Court Opinion

ID: 5503173
Source: CourtListenerOpinion
Date Created: 2022-01-10 03:03:52.794428+00
Date Added: 2024-06-11T08:33:59.363954
License: Public Domain

Barnard, P. J.
On the 21st of October, 1891, the Brooklyn Trust Company certified a check to be good which was drawn by William B. Whitehouse on the trust company to the order of Augustus W. Peters, chairman. Peters was chairman of the Consolidated Stock & Petroleum Exchange. The check was given as a margin to secure I. M. Comsh upon certain railroad stock. The check was delivered by Whitehouse to Peters, and Peters deposited the *976check with other moneys of the exchange. The certificate was made by mistake, and on the 22d of October, 1891, before 10 A. m., the exchange had notice of the mistake. The trust company demanded the check, and offered to pay the loss realized by Comsh. This was $1,568.75. On the same day White-house suffered other losses to members of the board of the stock and petroleum exchange. The defendant represents these claims, other than Comsh, and, as such owner, demands the money, after Comsh is paid, of the exchange.
The exchange cannot keep the money, except to answer the Comsh loss. The trust company gave immediate notice of the mistake, and, except so far as there was a change of circumstances which had occurred by reason of the mistaken certification, a revocation of the certificate that the check was good could be made. Bank v. Wetherald, 36 N. Y. 335. The payment of the check by the trust company through the clearance house, to comply with the rule that a certifying bank must pay the check and settle all questions of validity with the parties to the paper, did not give the exchange any better title to the money than it had before. The exchange had no title except as to the ■Comsh claim, and Toler, by his judgment against Whitehouse, got no title to the money, which neither the exchange nor Whitehouse owned. Only one of the claims merged, if Toler knew of the existence of the certified check when the stock order was executed. He was neither a party nor a privy to the paper, and, so far as the case shows, had no better right than any of the general creditors of Whitehouse. There should be judgment, upon the submitted case, for the plaintiff.