Case ID: misc_60/html/0109-01.html
Source: Caselaw Access Project
Author: {"author": "Seabury, J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

Harry Kramer et al., Respondents, v. Floyd Grant, Appellant.
    (Supreme Court, Appellate Term,
    July, 1908.)
    Negotiable instruments — Presentment and demand — Necessity of presenting in reasonable time — What is reasonable time —As applied to checks.
    Payment — Mode and sufficiency of payment — Check as payment.
    Where the authorized attorney of a creditor accepts the debtor’s check for the amount of the claim and, instead of presenting the check for payment and collecting it, negotiates it, the payment becomes absolute; and, where the bank upon which it is drawn in which the debtor has funds to meet it suspends payment two days after the delivery of the check to the creditor’s attorney and before its presentation and payment, the drawer is relieved from liability, and the loss must be borne by the creditor.
    Appeal by the defendant from a judgment in favor of the plaintiffs, rendered in the Municipal Court of the city of Mew York, first district, borough of Manhattan.
    George H. Mallory, for appellant.
    Charles Dushkind, for respondents.
   Seabury, J.

This action was brought to recover for goods sold and delivered. The defendant pleads payment. The defendant communicated with the plaintiffs as to the debt and was informed that the plaintiffs had placed the matter in the hands of their attorney. On January 27, 1907, the defendant mailed a check for the. amount of the debt to the plaintiffs’ attorney. This check was received at nine-thirty a. m. on January 28, 1907, by a clerk in the office of the plaintiffs’ attorney. The check was drawn upon the Mechanics and Traders’ Bank and was made payable to the order of the plaintiffs. The clerk, on receiving the check, indorsed the plaintiffs’ name upon it and also his own name and delivered it to the attorney for the plaintiffs. The attorney indorsed it and transferred it to Louis F. Feldman, who also indorsed it. Feldman, so far as the record shows, is a stranger to the transaction. What Feldman did with the check does not appear. On January 30, 1908, the Mechanics and Traders’ Bank closed its doors and, at the time of the trial of this action, the check was in the possession of the attorney for the plaintiffs. On the hack of the check there is a rubber stamp mark which is as follows: “ Received Payment Through New York Clearing House, Jan. 29, 1908, Mechanics Bank, Seventy Sixth Ward Branch, Brooklyn, N. Y.” Upon this indorsement there are several blue pencil marks apparently put there for the purpose of erasing the indorsement. There is no evidence in the record explanatory of the rubber stamp indorsement or of the blue pencil marks. In the absence of any evidence upon the subject, neither the rubber stamp mark nor the blue pencil marks can be considered upon the determination of this appeal.

Although the court erroneously excluded evidence which the defendant offered to show that the plaintiffs’ attorney had authority to accept the check, we think that such authority may he implied from the other facts that were proved. When the defendant communicated with the plaintiffs, he was told that the matter was in the hands of their attorney; and this reference to the attorney held him out as having power to act for the plaintiffs. Walsh v. Hartford Ins. Co., 73 N. Y. 10. In view also of the fact that the objections of the counsel for the plaintiffs prevented the defendant from proving that the attorney had power to receive the check, the plaintiffs on this appeal cannot be heard to assert that their attorney was without this power. So far as this appeal is concerned, therefore, the plaintiffs’ attorney must be regarded as the agent of the plaintiffs and as acting within the scope of his authority in accepting the check. As between the plaintiffs and the defendant, the loss resulting from the failure of the bank should fall upon the former. Their agent received the check and, at that time and until the bank closed its doors, the account of the defendant in the bank was ample to meet the check. The agent of the plaintiffs did. not deliver the cheek to his principals or deposit it at once for collection. On the contrary, it is evident from the indorsements upon the check that the agent negotiated it. The check when originally delivered was merely a provisional payment of the amount due; but, when the authorized agent of the plaintiffs indorsed the plaintiffs’ name upon it and their attorney in turn indorsed and delivered it to some one other than the plaintiffs, that which was given as provisional payment became absolute, and the defendant was relieved of further obligation. It is well settled that delay in the presentment of a check will relieve the drawer from liability, where he has been injured by the delay. 7 Cyc. 977; Murphy v. Levy, 23 Misc. Rep. 147; Carroll v. Sweet, 128 N. Y. 19. In appropriating and negotiating the check, instead of depositing it for collection within twenty-four hours after it was received, the plaintiffs’ agent acted at the risk of his principals rather, than at the risk of the drawer of the check.

Judgment appealed from is reversed and a new trial ordered, with costs to the appellant to abide the event.

Gildersleeve and MacLean, JJ., concur.

Judgment reversed and new trial ordered, with costs to appellant to abide event.