Case Name: Kelley vs. The Mayor &c. of the City of Brooklyn
Court: New York Court for the Correction of Errors
Jurisdiction: New York
Decision Date: 1843-01
Citations: 4 Hill & Den. 263
Docket Number: 
Parties: Kelley vs. The Mayor &c. of the City of Brooklyn.
Judges: 
Reporter: Hill's Reports
Volume: 4
Pages: 263–266

Head Matter:
Kelley vs. The Mayor &c. of the City of Brooklyn.
A statement of a particular fund in a draft or bill of exchange, if inserted merely as a direction to the drawee how to reimburse himself, will not vitiate it.
Accordingly, in an action against the city of Brooklyn by an endorsee of an instrument, signed by the mayor and countersigned by the clerk, in these words: “ To the treasurer of the city of Brooklyn, at the Long Island Bank—Pay A. L. or order, fifteen hundred dollars for award No. 7, and charge to Bedford road assessment” &c. : Held that, notwithstanding the latter clause, the instrument was a negotiable bill of exchange.
A municipal corporation may issue negotiable paper for a debt contracted in the cotuse of its proper business; and no provision in its charter or elsewhere, merely directing a certain form, in affirmative words, should be construed as taking away this power. Per Cowen, J.
The same rule applies to all corporations, whether public or private. Per Cowen, J.
Where the charter of a municipal corporation provided that all moneys should be drawn from the treasury in pursuance of an order of the common council, signed by the mayor &c.: Held, that a negotiable draft on the treasury, signed in the manner directed, but issued on the basis of a mere note or memorandum in the corporation minutes, without a formal order having been entered, was a sufficient compliance with the charter; it appearing that this was the accustomed mode of drawing moneys.
The corporation will not be discharged from liability on such draft by the omission of the holder to make presentment to the treasurer and give notice, provided it be shown that it neither has suffered nor can suffer from the omission.
Assumpsit, tried at the Kings circuit, in December, 1841, before Kent, C. Judge. The action was by the plaintiff as endorsee of a written instrument in these words :
“ No. 1122. Dec. 31st, 1836.
City of Brooklyn, ss.
To the Treasurer of the city of
Brooklyn, at the Long Island Bank. Pay Alexander Lyon, or order, fifteen hundred dollars for award No. 7, and charge to Bedford road assessment &c.
A. G. Stevens, Clerk. Jon. Trotter, Mayor.”
(Endorsed) “ Alexander Lyon.”
On the trial, the plaintiff proved thel execution of the instrument and endorsement, and that the drawers were the mayor and clerk of the common council of the city of Brooklyn. It was also proved that, at the date of the instrument, the treasurer of the city had no funds arising from the Bedford road assessment, but that such funds came to his hands soon after and were drawn out from time to time by the officers of the city corporation. The instrument in question was presented to the treasurer in October, 1838, and payment refused. It further appeared that the'instrument was drawn in the ordinary form and according to the usual course of business in such cases, having been authorized by a vote of the common council. The entry in the book of minutes, evincing the authority, was as follows : “ Communication from H. C. M. that the opening of Bedford road had been confirmed &c., on motion, the usual order was entered.” No order was in fact entered, but the term u usual order” was shown to mean an order to pay the awards, costs of the proceedings &c. The plaintiff here rested, and the defendants’ counsel moved for a nonsuit on the following, among other grounds, viz. : 1. That the instrument in question was not presented in due season for payment; 2. That notice of non-payment had not been given ; 3. That the instrument was not negotiable ; 4. That the mayor and clerk were not legally authorized to bind the defendants by drawing the instrument in question ; and 5. That the common council had no power to issue negotiable paper for drawing funds from the city treasury. The circuit judge denied the motion, and the defendants’ counsel excepted. The jury rendered a verdict for the plaintiff, and the defendants now moved for a new trial on a bill of exceptions.
W. A. Greene, for the defendants.
C. Be Witt, for the plaintiff.

Opinion:
By the Court,
Cowen, J.
We are of opinion that the instrument which the plaintiff gave in evidence is a negotiable bill of exchange. The words, u City of Brooklyn, ss. To the Treasurer of the city of Brooklyn, at &c. Pay," &c., together with the signatures, import plainly enough a draft of the city by its agents. It is payable generally to A. Lyon or order, in cash ; and the payment is not, on the face of the bill, either conditional or restricted to any particular fund. The clause, " charge to Bedford road," &c. is a mere direction as to the mode of reimbursement. (Chit. on Bills, 158, Am. ed. of 1839.)
There is nothing, either in the mode of issuing or form of the draft, incompatible with the 21st section of the act to incorporate the city of Brooklyn. (Sess. L. of 1834, p. 97.) The provision requiring an order and warrant of the common council, for drawing money from the treasury, is satisfied, if, as was the case here, a draft be authorized according to the usual course of corporate business. The word order means no more than a direction ; which may be express, or implied from acquiescence in the general practice to issue drafts on the basis of such notes or memoranda as were shown to stand in the minutes of the corporation. The draft was signed and countersigned according to the statute, by the mayor and clerk. There is nothing in the statute expressing or implying an in hibition to make the warrants negotiable.
Independently of any statute provision, a corporation may issue negotiable paper for a; debt contracted in the course of its proper business. (Moss v. Oakley, 2 Hill, 265.) This is a power incident to all corporations, and no provision in its charter or elsewhere, merely directing a certain form in affirmative words, should be so construed as to take away the power. The draft in question was issued by the agents of the defendants, acting according to the usual course in such matters. A disavowal by the corporation, if allowed, might operate as a fraud upon the.plaintiff and upon others. The money, when drawn for, or soon after, was in possession of the corporation; and it stood a debtor to the plaintiff pro tanto.
The bill was not, on its face, restricted to the particular fund arising from the Bedford road transaction ; yet, for reimbursement, the treasurer was directed to charge that fund. As between him and the corporation, this was his proper resource ; and, the fund being exhausted, he no longer owed it as a duty to the corporation to pay. He accordingly has not paid. At times he was in funds ; but finally they were all withdrawn by warrants from the corporation itself, the drawer of the bill and the defendant in this suit. Yet the corporation objects that the bill was not presented in due season, and that it has had no notice of non-payment. Having got the fund into their own hands, it appears affirmatively that they neither have suffered nor can suffer any thing for want of either presentment or notice. Neither was therefore necessary. (Harker v. Anderson, 21 Wend. 375 ; Commercial Bank of Albany v. Hughes, 17 Wend. 94, 97 to 99.)
New trial denied.