Smalley v. Fulton Bank , 94 N.Y. Sup. Ct. 79 ( 1895 )

CULLEN, J.

This is an appeal from a judgment for the defendant entered on a dismissal of the complaint on the merits at circuit. The action is to recover $10,000, an alleged balance of deposit with the defendant, and the sole dispute is whether a check for that amount, dated August 31, 1888, was properly charged to the plaintiff’s account. The complaint was dismissed at the close of the plaintiff’s testimony. So we have only his version of the matter, and the question is whether he made out a claim which should have been submitted to the jury. The plaintiff testified that he was not only a depositor with defendant, but acted as a broker selling for the bank its silver coin. The course of business between the parties was that each week the plaintiff would give the defendant a check signed by him, but blank in other respects; that at times during the week he would take from the bank its silver, and the amounts taken be written on the back of this check; at the commencement of the next week he would give the defendant a check on a New York bank, to pay for the silver taken the previous week, and at the same time the blank check, with the indorsement thereon, would be destroyed, and a new blank check given by him. His account of the giving of the check in dispute is that it was one of the old memorandum checks, which should have been destroyed; that it was produced to him on this occasion with indorsements on it to an aggregate of $10,000; that he disputed his receipt of that amount during the past week, but, on being urged by the president and cashier, signed the check. He then left the bank, with the paying teller, and was told that it was not to pay for silver, but to pay the amount of the teller’s defalcation, that the check was needed. He then went to the teller’s father, who gave him a note for the sum payable at another bank the' next day. The note was not paid. Within the next week he went to the bank several times, and protested that the check was improperly charged to him, and finally, on September 7th, closed his account by drawing out the balance that appeared to his credit on the hooks of the bank. The defendant’s answer alleged that the check was given to make good the deficiency or debt of the teller. The story told by the plaintiff is certainly a singular one, but its credibility was for the jury. If believed, it showed that the check was given by him under a mistake of fact, not in payment of the teller’s defalcation, but upon the claim that he was indebted to the bank for silver. The answer of the defendant narrowed the issue between the parties to the claim that this check was given for the teller’s debt, for it admitted all the deposits alleged in the complaint, and also the credits therein given to the defendant. It was therefore not necessary for the plaintiff to go further than to disprove the allegation of the answer in this respect, and show under what circumstances the check was given. But, if further evidence than the allegation of the answer was necessary to show that there was no debt from the plaintiff to defendant on account of silver, we think such fact appeared on the trial. The plaintiff testified that he appeared before the president and directors with reference to his claim; that the president told him that when he (plaintiff) took the teller’s note he discharged the bank. The failure of the defendant to-make any claim at that time for silver given plaintiff is sufficient to show that such claim did not exist. Therefore the plaintiff was entitled, to go to the jury, despite the improbability of his story,.unless it appeared that he subsequently ratified the appropriation of the check to the payment of the teller’s debt. The first act which it is claimed is a ratification is the receipt by the plaintiff of the note of the father of' the teller payable the next day. This did not conclusively establish the assumption of the teller’s debt. The plaintiff had, according to his-story, unknowingly given the check which was used for that purpose.. He had a good defense to the check, but still he had executed an instrument which prima facie constituted an obligation against him. He might be justified in obtaining indemnity against the danger off liability on the instrument, without estopping himself from denying his liability. The second claim of ratification is based upon the dealings between the plaintiff and defendant after the former knew of the object to which Ms check had been appropriated. .The disputed check overdrew the plaintiff’s account almost to its face amount. He-then obtained loans from the defendant which made his account good. These loans he afterwards paid. His pass book was balanced on September 7th, with the charge of the disputed check, and he-drew out the balance, thus closing his account These transactions doubtless tended to prove a ratification and acquiescence by the plaintiff in the appropriation of Ms check, but still they merely presented a question of fact for the jury, and, in the light of other testimony by the plaintiff, were not conclusive. He testified that during-this period he continuously deniéd his liability on the check, and, further; that during the whole time the defendant held his securities, to the extent of $37,000. If this was the fact, he was to a certain, extent in the power of the defendant. There was a duress of goods. As to the notes given by the defendant, they were not for this particular claim, but applied on his general account. ' The plaintiff could undoubtedly, in an action on those notes, have counterclaimed for-his deposit balance or the misappropriation of his check, but he was not bound to do so. He could pay the notes, and retain his affirmative cause of action against the defendant. The judgment appealed from should be reversed, and a new trial ordered, costs to abide event.