M. Jacoby & Co. v. Payson , 98 N.Y. Sup. Ct. 480 ( 1895 )

FOLLETT, J.

It is agreed that the check which is the subject of this action was the property of the plaintiff, and that its title thereto could not be divested without its act or the act of an agent having power to transfer it. It is conceded that the check was not received by the plaintiff. The defendants insist that their testator acquired title to the check through the indorsement thereon of the plaintiff’s name by Henry L. Fesler. On the former trial it appeared that defendants’ testator received the check from Fesler in part payment of a debt owing by the latter to the former; but that fact was not proved on this trial, nor was it shown from whom Dennison received the check, nor was the consideration or the circumstances of its transfer to him shown or in any wise explained.

The learned counsel for the defendants asserts that Henry L. Fesler was authorized to indorse the plaintiff’s name and negotiate the check (1) by the contract of August 8, 1888, and the continuation thereof; (2) by the power of attorney of November 11, 1890, and the transfer thereof of November 20, 1890. it is plain that neither Henry L. Fesler nor H. L. Fesler & Co. had power under the contract of August 8, 1888, to compromise the claim against Wight & Co., or to indorse the check received upon the compromise. The goods out of which the compromised indebtedness arose were not sold through H. L. Fesler & Co., but directly by the plaintiff to Wight & Co. The only authority of Henry L. Fesler to compromise the debt is derived from the power of attorney, which, for the purpose of this decision, we shall assume was transferred to him by Fritz Reinliold. By the substitution of November 20, 1890, Henry L. Fesler stood in the place of Reinhold, and was vested with his powers, which were not derived from him, but, through him, from the plaintiff.

The case at bar cannot, we think, be distinguished in principle from Holtsinger v. Bank, 1 Sweeny, 64, 6 Abb. Prac. (N. S.) 292, 37 How. Prac. 203, and affirmed by the court of appeals in 3 Alb. Law J. 305, and 40 How. Prac. 720. In the case cited, the original power was as broad and general as the one in the case at bar. It contains this provision:

“I do hereby grant unto my said attorneys full power to execute and deliver all needful instruments and papers, and to perform all and every act and thing whatsoever, requisite and necessary to be done in and about the premises, as fully and completely, to all intents and purposes, as I might and could do if personally present, hereby ratifying and confirming all the acts of my said attorneys, or either of them, done by virtue and in pursuance of these presents.”

The power was given to enable the attorneys to collect arrears of pay due the principal from the United States. The attorneys received two checks drawn by a paymaster on the assistant treasurer of the United States at New York, payable to the order of the principal. Under the power, the agents indorsed and collected the checks; and it was held that the indorsements were not authorized by the power, and that the defendant (a bank), which had received the money from the assistant treasurer, was liable to the principal. The only distinction between the cases is that this plaintiff is a foreign corporation; and it is the custom to pay commercial debts by checks; and it is urged that the power to collect embraces the power to do it in the usual way, and to perform every act necessary to make the check available, or, in other words, to convert it into money. Had Fesler indorsed the name of his principal on the check, and received payment thereof directly from the drawee, a somewhat different question would have been presented, for in that case no liability would have been assumed to have been created against the principal by the indorsement; but Fesler, after indorsing the name of his principal, negotiated the check, thus assuming to impose a liability on his principal. There is no evidence that Fesler indorsed the check for collection, or that he ever received the avails of the check. We find no authority broad enough to justify this court in holding that the case at bar is not within the rule declared m t"hp piisp Tipfnrp rifpfl x

See, also, Filley v. Gilman, 34 N. Y. Super. Ct. 339; Bank v. Hochstadter, 11 Daly, 343; Hogg v. Snaith, 1 Taunt. 347.

The learned counsel for the respondent seeks to uphold this judgment on the ground that the plaintiff had clothed H. L. Fesler with apparent authority to indorse the check. There is no question of apparent authority in this case. No fact was proved which enlarged the authority conferred by the power of attorney, and there is no evidence that Dennison relied on the apparent authority of Fesler, or had knowledge of any fact tending to show that he had apparent authority. It does not appear that Dennison had ever heard of the plaintiff, or of the relations existing between it and Fesler, when he received the check; nor is there any evidence that Dennison received the check from Fesler. From whom he received it does not appear.

The judgment and order should be affirmed, with costs. All concur.