Court Opinion

ID: 6430171
Source: CourtListenerOpinion
Date Created: 2022-06-25 12:07:29.925982+00
Date Added: 2024-06-11T15:52:04.744364
License: Public Domain

Hammond, J.
The checks were on their face the checks of the plaintiff, a municipal corporation. Carpenter v. Farnsworth, 106 Mass. 561. The defendant therefore must be held to have known this; and it knew further that they were delivered to the defendant in payment of the individual debt of the treasurer. In short, the defendant knew that it was receiving in payment of the individual debt of the treasurer checks of the municipal *603corporation, and therefore that upon the face of the transaction the treasurer was using the funds of the city to pay his own debt. No citation of authorities is needed in support of the proposition that in the absence of proof of authority on the part of the treasurer such a check is invalid. The payee is charged with notice of a possible want of authority on the part of the agent or officer to bind the principal, and cannot recover upon the check or retain the proceeds without showing that the execution of the paper was duly authorized. And this would be so irrespective of the question whether or not there was an ordinance prohibiting such an act. If there had been no such ordinance the principle would have been applicable. Prima facie and on its face the check is issued without authority.
Although it was not made payable to the defendant, yet it was received by a duly authorized agent of the defendant, in payment of a debt due to it, and the proceeds were duly credited to its account; and its right to hold the proceeds is based only upon the ratification of the act of its agent. Under these circumstances the knowledge of its agent is the knowledge of the defendant, and no help for the defendant is found in R. L. c. 73, § 73. There is nothing in Fillebrown v. Hayward, 190 Mass. 472, relied upon by the defendant, which is inconsistent with this view of the law. Not to mention other material distinctions between that case and this, it is to be remembered that here we are dealing with the acts of a treasurer of a city, who under our law has no authority as such to issue commercial paper. Abbott v. North Andover, 145 Mass. 484. Compare also Merchants' National Bank v. Citizens’ Gas Light Co. 159 Mass. 505.
There does not appear to have been any ratification on the part of the plaintiff. The facts were not known. The negligence of the auditing officers of the plaintiff, if any there was, is not available as a defense to the defendant.
It is strongly argued by the defendant that before this action was brought it had distributed the money among its policy holders, so that it has now no fund on hand to meet this demand. But the answer is that it took the money with full knowledge of the very infirmity in its title upon which the plaintiff bases the right to recover. It must be held to have paid over at its own risk. In law it held the money for the *604plaintiff, and it' cannot relieve itself from responsibility by a division of it among its policy holders.
From the above considerations it follows that as to all the requests for rulings, so far as they respect the question of liability, no error appears in the action of the trial court.
The defendant excepted to the exclusion of certain evidence offered by it. The first offer was properly excluded. The evidence was offered as bearing upon the question of constructive notice. But it could not affect the question of actual notice in this case and was immaterial. The exception arising upon the second offer was waived.
As to the third offer, which was to prove that “ if the defendant should attempt to inquire into all checks which are received by it from the holder of policies for the payment of premiums which are not issued in the name of the assured, it could not carry on its business, as such inquiry was a practical impossibility,” the answer would seem to be that, if the defendant cannot carry on its business under the general laws of the land without risk, it had better conclude, not that the law is to be changed for its particular benefit, but that it must either assume the risks or stop the business.
The subject contained in the fourth offer has been covered, and no further comment need be made on it. The judge properly excluded all the evidence contained in the four offers.
There remains the question of interest. The defendant received the money of the plaintiff in payment of the individual debt of the treasurer. It knew this. Such a reception of the money was a fraud upon the plaintiff. The money was wrongfully received, and with notice of the defect in the title. It was the duty of the defendant to return it where it belonged, and that without a demand by the plaintiff. Under these circumstances interest should be charged from the time when the money was received. Dodge v. Perkins, 9 Pick. 368, and cases there cited. Atlantic National Bank v. Harris, 118 Mass. 147. Wood v. Robbins, 11 Mass. 504. Gale v. Chase National Bank, 104 Fed. Rep. 214. Reynolds Elevator Co. v. Merchants National Bank, 55 App. Div. (N. Y.) 1. Rogers v. Betterton, 93 Tenn. 630.

Exceptions overruled.