Seaboard National Bank v. Burleigh , 81 N.Y. Sup. Ct. 400 ( 1893 )

VAN BRUNT, P. J.

It is apparent from a reading of the complaint in this action that the attorneys who drew the same did not know exactly upon what theory a recovery was to be had,—whether upon a draft to be deemed accepted by the defendants under the statute, or for money paid out at their request. It is now claimed by the plaintiff that the action is for money had and received. It appeared upon the trial that the plaintiff was a national bank on the 1st December, 1892, and that the firm of Morse & Crombie kept an account with it, and that a note of $1,875 previously given for value to the defendants by Morse & Crombie, and indorsed by them, and then held by the Garfield National Bank, fell due that day, which note was payable at the plaintiff’s bank. The Garfield National Bank had presented the note for payment, and Morse & Crombie had not sufficient funds at the bank to pay it. Crombie, one of the firm, then called at the plaintiff’s bank and presented the following letter from the defendants to the vice president:

“Messrs. Morse & Crombie, New York—Gentlemen: The last day of your note of §1,875 is December 1st. We have been thinking to-day that you will not have time to get the other note back here in time. It was discounted at the Garfield Bank, and of course will be presented at the Seaboard Bank to-morrow, the 1st. Please pay this note, and draw on us for $1,875 for one month, and we will accept the draft, and pay it when due. You can show this to the cashier of the Seaboard Bank, and this will be your authority for drawing the draft.

“Yours, truly,

[Signed] “H. G. Burleigh & Bro.”

Morse said to the vice president: “You see this letter from Burleigh of Burleigh & Brother authorizing us to draw on them for payment of this draft. Burleigh & Bro. are perfectly good. Will you initial this note to be paid to-day, and allow us to draw?” The cashier then looked at the rating of the defendants, and found them very highly rated, and, after consultation with the president, the vice president said to Crombie: “Very well; you draw your draft, and I will initial this note to be paid.” The note was thereupon paid, and Crombie drew the draft, and brought it back to the vice president, who, noticing that it was drawn at 30 days, said: “We -don’t take any draft as long as that; we won’t accept that.” He then tried to recall the messenger of the Garfield Bank, but he had gone. The note had been certified. Crombie then said to the vice president: “Very well; we will make it three days, and I think Mr. Burleigh won’t object.” The vice president replied: “I am perfectly willing to do that.” Crombie drew the draft at three days’ sight, which plaintiff accepted, and sent forward for collection and payment. Upon this draft reaching the defendants, they refused to accept it, and on the 12th of December wrote a letter attempting to withdraw their offer to accept the draft at one month, as per their letter of November 30th. Subsequently, a draft was drawn at 30 days, which was sent to the defendants, and not accepted, and on the 29th of December another draft at one month, antedated to December 1, 1892, was sent to the defendants, and not accepted; and thereupon this action was brought.

It is urged upon the part of the appellants that the complaint ought to have been dismissed upon the ground that, while it alleges an agreement by defendants to accept a one month’s draft, it also alleges that said draft was due one month from December 1st, and was not presented to the defendants for acceptance until December 29th; that the authorization from the defendant was to draw on them for one month, and that that meant one month’s sight, and not one month from date. In support of this proposition, attention is called to the case of Bank v. Mcfarlan, 5 Hill, 432. In that case the defendant had sent to W. H. De Forest & Co. a letter in the following language:

“Gentlemen: I hereby authorize you to draw on me at ninety days, from, time to time, for such amounts as you may require, provided that the whole amount running and unpaid shall not exceed three thousand dollars; the-above letter of credit to be good and binding for one year from this date.”

—-And it was held that the only authority to draw was at 90 days’ sight, and not 90 days from date, upon the ground that the object of exacting a draft at 90 days was to give the drawee 90 days to prepare for payment of the draft after he learned that it was in existence, which was entirely in harmony with the authorization to draw. It was a letter of credit, drafts on which were to be made-from time to time at uncertain intervals, and, unless this construction was placed upon it, as the court said, “the words ‘90 days’ in the letter would be of no practical importance.” But the case at bar is entirely different. The defendants authorizing the draft upon them knew that the money was to be paid on the 1st December, when Morse & Crombie’s note fell due, and they promised Morse & Crombie that they would pay the draft in one month,. —plainly, in one month from the time the money was paid upon Morse & Crombie’s note. It was upon this draft that the money was expected to be raised to pay the note then falling due, and which the defendants were to receive the benefit of. It was undoubtedly understood by them that Morse & Crombie would draw their draft upon the 1st of December, and that it should have one-month to run. But it was never intended that that draft should be payable one month from sight, and no such construction can be placed upon the letter written by them on this subject. If Morse & Crombie had drawn the draft for one month from date at the time their note was paid, there can be no question but they would have been acting within the letter of authorization, and that the defendants would have been bound as acceptors of such draft. But it is said that the bank refused their offer in the first instance. The bank advanced the money upon the faith of an agreement of the defendants to accept a draft of Morse & Crombie. It is apparent that the officers of the plaintiff did not understand the-length of time of the draft which was to be drawn, and they probably would not have agreed to accept such a draft had they noticed the fact in the letter. But they made the payment upon the faith of a promise of the defendants to receipt a draft; and the fact that they were disappointed when they learned the length of time such draft was to run in no wise released the defendants from their obligation. The plaintiffs parted with their money upon the promise of the defendants; and it certainly cannot be claimed that they must lose it because they were ignorant of the full import of the promise. They are entitled to the full benefit of the contract, even though if, at the time they advanced the money, they had known its full import, they would have refused so to do. The most that defendants can claim is that the stipulations in the contract which were favorable to them, they should have the benefit of. We are of opinion, therefore, that it was the understanding of the defendants that the draft to be drawn pursuant to their authorization was to bear date on the 1st of December, 1892, and to be payable in one month from such date. And it was immaterial when such draft was drawn. The moment that it came into existence, the promise to accept attached to it had become an acceptance; the plaintiffs having advanced the money upon the faith of an acceptance by the defendants of a draft to be drawn, although they may have been ignorant, at the time they made the advance, of the length of time such draft had to run. The judgment and order should be affirmed, with costs. All concur.