that he was acting in such a capacity. It dealt with him solely upon the faith of the apparent authority inferable from his possession of the check, and, if it was mistaken in supposing that that fact gave him authority to dispose of the fund, there is no reason, in equity or justice, why it should not be held to the consequences of its error. Assuming, for the present, that the power of attorney gave Crowell authority in fact to withdraw the deposit...