Opinion ID: 1965433
Heading Depth: 1
Heading Rank: 1

Heading: Appellant's Rights under Contract Law.

Text: Appellant takes the position that the law of negotiable instruments does not govern this situation and that the case must be decided on principles of contract law. If that be so we think it plain that he cannot prevail. The contract between the parties obviously consisted of the application signed by the appellant and the exchange of his money for travelers checks. In signing the application appellant, who is a lawyer, expressly agreed that he would countersign each check only in the presence of the payer to whom he was negotiating it. He also agreed that if he should default or fail to observe any of the foregoing obligations; any and all risk, loss and expense shall be for the account of the undersigned and the American Express Company and its agents shall not be liable or accountable therefor in any respect. Nevertheless he proceeded at once to countersign the thirty checks in question and in that state they were lost by or stolen from him in a very few hours. Thus we have an express contract and a clear breach thereof by appellant. It requires neither argument nor citation to demonstrate that such breach stood in the way of his recovery under principles of contract law. But he builds an argument to the effect that the Express Company was derelict in its duty after he notified them of the loss of the checks. He says they should have circularized their agencies with notices to withhold payment of the lost or stolen checks. But in view of the fact that the checks were admittedly countersigned and in view of what we shall say later it seems rather plain that such circularization would not have had any practical effect, for it is well-known that travelers checks are cashable all over the world. The Express Company could hardly have been expected to reach and cover every possible bank, steamship, hotel and other business establishment to forestall negotiation of the checks. Appellant also says that his making of an application for refund on the company's application blank involved a corresponding legal duty on defendant to pay that claim. We think that argument answers itself. There is nothing in the contract and no legal principle here applicable which would make the refund automatically grantable. Another ground on which appellant seeks to charge the Express Company with liability is based on the words of the application which provide that if he fails to observe any of his obligations (including of course the obligation not to countersign in advance), any and all risk, loss and expense shall be for the account of the undersigned and the American Express Company and its agents shall not be liable or accountable therefor in any respect. Appellant would have us read this to mean that because the Express Company had the right to charge him with the expense of investigating the loss or theft such right implied a duty to make such an investigation and that its failure to do so amounted to a breach of contract. This we think would be a highly strained construction for it would be converting a permissive or discretionary right into a mandatory duty. We must hold that no liability can be based on such ground. Next, appellant argues that a fiduciary relation existed between him and the Express Company and that on principles of equity he was entitled to recover. We find it difficult to follow this argument. No facts were presented in the trial court to show that any special relationship of trust and confidence was involved in the initial transaction  the purchase of the checks. As was said by Rugg, C. J., in Paulink v. American Express Co., 265 Mass. 182, 163 N.E. 740, 741, 62 A.L.R. 506: No fiduciary relation existed between the parties. The defendant did not receive the money of the plaintiff in any trust capacity. The transaction was purely contractual in its nature. It related to the subject of negotiable instruments, which is governed by statutes and general commercial usages and had no connection with the subject of trusts. Nor were any facts presented which would seem to have required the Express Company after notice of the loss or theft of the already-countersigned checks to do other than it did. We have already commented on the probable futility of such action. Appellant says the Express Company should have surrendered the checks to him after they had been redeemed but he presented no evidence in the trial court to show that he had suffered by the failure to receive the checks. We conclude that plaintiff did not make out a case for recovery under contract law.