Case ID: ad_143/html/0165-01.html
Source: Caselaw Access Project
Author: {"author": "Carr, J.:", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Louis Burstein and Others, Respondents, v. The People’s Trust Company, Appellant.
    Second Department,
    February 24, 1911.
    Bills and notes — partnership — conversion of check by manager — deposit in individual account — liability of bank.
    Where in an action by a copartnership to recover the value of a check alleged to have been converted by the defendant it appears that the check was given in payment for work done for S. by the plaintiffs; that plaintiffs’ manager indorsed it with the firm name, by himself as manager, and then indorsed it individually and deposited it to his own credit in the defendant bank, where plaintiffs had no account, and there is no evidence that the manager had authority to indorse checks for the plaintiffs, or that when defendant took the check it had been led by them to suppose that he had such power, a judgment for the plaintiffs will be affirmed.
    
      Appeal by the defendant, The People’s Trust Oompany, from a judgment of the Municipal Court of the city of Mew York, borough of Brooklyn, in favor of the plaintiffs, rendered on October 28,1910.
    
      Clarence Sage Woodman, for the appellant.
    
      Charles Burstein, for the respondents.
   Carr, J.:

The defendant appeals from a judgment of the Municipal Court in the borough of Brooklyn in favor of the plaintiffs for seventy-eight dollars and six cents. The action was brought by the plaintiffs to recover the value of a check alleged to have been converted by the defendant. The plaintiffs were copartners doing business under the trade name of “ The Peerless Garage.” One Dr. Sullivan had some repair work done on his automobile by the plaintiffs at the said garage. He received a bill from the plaintiffs for sixty-three dollars for the work done. He drew his check on the People’s Trust Company for sixty-three dollars and made it to “ The Peerless Garage ” as payee. He delivered this check to one Melle, who was the manager in charge of the garage. The plaintiffs had no account with the defendant nor any dealings with it, but Melle had an individual account with the defendant, and indorsed the check, partly by a rubber stamp and partly in writing, “ Peerless Garage, by Max Melle, Mgr.” Underneath this indorsement he indorsed the check individually. He took the check to the defendant arid deposited it to his individual account. The plaintiffs never got any of the proceeds of the check. They have sued Dr. Sullivan for the amount of the bill and obtained judgment against him. This judgment was reversed on appeal in this court. ' (Burstein v. Sullivan, 134 App. Div. 623.)

After proceeding against Sullivan unsuccessfully they then began an action against this defendant on the theory that its act of receiving the check from Melle constituted a conversion thereof. In the record before the court on this appeal it appears that Melle had authority to receive cash or checks in payment of bills rendered for services done by the plaintiffs. There is no proof that he had. any authority to indorse checks after their receipt. There is no proof that at the time the defendant took this check in question it had ever been led by the plaintiffs to suppose that Melle had any power to indorse checks, in fact there is no connection in any way between the plaintiffs and the defendant except that of the particular transaction which forms the basis of this suit. I do not see how this case is to be distinguished from Schmidt v. Garfield Nat. Bank (64 Hun, 298; affd., 138 N. Y. 631) and Robinson v. Chemical Nat. Bank (86 id. 404).

There is in the opinion of this court in Burstein v. Sullivan some language upon which the appellant relies for a reversal of this judgment. The language in question is declared by Miller, J., to be obiter, and not at all necessary to the decision of the case, and it is plainly so. This language intimates that, .under the facts then before the court, the bank might not be held liable in a suit by the plaintiffs. The present record is not the same as the record which was then before the court. The expression of opinion by Miller, J., is based upon assumed facts which do not appear in this present record.

I recommend that the judgment be affirmed, with costs.

Jenks, P. J., Burr, Woodward and Rich, JJ., concurred.

Judgment of the Municipal Court affirmed, with costs.