Court Opinion

ID: 5233160
Source: CourtListenerOpinion
Date Created: 2022-01-06 17:02:17.790242+00
Date Added: 2024-06-11T08:27:41.816823
License: Public Domain

Ingraham, P. J. (dissenting):
When this case was before this court on the former appeal (138 App. Div. 339) we applied the principle established in the case of Montgomery County Bank v. Albany City Bank (7 N. Y. 459) and expressly held, as I read the opinion, that the defendant could not be liable to the plaintiff on account of the failure of the People’s Trust and Savings Bank at Galesburg, where the note was payable, to present the note for payment and properly protest it. The conclusion at which my brother Clarke arrived in reversing that judgment is as follows: “To sustain the judgment in this case would be to hold that the defendant, without knowledge of the special agreement, though with knowledge of the general rule, was liable not to its immediate predecessor but to a remote principal upon the doctrine of agency of an undisclosed principal and for a negligence not of its own but of its correspondent. If the plaintiff is right, and the chain once broken, all the links fall apart, and it has the right to sue any one, it should have proceeded against the People’s Trust and Savings Bank. If it is not right and the rule has only been affected so far as the Cleveland and the Chicago banks are concerned, it has no privity with the defendant or right to sue it, even assuming, which we do not at all concede, that its act in allowing the words ‘No Protest ’ to appear upon its letter of transmittal was the proximate cause of the loss.”
As to the substantial facts upon which this conclusion was based there is no change upon the new trial. The plaintiff in this action sues as the assignee of the National City Bank of Akron, 0. It discounted this note for a customer, and before *423maturity sent it to its correspondent, the First National Bank of Cleveland, O.; the Cleveland bank sent the note to the Commercial Bank of Chicago, which forwarded it to the Illinois National Bank of Peoria, 111., which in turn forwarded the note to the People’s Trust and Savings Bank of G-alesburg, 111. I think it clear that, applying the principle established in the Montgomery County Bank Case (supra), this defendant was not responsible to the plaintiff’s assignor or either of the banks in the chain except for its own negligence. It received the note in the ordinary course of business for collection at a point distant from the city in which it was located, and it passed the note on to a responsible banking institution in the city in which the note was payable. It certainly assumed no obligation either to the plaintiff’s assignor or to any of the banks in the chain except for its own negligence, and there is no allegation or proof that it was negligent. The loss was occasioned solely by the failure of the G-alesburg bank to properly present the note. Certainly the defendant never became the agent of the plaintiff’s assignor except to transmit the note for collection, and I think in the absence of some negligence of the defendant the defendant was not liable.
I think, therefore, that the judgment appealed from should be reversed, with costs, and the complaint dismissed, with costs.
Judgment affirmed, with costs.