Case Name: Robert S. Holt et al., Respondents, v. Elmore P. Ross, President, etc., Appellant
Court: New York Commission of Appeals
Jurisdiction: New York
Decision Date: 1873-09
Citations: 54 N.Y. 472
Docket Number: 
Parties: Robert S. Holt et al., Respondents, v. Elmore P. Ross, President, etc., Appellant.
Judges: 
Reporter: New York Reports
Volume: 54
Pages: 472–479

Head Matter:
Robert S. Holt et al., Respondents, v. Elmore P. Ross, President, etc., Appellant.
(Argued June 18, 1873;
decided September term, 1873.)
The rule that an agent in order to shield himself from liability must disclose his agency, is applicable to an express company, and is unaffected by the fact that it is the general business of such a company to act as agent for others. (Reynolds, 0., dissenting.)
The drawee of a draft is supposed to know the signature of the drawer, but the same knowledge of the signature of an indorser is not imputable to him, and by acceptance and payment he does not admit or guaranty the genuineness of the signature of the payee.
A draft drawn upon plaintiffs was fraudulently taken from the post-office, the indorsement of the payee forged thereon, and the same was intrusted to defendant’s company for collection, and was paid by plaintiffs upon presentation. It was not d'isclosed'-to them at the time that the express company was acting as agent. In an action to recover back the money paid, held (Reynolds, 0., dissenting), that the company was liable.
Appeal from judgment of the General Term of the Supreme Court in the first judicial district, affirming a judgment in favor of plaintiff, entered upon the report of a referee. (Reported below, 59 Barb., 554.)
This action was brought to recover back the amount paid the Merchants’ Uüion Express Company upon a draft or bill of exchange, upon the alleged forged indorsement of the payee.
The facts found by the referee are in substance as follows : That the Merchant's’ Union Express Company, of which • Elmore P. Ross is president, is a joint stock company, engaged in the usual business of express companies, and, among other things, in the collection of drafts and bills of exchange. That on or before -the loth day of January, 1867, the plaintiffs were indebted to the firm of Lamb, Quinlan & Co., of 2STew Orleans, in the sum of $771.45. That on or about the said fifteenth day of J anuary, they, by authority, drew a draft or bill of exchange on plaintiffs, for said sum, payable to the order of one T. D. Ford, and forwarded the same by mail to said T. D. Ford, át St. Louis, State of Missouri. That said draft was never received or indorsed by said T. D. Ford, or any one on his behalf; but the letter inclosing it was taken from the post-office in St. Louis by some person unknown, and the name of “ Thos. D. Ford,” the payee thereof, written upon the back of said draft, by some person unauthorized to sign the name of the payee, and who had no title to the draft. That said draft, so indorsed, was after-wards presented by the defendant, the Merchants’ Union Express Company, to the plaintiffs, for acceptance and payment, and the plaintiffs, without knowledge of the signature of the payee thereof, or that the indorsement of his name on said draft was not his genuine signature, paid the amount of the draft.
That the plaintiffs have since been compelled to pay said Lamb, Quinlan & Co the sum for which said draft was drawn. That the said defendant, the Merchants’ Union Express Company, has refused to repay said amount, or any part thereof, to the plaintiffs, although said draft was, on the 9th day of February, 1867, tendered to them, and repayment of the amount, so as aforesaid paid said company, demanded. That the defendant acted in good faith, and had no knowledge or suspicion that the indorsement thereon of the name of said Thomas D. Ford was a forgery, or unauthorized by him, or that said Newton was not fully authorized to collect and receive the amount of said draft from the,plaintiffs.
The referee found, as conclusions of law, that in the absence of any evidence that the said the Merchants’ Union Express Company, or their agent so presenting the same, disclosed to the plaintiffs that they were acting in the collection of said draft as agents for any other person, they were liable to the plaintiffs for the amount so paid, and judgment was directed accordingly.
Rollin Tracy for the appellant.
Defendant’s agency being in issue by the pleadings and admitted voluntarily on the trial, plaintiffs are bound by such admissions and estopped from denying them. (Paige v. Willet, 38 N. Y., 28; Conger v. Bean, 5 Bans., 322; Potter v. Bennett, 6 Barb., 144; McDonold v. Christie, 42 id., 39 ; Paige v. Fazackery, 36 id., 392.) The agency having been admitted, it was not necessary to prove it. (Walrod v. Bennett, 6 Barb., 145 ; Crosbie v. Leary, 6 Bosw., 313; Bridge v. Payson, 5 Sandf., 210.) Plaintiff s’ acceptance and payment of the draft was a guaranty to defendant of all the signatures on it. (Merch. Bk. v. N. J. Tr. Co., 6 How. U. S., 344; Stoddard v. L. I. R. R. Co., 5 Sandf., 187.) The company, on paying the money to its principal, was discharged of its obligation and liability. (Sweet v. Barney, 24 Barb., 538; Bk. of Com. v. Union Bk., 3 Comst., 230; Turnbull v. Bowyer, 40 N. Y., 460; Price v. Weal, 3 Bur., 1354; Turnbull v. Bowyer, 40 N. Y., 460; Goddard v. Merch. Bk., 4 id., 149; Bk. of Com. v. Union Bk., 3 Comst., 234; Hoffman v. Bk. of Milwaukie, 12 Wall, 186, 189 and cases cited; Priee v. Weal, 3 Bur., 1354; 15 Penn., 238; 2 Ad. & El. [N. S.], 196; Fitch v. Jones, 5 El. & B., 238; Asbourn v. Anderson, 1 Ad. & El. [N. S.], 498Wilkerson v. Luterige, 1 Strange, 648; Story on Bills, § 262; Story on Prom. Motes, 135, 379, 380, 1387; Edwards on Bills & Prom. Motes, 208, 309, 310.)
Robert Jackson for the respondents.
The burden of proving knowledge or notice of the agency was upon defendant. (Canal Bk. v. Bk. of Albany, 1 Hill, 287 5 Mills v. Hunt, 17 Wend., 333 ; S. C., 20 id., 431.) Plaintiffs paid defendant the money through a mutual mistake to which they had not contributed, and defendant must refund. (Canal Bk. v. Bk. of Albany, 1 Hill, 287; Talbot v. Bk. of Rochester, id., 295 ; Coggill v. Am. Ex. Bk., 1 N. Y., 113; Bk. of Com. v. Union Bk., 3 id., 237; Kingston Bk. v. Ettinge, 40 id., 391, 396 ; Union Bk. of Troy v. Sixth Wat. Bk., 1 Bans., 13.)

Opinion:
Earl, C.
The express company, when it presented the draft to the plaintiffs for payment and received payment, did not disclose its agency; therefore it is liable, as if actually principal in the transaction. It was so'decided in Canal Bank v. Bank of Albany (1 Hill, 287). It was not sufficient that the defendant acted as agent; to shield itself from liability it should have disclosed its agency. Such is the rule as to all agents. To shield themselves from liability for their acts they must give the names of their principals. Such is the rule in reference to the transfer of negotiable paper. If the transferer be only an agent, if he did not at the time disclose the name of his principal, and the bill or note proves to be a forgery, he is personally liable for the consideration received. (Gurney v. Wormsley, 4 Ellis & B., 133; Morrison v. Currie, 4 Duer, 79; 2 Parsons on Ho tes, 38.)
It matters not that the general business of the express company was to act as agent for others. It .could have owned this draft and have collected it as principal. Knowledge in plaintiffs that defendant might have acted as agent was not enough; and it was not the duty of the plaintiffs to inquire, before paying, whether the defendant was acting as principal or agent. It was the duty of defendant, if it desired to be protected as agent, to have given notice of its agency. The drawees of a draft are supposed to know the signature of the drawer, but are not supposed to have the same knowledge of the signature of an indorser. By acceptance and payment the drawees do not admit or guaranty the genuineness of the indorsement by the payee. (Canal Bank v. Bank of Albany, supra; 1 Parsons on Hotes, 322 ; id., 590.)
This is, therefore, a clear case for affirmance.