Court Opinion

ID: 5196217
Source: CourtListenerOpinion
Date Created: 2022-01-06 15:43:39.65251+00
Date Added: 2024-06-11T08:27:05.586784
License: Public Domain

Houghton, J. (dissenting):
I cannot concur in the conclusion reached by the majority of the court.
By subdivision 6 of section 12 of the County Law (Laws of 1892, chap. 686) boards of supervisors are given power to borrow money when they deem it necessary, on behalf of the county for certain specified purposes, and, in addition, “ for other lawful county uses and purposes.”
On November 19, 1898, the finance committee of the board of supervisors of Delaware county submitted to the full board its estimate of the needs of the county for certain specified purposes, aggregating $83,097.12. This report was adopted, and accompanying it was a resolution authorizing the raising of that sum by levy of tax, and in addition the county treasurer was authorized to borrow any sum necessary to defray the expenses of the county, in addition to the sums so specified, not exceeding, however, $30,000.
The three notes, aggregating about $18,000, recite that they are issued in pursuance of this resolution as well as in pursuance of the authority of section 91 of the Tax Law (Laws of 1896, chap. 908, as amd. by Laws of 1898, chap. 361).
If the Tax Law gave to the county treasurer no authority to *189borrow, the resolution did, and I do not think the notes were rendered void because of their reference to the Tax Law, or because there was added to the note a statement that the resolution authorized the borrowing “ in anticipation of taxes,” or that the money was desired to pay State taxes.
It was conceded upon the trial that these notes were signed by the county treasurer of Delaware county, and there was no dispute that the Albany County Bank discounted them in good faith and paid their face value to the State Comptroller in discharge of the State taxes due from the county of Delaware.
It seems to me that the issuing of the notes by the county treasurer apparently conformed to his authority, and that there was nothing to apprise the Albany County Bank that he was acting in excess of it. Such being the situation, his act was presumptively within his authority and the burden was upon the defendant to prove that the notes were given after the authority was spent. (Clark v. Board of Supervisors of Saratoga County, 107 N. Y. 553.) The defendant did not meet this by proving that there was no occasion to borrow money because the several towns of the county had all paid in to the county treasurer their quota of the State tax. The law does not require the identical money collected for State purposes to be transmitted to the State Comptroller.
So far as appears, the expenses of the county of Delaware may have exceeded the §83,000 raised by tax levy, and the moneys collected for State purposes may have been used to meet the deficiency. If this were the case, the county treasurer would then have had authority to borrow money to replace the money so used or, which would have amounted to the same thing, borrow the money and pay the State taxes direct.
There seems to be no controversy over the fact that Delaware county was indebted, upon county treasurer’s notes, which were conceded to be valid, to the extent of $33,000. Indeed the sharp controversy upon the trial was as to whether the $10,000 remitted to the Albany County Bank by County Treasurer Adair was in fact applied upon the notes aggregating $18,000 or upon the $15,000 note. The notes aggregating $18,000 seem to have been regarded by the county authorities as genuine notes, and it was the defendant’s contention that its draft of $10,000 and its renewal note of *190$8,000 went to pay the valid notes of $18,000 instead of the $10,000 being applied in part payment of the $15,000 note which was claimed to be spurious and unauthorized. The trial court found that the $10,000 transmitted by the plaintiffs to the Albany County Bank with instructions to credit the same to Delaware county was in fact applied upon the notes aggregating $18,000, and it could not from the evidence well have found otherwise.
If the notes aggregating $18,000 were valid obligations against the defendant and the $10,000 of the plaintiffs was applied to their payment an' action lies for its recovery. A payment induced by fraud through a forged instrument cannot be said to be a voluntary one. It was not made under a mistake of law or with full knowledge of the facts. On the contrary, it was made because of representations believed to be true, but in fact false.
Without passing upon the other questions the trial court dismissed the claim because the payment was a voluntary one. I do not think the judgment can be upheld either upon that ground or upon the ground that the defendant had,shown the notes upon which the plaintiffs’ money had been applied were unauthorized and void. The findings of fact do not authorize the conclusion of law which was reached.
Nor do I think the case of Goshen National Bank v. State (141 N. Y. 379) compels a reversal of the judgment with respect to the $5,000 claim. That case could well have been decided against the plaintiff, as it was, upon the ground that it had clothed its cashier with apparent and actual authority to issue drafts and, hence, it could not recover back the money even if he issued them fraudulently, or to himself without paying for them. Indeed, that seems to have been the controlling feature of the decision, for the same judge who wrote the opinion subsequently in Bank of New York National Banking Assn. v. American Dock & Trust Co. (143 N. Y. 559, 564) said: “ Nor is the. case of The Goshen Bank v. The State (141 N. Y. 379) an authority in point here. In that case it appeared that the cashier had power to draw drafts for his own use or payable to his own order upon the same terms that he had to draw a draft for a stranger, viz., upon payment to the bank of the amount of the draft. When the cashier issued such a draft, he was acting within the scope of his apparent authority, and the very act of issuing the draft was a representation of the existence of the *191fact that the draft was paid for. And we also held, for the reasons therein stated, that there was a difference in the case of bank or cashier’s drafts from most other cases of agency.”
By means of a forged note of the then county treasurer and by the false representations of Woodruff that the treasurer desired to borrow for the county §5,000, plaintiffs gave their check payable to Adair, county treasurer, for that sum, upon which the money was procured and used for county purposes. The check was not payable to Woodruff. He did not procure the money and give that to the county treasurer. He simply acted as the carrier of the check from the drawer to the payee. No title to the check or the money which it represented was ever actually or apparently in him. The county now repudiates Woodruff’s authority in borrowing money for it; but insists that it is entitled to retain the fruits of his fraud. This it cannot do.
It is no answer to say that Woodruff induced Adair to cancel his shortage from the check. It Avas no cancellation unless it Avas paid Avith money or its equivalent to Avhicli Woodruff had apparent title. There is no species of stolen property except money and negotiable instruments Avhicli the true owner cannot reclaim. The harsh rule denying the owner the right to reclaim these two classes of property has grown up from the necessity of preserving stability in business transactions. I cannot see that this rule applies Avhere an unauthorized person, by false representations, procures money to be paid to another who parts Avitli nothing of value.
In the Goshen Bank case the county treasurer, as cashier, drew a draft which he Avas authorized to draw. When that draft Avas paid his larceny became complete and title to the money Avas held to pass to the payee. In the present ease Woodruff did not draw any check nor indorse any. He simply by fraud induced one to be issued to the defendant.
The judgment in so far as it awards $5,000 to the plaintiffs should be affirmed: and that part of it dismissing plaintiffs’ complaint as to the $10,000 claim should be reversed.
Judgment upon the first cause of action affirmed, and judgment upon the second cause of action reversed and new trial granted, with costs to the defendant to abide event.