Court Opinion

ID: 5193973
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:40:30.799565+00
Date Added: 2024-06-11T08:27:00.519852
License: Public Domain

Patterson, J.:
The plaintiff and his brother, Charles F. Allen, now deceased^ were the owners of landed property in the State of California. They made a' contract with S. M. Buck of that State, by which Buck was to purchase the land at a specified sum, payments to be made in various amounts at designated times. The 'aggregate payments were to. be $65,000. The brothers made a deed of ■ the property, which was deposited with Wells, Fargo & Co., to be held by them until Buók made the payments required by the contract. At various times during the years, 1893 and 1894 Buck paid to Wells, Fargo & Go. certain amounts on account of his purchase, which were remitted to Charles F. Allen by checks- or drafts, less charges, as follows': February 16,1893, $9,900; August 12, 1893, $2,985 ; November 8, 1893, $8,457.50"; February 7, "1894, $5,866.83; November 8, 1894, $3,184. Four of these checks were drawn to the order of Charles- F. and. A. C.'Allen, and the fifth to the order of Charles F. and Aaron F. Allen. - Upon receiving them they were indorsed by Charles F. Allen as follows : That of February 16, 1893, “ Chas. F. & A. C. Allen, For deposit, Chas. F. Allen.” - That of August 12, 1893, was indorsed in the samé way. 'That ,.of November 8,. 1893, was indorsed, “For deposit, Chas. F. & A. C. Allen, Chas. F. Allen.” That of February 7, . 1894, was indorsed, “Chas. F. Allen, for deposit, Chas. F. & A. C. Allen.” That of, November 8, 1894, was indorsed, “ For deposit, Chasi F. & Aaron C. Allen, Chas. F. Allen.” All the checks as-thus indorsed w;ere deposited in the Corn Exchange Bank to. the individual credit of Charles F. Allen, and it is not controverted that he received the benefit of the credit. Charles F. Allen died on the 30th of November, 1898, and thereafter and about tlie14th of February, 1899, this action was begun against the Corn Exchange'Bank to recover one-half of the" proceeds of the Wells, Fargo & Co. checks thus deposited to the credit of the' individual account of Charles F. Allen. Subsequently, the executors of Charles F. Allen Were made parties to the action, but the present-controversy is between the bank and the plaintiff. ', -
*337It appeared in evidence that the plaintiff and his brother Charles were tenants in common of the California lands, and as such made their agreement to sell and convey them to Buck. They were not copartners. The plaintiff’s claim is that the checks (or the money represented thereby) were the property of himself and Charles F. Allen, he having an equal interest therein with his brother, who, without the knowledge, consent or authority of the plaintiff, indorsed the plaintiff’s name on each of such checks and transferred it to the defendant bank, which received the same and collected the amount thereof, and that the plaintiff never transferred his interest in the •checks to the defendant bank and never consented to the transfer thereof and never authorized or consented to the payment of the checks to the defendant. The plaintiff also alleges, in substance, that he did not know of the facts concerning his brother’s dealing with the checks until after the death of that brother.
The first question presented for consideration arises upon the facts as thus far stated, and it may be formulated thus: Did the defendant bank acquire by the indorsements made by Charles F. Allen a title to the checks which would extinguish the right of the plaintiff to one-half of the moneys received by the bank on ■such checks ?
There is nothing in this record to indicate that a copartnership relation existed between the brothers Allen in the transaction relating to the California lands, nor is it to be doubted that the checks which were received by Charles F. Allen were for moneys, to which he and his brother were jointly entitled. Each was a payee of each check, and where commercial paper is payable to two or more persons, who are not copartners, it, must be indorsed by all to give good title to a transferee. In Willis v. Green (5 Hill, 233) the court, by Nelson, Ch. J., says that it is the settled commercial rule that copayees, not partners, must each indorse, in order to negotiate the paper. (Citing Chitty on Bills [ed. 1840], 67, 254.) In Foster v. Mill (36 N. H. 526) it was held that where a promissory note is made payable to the order of two joint payees, their joint indorsement is necessary to negotiate it. In Bennett v. M’Gaughy (4 Miss. 192) it is said that it is well settled that where a note or bill is payable to two, it must be indorsed by both, in order to con*338vey the entire interest in it to the indorsee. (Citing Chitty on Bills, 61, 226.) In Wood v. Wood (16 N. J. L. 428) it was held that one joint payee of a promissory note cannot indorse it, either in his own name alone or in his own name and that of his Copayee. They are not considered partners either in the commercial or legal sense of the term. In Smith v. Whiting (9 Mass. 334) it was held that one of two executors cannot assign a negotiable promissory note, made to them, as executors, for a debt due to their testator. In Ryhiner v. Feickeri (92 Ill. 305), where a note was payable to the order of Charles and William Feickeri, who were not partners, the court ruled that the note was not prima facie payable to a firm and that the possession of one joint owner was not evidence of a partnership and the title as against both could only pass by joint indorsement. In Daniel on Negotiable Instruments (5th ed. § 684) the author says that if several persons, not partners, are payees of a bill or note, it should be indorsed by all of them, unless it should be expressly payable to the order of. either of them, or to the order of certain ones of them, in which cases their indorsement would suffice, but there is no presumption of law that one may indorse for the other. It is claimed, however, by the appellant that it has been decided otherwise in this State, and the case of People v. Keyser (28 N. Y. 226) is quoted as authority. Judge Seldeh remarks in that case that any one of several joint payees of. a note, bond or other personal obligation has a right to receive payment of and to discharge such obligation. But that was a case where' a mortgage was made to two persons who were described as executors and it was considered by the court that either of the mortgagees had a right to receive the money and discharge the mortgagors. So far as the statement in the opinion relates to joint payees of a note who are hot partners, the authorities cited by the learned judge do not support that proposition., Pierson v. Hooker (3 Johns. 68) and Bulkley v. Dayton (14 id. 381) are cases which did not involve a promissory note, but the releases therein held to be good were made by one copartner, nor do Stuyvesant v. Hall (2 Barb. Ch. 151) and Murray v. Blatchford (1 Wend. 583) relate to negotiable paper.
We are of the opinion that the learned judge presiding at the trial of the present case correctly held that the indorsements were insufficient to pass to the Corn Exchange Bank the interest which *339the plaintiff had in the money represented by the checks. But that does not dispose of the whole case. There were still involved two questions: First, whether Charles F. Allen did not have actual or implied authority from the plaintiff to .receive the money paid by Buck through Wells, Fargo & Co.; and, second, if such authority did not exist whether the plaintiff did not, with full knowledge that the payments were made, ratify the act of his brother in receiving them for and on account of himself and the plaintiff.
The learned judge entertained the view that but one question arose in the controversy, and that was submitted to the jury, namely, whether Charles F. Allen, although he was not a partner with the plaintiff, had authority from him to indorse the drafts or checks. He instructed the jury that there was no direct evidence of such authority having been conferred, but that that was not necessary if the existence of such authority could be fairly inferred from all the facts and circumstances of the. case. He further instructed them that if Charles F. Allen did have such authority, it made no differencé at what particular time it was conferred. He was asked by the counsel for the defendant bank to charge that "if the jury believed the defendant’s witnesses, then upon their evidence and on the uncontradicted documentary evidence in the case they could find that the plaintiff ratified the indorsements and cob lections of the checks involved in the case. The court declined so to charge, stating as the reason that the jury had nothing to do with ratification. The court was also asked to charge that if the jury should find .from the evidence that the plaintiff, with full knowledge of the fact, ratified the acts of Charles F. Allen, then the defendants are not liable. That request was also declined and exceptiotis were duly taken.
In returning their verdict for the plaintiff, the jury must necessarily have found that there, was no authority at any time or in any way given to Charles F. Allen by the plaintiff to indorse the checks. The charge of the learned judge seegis to have limited the question of authority in such a way as to separate it from circumstances in the case, which tended to show acquiescence of the plaintiff in what was done by his brother in receiving the remittances made by Buck through Wells, Fargo & Co., and collecting the amounts thereof.
*340We think the inquiry was not properly limited to the single subject of authority conferred to indorse checks as an isolated act. If the plaintiff, with -full knowledge that his brother had received the remittances and of the manner in which those remittances, were made, rested supinely for years without objecting to the course pursued with respect to. them the jury might well have been justified in finding that lie acquiesced in all his brother, had" done with respect to them, and that he was content with the existing condition of the matter^ although authority to indorse the checks had not been given. There was enough in the proofs to require •the submission of this subject to the jury. Ratification means the adoption of an unauthorized act, and acquiescence, although it may not in itself be ratification, is nevertheless evidence of it. What are the. facts then from which the jury might have found -that the acts of Charles F. Allen were ratified ? The plaintiff knew that all the correspondence' and all negotiations, extending over several years, had with Mr. Buck concerning the land were conducted by his brother alone and that payments were made on account of the purchase. The plaintiff himself does not" appear to have taken any part whatever in the transactions. The whole matter,. in all its details, was confided to- Charles F. Allen. The plaintiff knew that Charles had received the amount of the first payment required under the contract With Buck, namely, the sum of $10,0.00, less charges. He admits that he knew it — in one of the letters he wrote to. his brother. The plaintiff also knew that his brother was receiv, ing moneys on account of Buck’s contract; and in one of his letters he instructed Charles to get out of Buck all he could on account and that if Buck failed “ to carry out the contract to the letter, put on the screws.” The plaintiff also knew that various extensions of time within which to make some of the payments under the contract had been given to Buck and he knew of negotiations between Charles and Buck with reference to these extensions, for a lettei and telegram from Buck to Charles had been sent to the plaintifl arid had been returned by him to Charles. Again, in 1894. Charles paid the plaintiff $3,000, which was part of the moneys received by Charles F. Allen on this California transaction with Buck.
After the death. of Charles an arrangement was made between the plaintiff and the widow of Charles with Buck and one Balmtag, ■ *341by which new relations were established and new interests created in the California land. That arrangement is contained in a written agreement executed in January, 1899, in which it is recited that in consideration of moneys paid to and of legal services performed for the parties of the first part thereto (Adelaide G. Allen, widow of Charles F. Allen, and Aaron C. Allen) and other considerations, Buck and Palintag were to have certain interests in the property and all agreements theretofore made between the parties, or their predecessors in interest, relating to the land were superseded by the agreement- The plaintiff knew at that time what moneys had been paid to Charles. In a letter written by him on the 14th of January, 1899, he refers to the fact that Buck had invested over $36,000 in these lands; and the information concerning the amount paid by Buck on account of the purchase was contained in a letter written by Buck to the plaintiff on January 5, 1899, inclosing an account.
From all this and much other evidence, the jury could have found that the plaintiff ratified and adopted all that had been done by his brother Charles in the realization by him personally of the proceeds of the sale of the California lands.
It also appeared in evidence that the plaintiff has brought an action against the executor of Charles F. Allen to recover one-half of the moneys received from Buck. That action was not brought until some months after the one at bar was instituted. We think that it cannot be successfully claimed that that was an election to sue Charles F. Allen’s executor and to abandon this action. But on the whole case, we are of the opinion that it should have gone to the jury on the evidence as to ratification.
The judgment and order should, therefore, be reversed and a new trial ordered, with costs to the appellant to abide the event.
Van Brunt, P. J., Hatch and Laughlin, JJ., concurred.