Court Opinion

ID: 7947052
Source: CourtListenerOpinion
Date Created: 2022-09-08 23:21:46.030653+00
Date Added: 2024-06-11T16:33:58.271740
License: Public Domain

Ostrander, J.
(after stating the facts). It is immaterial, in the view I take of the case, whether there was or was not a mutual understanding of the village and *151the grantees of the franchise that the certified check was to be left with and held by the village in lieu of, or in the place of, the bond which the ordinance required to be given. If the check was not so received and so relied upon, it should have been returned to the maker upon his request. If it was so received, the right of the village was to forfeit it and collect it. Perhaps an authorized attempt to collect it would be sufficient evidence of an intention to forfeit it to the village. This question, however, is not for determination. Assuming that the village had the right to forfeit the check as liquidated damages, it has not done so, and more than six years has elapsed since its right accrued. The check is not in the possession or control of the village. Clearly, the common council would have no right to give the check away by formal or informal action, whether it belonged to the village or to complainant. I reject, as unsupported, the claim that any one supposed that Mr. Martin had the right to use the check to pay his private debt to Mr. Ryan. Complainant, the drawer of the check, was known to Ryan and to the village authorities as a person interested in the gas franchise. He was one of the associates of Martin. The check was drawn and certified to be held by the payee thereof for a special purpose. Martin was never a transferee of the check. It is clear that Mr. Ryan knew all of the circumstances. He had asked complainant, the drawer of the check, to consent to have it used to pay Martin’s debt. The village authorities had been requested by the drawer of the check to return it to him. They were informed by Martin that he wished the aid and cooperation of the village to pay his debt to Ryan. He received such aid and co-operation; Ryan being active in that behalf, and the beneficiary thereof.
The First National Bank of Calumet received the check with notice that it had been drawn and certified for three years, was payable to a municipal corporation, and was indorsed by the clerk of the municipality. The clerk of the village had no general power to transfer checks, cer*152tilled or other, payable to the village. The treasurer of the village is the custodian of its money and evidences of value. 1 Comp. Laws, §§. 2731-2738. The question is not whether there was mala fides in accepting a check, apparently good, properly transferred. It is whether the payee of the check appeared to have indorsed it. The authority of the clerk to make the indorsement was not apparent, and did not, in fact, exist. Beyond this, there is testimony strongly tending to prove that the bank took the check for collection, relying upon the indorsement of Ryan and his responsibility, and did not take it as a transferee, for value. I conclude there are no innocent transferees of the check whose rights are to be protected.
We have then this situation: No party in interest, excepting the complainant, seeks affirmative relief. The check, the subject-matter of the controversy, is held by one who has no right as against any one but Ryan to collect it. Complainant created the fund to pay the check, which he drew and deposited for a special purpose with the village authorities. The check has been wrongfully diverted. Either the village or the complainant is entitled to its possession and to the fund created to pay it. The village has never claimed it, has taken no steps to forfeit it. Not only has it not forfeited it, but upon this record, by its original answer, it disclaimed ownership, and by its amended answer has declined to ask for any relief. I do not mean to intimate that the action of the clerk and councilmen which has been referred to was sufficient to divest the village of its property, if it claimed the check as property. But the last statement from the village in its answer and the argument made in its behalf are calculated only to perpetuate a fraud upon either the village or the complainant. The extent to which the answers of the village, signed only by its solicitor, may be held binding upon the village, is not discussed in the briefs, and I shall not consider the proposition. The village is not in possession of the check. It does not appear that it ever will have the possession and control of it.
*153I do not agree to the conclusion reached by the learned trial judge that complainant has in any event no interest in the check and the fund evidenced by it. He had the right to have the check and fund used for the purpose for which the check was made and deposited. When he filed his bill, it appeared that it had been diverted, and that the village had never asserted the right to keep it as its own. The village does not now assert the right to have the check restored to it and to then proceed to forfeit it and to recover its damages. It declines, upon this record, to pursue the check or the fund. Under the circumstances, I see but one course to pursue, which is to grant complainant the relief prayed for in his bill, leaving the village to its remedy against those who participated in the diversion of its property.
The decree below is reversed, and a decree will, be entered in this court for complainant, with costs of both courts.
Moore, C. J., and Steere, McAlvat, Brooke, and Stone, JJ., concurred. Blair and Bird, JJ., did not sit.