Court Opinion

ID: 5458819
Source: CourtListenerOpinion
Date Created: 2022-01-09 19:27:34.209742+00
Date Added: 2024-06-11T08:32:45.452606
License: Public Domain

Wright, J.
(dissenting.) The action is againstthe defendants, the corresponding bank of the plaintiffs. It is not pretended that any thing has been collected on the draft, by the Union Bank. If liable, it is for the negligence or misconduct of the Troy City Bank, to whom they transmitted the paper for collection. In Allen v. The Merchants’ Bank of New York, (15 Wend. R. 482,) this court decided that when a bill of exchange, payable at a distant place, is deposited-with a bank for collection, without any agreement for compensation, the only obligation incurred is to forward the bill in due season to a bank or other suitable agent, at the place of payment, with directions to take the necessary measures to obtain payment; and accordingly when a bill was thus forwarded, and the bank receiving it placed it in the hands of a notary to make presentment for acceptance, which was made and refused, and the notary omitted to give notice to an indorser, whereby the debt was lost, it was held that an action would not lie against the bank where the bill was originally deposited, but the ■ holder must seek his remedy against the foreign bank or notary. This appears to have been the general commercial rule. (Bank of Washington v. Triplett, 1 Peters’ R. 25. East Haddam Bank v. Scoville, 12 Conn. R. 304. Fabens v. Mercantile Bank, 23 Pick. R. 330.) But the court for the correction of errors reversed the decision of this court, in Allen v. Merchants’ Bank, (22 Wend. R. 215,) holding that a bank receiving paper for collection at a distant place is liable, in the absence of any special agreement to the contrary, for any neglect of duty occurring in its collection, though arising from a default of its correspondents, to whom the paper was transmitted, *404or of agents employed by such correspondents. Thus the law as settled by the court of errors, holds the defendants in this case liable to the owner of the draft in question for the negligence, omission or misconduct of the Troy City Bank, or of the notary employed by it. Whatever opinion we may entertain of the soundness of the doctrine, this court has no recourse but to follow it.
But can the plaintiff (the Commercial Bank of Pennsylvania) maintain the action ? The proof showed, and indeed it was conceded throughout the case, that the Bank of Wilming,ton and Brandywine, was the owner of the draft. It ivas transmitted by that bank to the plaintiffs, as its agent, for collection. They received it as agents, and for the purpose of collection, and none other. They lose nothing by a neglect or omission to properly charge the drawer or indorsers. They are not the persons damnified, or who suffer by the negligence or misconduct of the' defendants, or their sub-agents. The action is not brought to recover upon the draft itself. Though assumpsit, in form, it is founded in negligence or omission of duty. Is such a right of action assignable ? I .think not. But if so, there is no pretense that the Bank of Wilmington and Brandywine have assigned the cause of action to the plaintiff. The learned judge who tried the cause held “ that though the plaintiffs were the mere agents of the owners of the draft to collect the same on their account, yet under the circumstances which appeared in evidence, they had sufficient interest in the draft to enable them to maintain the action.” In this I am at a loss to discover the meaning of the judge. If not the owners of the draft, what interest had they in it? What property in the chose in action lost by the negligence of the Troy City Bank ? It cannot be pretended that the indorsement of the draft, at the time it was transferred to the plaintiffs for collection, vested the legal title in them, so as to clothe them with the rights of owners. The indorsement was for a specific purpose, viz: to facilitate the collection for the owners, and the indorsement was stricken out before this suit was commenced. It is not perceived, therefore, what personal interest the plaintiffs had in the draft in questionat the commencement of this action; and it seems to me clear *405upon general principles, that having no such interest in the debt alleged to have been lost by the negligence or misconduct of the defendants or their sub-agents, they are not the proper parties to maintain a suit for the recovery of damages for such negligence or misconduct. Here we are presented with the naked case of an agent employed to collect a draft, liable to respond in damages to his principal for negligence or omission of duty, but who has not been charged with such damages, and never may be, seeking to° maintain an action against the agent employed by him, for the recovery. Should he recover, and appropriate the avails to himself, is it clear that such recovery would be a bar to an action brought directly by the principal against the sub-agent? Suppose, that in this case, the verdict obtained by the Commercial Bank of Pennsylvania be permitted to stand, and after being realized by such bank.it refuses to pay, as the institution becomes insolvent, will the Bank of Wilmington and Brandywine be barred of their remedy against the defendants ? If not, we have a rule not only enabling the principal to recover for the default of a remote agent but also an intermediate agent, whose liability has not been legally fixed, and never may be.
The Bank of Wilmington and Brandywine being the owner of the draft in question, might, have prosecuted directly against the Troy City Bank, for the distant agent is to be considered the agent of the holder as well as of the bank transmitting the paper. (Bank of Orleans v. Smith, 3 Hill, 560.) Thus a multiplication of actions would be avoided. This course is not taken, nor any course on the part of the persons having the beneficial interest and property even as against the immediate agent. One agent brings an action against another intermediate agent. How does this subserve the policy of the law which seeks to avoid a multiplication of suits by sustaining the action against the party ultimately liable ? But if the action had been against the Troy City Bank, or the notary, who in this case are to be regarded as ultimately liable, the doctrine of avoiding multiplicity of actions could have no application. *406The person who sues must have the fight to do so: unless this be so, it matters not whether the action be against a party presently or ultimately liable.
It seems to be conceded that the plaintiffs must have a special property, or a direct beneficial interest in the draft, to enable them to maintain the action in their own names. That they have none either in law or by the usage of trade, is the difficulty that I am unable to overcome. The fact of intrusting to an impolitic agent that which they should have performed themselves, or having themselves discharged their agency with such loches as to render them answerable to their principal in law, certainly, gives them no property in the subject matter of the. agency, or any beneficial interest in the thing itself. The plaintiffs occupied the position of ordinary agents. They undertook to perform a service for the owner of the draft, viz; to collect it. In undertaking this duty they are understood to have contracted for reasonable skill and ordinary diligence, and consequently are liable for injuries to their employer, occasioned by ordinary negligence or want of reasonable skill. But, unlike some other classes of agents, they had no property or lien upon the draft or the debt of which it was the evidence, or th.e proceeds of the draft. An auctioneer, who for • some purposes may be deemed an agent for both vendor and vendee, has a lien on the goods sold by him, and the proceeds thereof, for his commissions, and has an unconditional authority to sue the purchaser in his own name as being not merely agent but a contracting party. So also a factor, who has the possession, management, control and disposal of the goods to be bought and sold, has a special property in them, and a lien on them not only for commissions but for advances, and not only on the property itself but its proceeds. He may buy and sell goods in his own name for his principal, and for many if not for most purposes (except between himself and his principal) he is treated as the owner of the goods. He may sue in his own name for goods sold by him for his principal, and is also liable to be sued for goods.bought by him for his principal. These classes of agents have peculiar duties and peculiar functions resulting from- the *407general usage and habits of business and trade, and which have been repeatedly the subject of legal recognition. “ It may be laid down,” said Judge Story, “that wherever an agent, although known to be such, has a special property in the subject matter of the contract, and not abare custody thereof, or where he has acquired an interest in it or has a lien upon it, he may in all such cases sue upon the contract.” (Stoi-y on Agency, § 397.) Auctioneers and factors are classes of agents having a special property in the subject matter of the agency and alien upon it, and consequently by the usage of trade and by well recognized principles of law, may maintain actions in their own names respecting the property intrusted to their control, management and disposal. But even in these cases the principal may generally supersede the right of the agent to sue, by suing in his own name. How then can it be said that the plaintiffs in this case fall within the rules which authorize auctioneers and factors to sue in their own name to enforce the rights of their principals ? Auctioneers and factors, it has been seen, are classes of agents having peculiar duties and functions, well understood and defined by usage, legally recognized, and they have a special interest in and lien upon the property intrusted to them. The case of the plaintiff is that of a pure agency, where there is no lien or other interest or superior right in the claim, in the chose in action, or in its proceeds, or in the debt of which it is the evidence. I know of no adjudged case, nor have we been referred to any, as an authority for such an agent to maintain an action in his own name ; and if there be none, how are the defendants to be protected hereafter (there being a recovery in the case) against the suit of the principal, the owner and holder of the draft?
On the argument we were not referred to any authority claiming to bear upon the point of the right of the plaintiffs to maintain the action, except the case of Miller v. Adsit, (16 Wend. R. 335.) That case holds that replevin may be maintained by a receiptor of goods, where he is bound to deliver them by a specific day or pay the amount of the execution under which the levy was made, although the property be left by him in the *408actual possession of the defendant in the execution. This court had decided that a receiptor to an officer for property levied on so that it might be forthcoming at the day of sale, not in his actual possession could not maintain replevin against a mere stranger, for the reason that the receiptor was to be viewed in the light of a mere surety to the officer for the defendant in the execution. The engagement of the receiptor was that he would keep safely and be responsible to the officer to the value of the property, that it should be forthcoming. He had also a constructive possession of the property. The court of errors held, that under the circumstances he was not to be regarded as the mere surety of the defendants, or as the servant or agent of the officer, or a mere depository having no property whatever in the deposit, but the custody only. That if he could not maintain replevin against a wrongdoer in possession alone, he was not to be considered a naked bailee; but a bailee from the responsibility which he had assumed, having the right to maintain an action for injury to the property on the strength of his special property. In short, the case merely determines what before had not been law in this state, that a receiptor occupies a relation other than that of surety for the defendant; and that being answerable for more than due care and diligence in the safe keeping of the property, he is to be deemed to have a special property that will enable him to maintain an action against a wrongdoer, to recover its possession. Whether decided upon strict principle or not, I cannot perceive that it has the remotest bearing upon the case under consideration. No member of the court attempted to overthrow the universal doctrine, that a mere agent could not sue; the right of action being with the principal and no one else.
I am of the opinion that the action cannot be maintained by the plaintiffs. We may make this case a precedent, but not otherwise. They were not the owners or holders of the draft, nor had they any personal interest in or lien upon it. They were but the agents of the Bank of Wilmington and Brandy-wine to collect it. As such agents, it is true, they were responsible for their own negligence, and that of those with whom *409they may have intrusted the business. But no recovery has been had against them for any default. Their liability has not been fixed, and may never be. The owner and holder of the draft—-the principal, the sole party to be injured by negligence— does not complain. The plaintiffs have not been damnified by the acts or omissions of the defendants.
[Albany General Term,
December 5, 1853.
Parker, Harris and Wright, Justices.]
There should be a new trial with costs to abide the event.
Motion for new trial denied, (a)

 Affirmed by Court of Appeals. See 1 Ker. 203.