Viets v. Union Nat. Bank of Troy

• Decision Date: 16 March 1886
• Citation: 101 N.Y. 563,5 N.E. 457
• Parties: VIETS v. UNION NAT. BANK OF TROY.
• Court: New York Court of Appeals Court of Appeals

101 N.Y. 563

5 N.E. 457

VIETS

v.UNION NAT. BANK OF TROY.¹

Court of Appeals of New York.

Filed March 16, 1886.

Appeal from order of general term, Third department, affirming a judgment in favor of plaintiff entered in trial of action by the court without a jury.

James Lansing, for appellant.

R. A. Parmenter, for respondent.

MILLER, J.

The controversy in this action arises in reference to certain moneys belonging to one John Banker, deceased, which were deposited with the defendant to the credit of the plaintiff. Previous to this time Banker was the owner of a bond and mortgage of about $6,000 on a farm formerly belonging to him, upon the sale of which the mortgage was executed. This mortgage he sold, and received a check for the amount of the sale. On the nineteenth of February, 1869, the plaintiff, at Banker's request, took this check to the bank, and had it cashed, and from the proceeds paid an overdue note, upon which Banker was indorser, of about $600, gave Banker, when he returned, about $200, and on the same day deposited the balance, $4,867.83, with defendant in his own name. He then, by direction of Banker, and on the same day, drew two checks payable to Banker, one for $3,500 and the other for $1,367, and delivered them to him. On the twenty-second of February these two checks were indorsed by Banker, and delivered to one Ellen M. Houghtaling as part consideration for her promise of marriage with said Banker. On the twenty-third of February proceedings were instituted by David A. Banker, son of John Banker, in the nature of a writ de lunatico inquirendo, to inquire as to the lunacy of said John Banker, and a commission issued directing an inquisition to be held, and by virtue of said inquisition, held March 10th, it was adjudged that Banker was of unsound mind, and incapable of governing himself or managing his property, and had been in such state of lunacy for a period of six months.

Pending the proceedings, an order was made by the court enjoining the bank from paying over to any one the money deposited with it until further order of the court. On the thirty-first of March on order was made confirming the inquisition, and directing the bank to pay over the money deposited to David A. Banker as committee of John Banker, and on the fourteenth of April the defendant, on receiving an indemnity bond, paid over to the committee accordingly. On the sixth of March, 1869, the check for $3,500 was presented to the bank for payment and payment refused, and on the twenty-eighth of August, 1871, the check for $1,367 was likewise presented for payment, and payment refused. On the eighth of March, 1869, John Banker was married to Ellen M. Houghtaling. After the above-named two checks were presented to the bank for payment, and payment refused, Mrs. Banker recovered a judgment against the plaintiff for the amount of the same. Banker died on the fourteenth of September, 1869, and after his decease an action was brought in the supreme court by his committee to set aside his marriage on the ground of his alleged lunacy. On the trial of the action, February 24th, it was found that, at the time of his marriage, March 8, 1869, Banker was not of unsound mind; that after his marriage he had lucid intervals, and in such lucid intervals recognized such marriage by cohabitation and otherwise; and that at the time of his death he was not of sound mind; and judgment was entered in accordance with these findings.

The plaintiff's right to recover in this action does not rest upon the ground that he was the onwer of the money deposited in the bank, or had any absolute title to the same. It clearly did not belong to him; and if this action can be maintained, it must be for the reason that the deposit in his name, with the consent of Banker, and the making and delivery of the checks under the circumstances stated, conferred upon him the right to enforce payment thereof against the bank. As the money in the bank belonged to John Banker, and the deposit was made by his direction, it mattered not that the deposit was made to the plaintiff's individual account, and in an action brought by the principal the bank could not set up a want of privity. Van Alen v. American Nat. Bank, 52 N. Y. 1. We must therefore assume that the money deposited by the plaintiff was the property of John Banker while it remained in the possession of the defendant.

Such being the case, the question arises whether the payment which was made by the bank to the committee, who had been appointed by the supreme court in the proceedings against Banker as a lunatic, was a legal payment which discharged the bank from liability and bars the plaintiff's right to maintain any action for the same. The law makes provision for the appointment of a committee of the personal estate of a lunatic, and vests in such committee the right of possession of the estate, and, after an adjudication of lunacy has been made and confirmed by the court, and a committee of his estate duly appointed and qualified, such committee occupies the same position and fills the same place as the lunatic, in regard to his personal estate and property. He has the same control and possession thereof, and, in all ordinary matters, the right to deal therewith, as the lunatic enjoyed before he was found to be of unsound mind. The committee is the representative of the lunatic in respect to all matters connected with his estate. When, therefore, on the tenth of March, 1869, in proceedings had against John Banker, the regularity of which is not disputed, a judgment of lunacy was obtained against him, and thereupon subsequently a committee appointed to take charge of his personal estate, he (Banker) became divested of all right to control his property in accordance with the findings under the inquisition had. That inquisition determined, not only that he was a lunatic on said tenth day of March, but that he had been such for a space of six months previous. A short time after that, the committee, who had been duly appointed and qualified, applied to the defendant as the representative of Banker, to whom alone the money deposited by the plaintiff belonged, and, exhibiting his authority, demanded payment of the money, and it was paid to him. Banker, who was the owner of the money, had no right to receive it because he had been declared a lunatic, and the committee was the only person whom the law recognized as having authority for such a purpose. Even if it be assumed that there was an equitable right in Mrs. Banker to the money, arising out of the antenuptial contract with her husband, such equity cannot be invoked as against the bank, that had no notice of the same, and in good faith paid the money to the legal representative of the owner thereof. The bank is entitled to protection, for the reason that it paid the money to one who apparently had the right to receive it. If any equitable claim existed in favor of any third party, it could only be prosecuted and enforced in an action against the committee, who had received the money, and not against the bank, in contravention and repudiation of its right to pay, which it had bank, in contravention to one ostensibly vested with lawful authority to receive the same. With this apparent lawful authority presented by the committee to the bank, it was not required to examine and determine the equities of other parties, of which it had no knowledge, to the fund, and it had a right to assume that the committee appointed by the court had full power to act.

It must be conceded that, if the adjudication of lunacy was in force at the time the payment was made, it was a valid and legal payment, and an effectual bar to any claim by the plaintiff or any other person to recover the money of the defendant. Such adjudication, however, is assailed by the respondent's counsel, and it is insisted that the question of lunacy is out of the case, because it was shown that the presumption of lunacy arising from the inquisition in the lunacy proceedings against John Banker had been overcome and wiped out by the subsequent judgment in the equity suit brought by David A. Banker, the committee, against Ellen M. Banker, to declare the marriage contract null and void,...