Court Opinion

ID: 5215771
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:22:45.313034+00
Date Added: 2024-06-11T08:27:26.163140
License: Public Domain

Ingraham, P. J.:
The question presented on this áppeal arises upon a demurrer to the complaint which was sustained by the courts below. The complaint alleges that, at the city of New York, on or about March 28, 1905, the defendants, for value received, drew a bill of exchange in .at least two equal parts of even date and tenor upon the Société G-énérale of Paris, France, requiring it to pay in Paris, France, at sight, to the order of J. Palau & Co., a firm of Barcelona, Spain, the sum "of 2,500 francs, French currency ; that the defendants mailed both pails of said bill of exchange inclosed in post-paid wrappers on the 28th day of March, 1905, addressed to J. Palau & Co. at Barcelona, Spain, one part going by a steamer sailing on Wednesday and the other part by a steamer sailing the following day ; that the said J. Palau & Co. never received the first part of the said bill of exchange or the proceeds thereof; that the second part of the said bill of exchange was received by the. payees, by them duly indorsed and negotiated and .was in.the course of business on the 12th day of April, 1905, presented to the drawee for payment and payment thereof refused upon the ground that the first part of the *299said bill had in the course of business been presented for payment to the drawee on the 11th day of April, 1905, at Paris, France, and on that day paid by it to the holder thereof; that thereupon the second part was duly protested for non-payment and notice of dishonor given to the drawers, the defendants, and the same remains unpaid; that no request or instructions were given the defendants by the said J. Palau & Co., or by any other person as to the manner of delivering the said bill to said J. Palau & Co., said bill constituting a remittance by tlie defendants to said J. Palau & Co. for the payment of a debt due the latter by a third party who placed the defendants in funds for that purpose and instructed them to make the said remittance which defendants undertook to do; that when the first part of said bill was presented to the said drawee for payment and paid by it to the holder thereof it bore several indorsements each following the other, and was to all appearances regular on its face and the drawee paid said bill over its counter in good faith to the person presenting the same in the belief that it was making payment of said bill to the lawful holder thereof, although taking no steps to ascertain the identity of the person presenting the same or the genuineness of the indorsements thereon; that all of said indorsements on said first part of said bill are forgeries and the names of all the indorsees thereon, except that of J. Palau & Co., are the names of fictitious persons. It is further alleged that by section 145 of the French Code of Commerce, then and now in force in the Eepublic of France where the bill was made payable, it is provided: “ Section 145. The party who pays a bill of exchange at its maturity and without opposition is presumed validly discharged.” The liability of the defendants is predicated solely on the non-payment of the bill of exchange which they had issued duly protested for non-payment. The action is brought by the assignee and is based upon the protest of the second part of the bill of exchange, the complaint admitting that the first part, of the bill of exchange had been paid by the drawee in good faith to a person presenting the same, the indorsement of the payees, however, having been forged.
There can be no question but that the law of the place of performanCe, namely, Paris, in the Eepublic of France, governed as to the payment of the bill. By the.bill in question the'drawee of the bill xvas required to pay to the payees at Paris in the Eepublic of *300France the sum specified. As. to all the parties to the bill, whether maker, drawer, acceptor or indorser, all matters connected with the performance of the contract are regulated by the law prevailing at the place of performance.- (Smith v. Smith, 2 Johns. 242; Spies v. National City Bank, 174 N. Y. 222.) This latter case is reported in 61 Lawyers’ Reports Annotated, 193, where there is a valuable note in which all the cases on the subject are collated and the result of -those authorities established the rule before stated. This bill of exchange Was drawn in at least two parts of even date and tenor. By section 310 of the Negotiable Instruments Law (Gen. Laws, chap. 50 ; Laws of 1897, chap. 612 ; .re-enacted in the Consol. Laws, chap. 38; Laws of 1909, chap. 43) it is provided: “ Where a bill is drawn in a set, each part of the set being numbered' and containing a reference to the other parts, the whole-of the parts constitutes one bill.”
Section 315 of the act provides: “Except as herein otherwise provided, where any one part of a bill drawn in a set is' discharged by payment or otherwise the whole bill is discharged.” Therefore,a valid payment by the drawee of one part of this bill discharged the whole bill.
- Tlie complaint alleges that this bill was drawn in two parts, one of which .parts was actually paid by the drawee to the person presenting It although the payee’s, name thereon had been forged. If this payment was valid by the law' of the Republic of France it necessarily follows that the bill itself was discharged and no liability could be predicated on the refusal to pay the second part as payment of the first part had discharged the obligation to pay the same to the payees. The defendants were liable if at all under section- 111 of the Negotiable Instruments'Law which.provides that the drawer by drawing the instrument engages that, on due presentation the instrument will be accepted and paid, and that if it be dishonored and the necessary proceedings on dishonor be duly taken he will pay the amount thereof to the holder. If the drawee pays one part of a. bill drawn in a set the bill itself is discharged) and, therefore, the bill was not dishonored. The complaint also alleges that the payment of the first part was a valid payment under the French law in virtue of the provisions of articles 144 and 145 of section 9 of title 8 of the French Code of Commerce *301then and now in force, and the sections of the said law translated from French into English are set forth in the complaint. By the demurrer the defendants admit these facts. This allegation is, I think, sufficient as an allegation of the law of France that the payment of the first part of this bill was a valid payment and discharged the drawee. The English translation that is given of section 145 of the French Code of Commerce is that the party who pays a bill of exchange at maturity and without opposition is presumed validly discharged. This is the allegation of the French law which is a fact alleged in the complaint and admitted by the demurrer. As I understand the meaning of this section it discharges the drawee from all liability on actual payment of a bill to'a person presenting it without regard to the validity of the indorsements thereon. The presumption as to the discharge of the drawee arises from the actual payment to.a party presenting the bill at maturity and without opposition. The bill was due and it is alleged and admitted that it was paid without opposition. Therefore, the presumption arises that the drawee was discharged and under" section 315 of the Negotiable Instruments Law the whole bill was discharged. We are not dealing with the question as to the-discharge of the original debtor from his debt to the payees, the payees not having specified this method of payment of his debt and undoubtedly there would be no discharge of the indebtedness until they received payment. Nor is this action brought to recover any damages that the original debtor of the payees has sustained because of the method adopted by the defendants in transmitting the bill to the payees. The action is brought solely upon the effect of an alleged refusal to pay by the drawees. This liability is based upon the promise of the drawers of the bill to pay to the holder the amount ordered to be paid in the event that the bill is dishonored by the drawee. If the bill was paid by the drawee upo'n presentation according to the law of the place where payment was tp be made, then it could follow that the obligation assumed by the defendants had been met and no action could be based upon the failure to pay the bill when presented, the only obligation that the drawers assumed in drawing and delivering the bill. The liability of the defendants, therefore, depends entirely upon the question as to whether the bill was duly paid on presentation and if the view before stated is correct—that payment by the *302drawee of the first part of the set discharged the whole bill.1— there can be.no liability upon the obligation assumed by the defendants in drawing and delivering the bill, and if our construction of the allegations of the complaint as to the French law is correct it follows that the whole bill was discharged and the defendants were not liable.
The plaintiff contends that as the second part of this bill which is now. sued on was the only one delivered to tlie payees, therefore, as between the drawers and the payees it constituted the only valid existing instrument and that the payees could not be affected by the fate of the undelivered duplicate of the.bill. But the bill itself was drawn- in a- set, and, therefore, all of the parts constituted one' bill. The defendants were under no obligation to the payees to transmit a sum of money. The validity of the bill did not depend upon its being received by the payees, but was an existing obligation 'of the defendants when issued by them and delivered to the post office authorities for transmission; the right of the payees to recover depended not upon their receipt of the bill, but upon a failure of the drawee to pay the bill when presented at maturity and without opposition. If the drawee duly paid the bill when presented according to the law of the place-of payment the bill was discharged and no further liability existed upon it, and as the complaint alleges that the drawee did pay one part of the bill when presented to it according to the law of the Republic of France where it was payable, the bill itself having been discharged it would seem to follow that no action could be maintained by the payees against the drawers for a failure to pay the bill. There is no allegation that the drawee was negligent in paying the first part of the set when presented. The complaint alleges that the bill-was paid by the drawee over its counter in good faith to the person presenting the same in the belief that it was making payment of the bill to the lawful holder thereof, although before making such payment it did not take any steps to ascertain the identity of tlie person presenting the same or the genuineness of the indorsements thereon. It is not alleged that an obligation to ascertain the identity of the person presenting the bill or the genuineness of the indorsements was imposed upon the drawee by the law of France and the allegation that the bill was paid in good faith and without opposition under the law of the Republic of *303France was, as before stated, a discharge of the drawers from any obligation upon it.
It follows that the complaint states no cause of action against the defendants and the judgment should, therefore, be affirmed, with costs.
McLaughlin and Miller, JJ., concurred; Laughlin and Dowling, JJ., dissented.