Bernheimer v. Herrman , 7 N.Y. St. Rep. 490 ( 1887 )

Van Brunt, P. J.:

The appellant claims, amongst other things, that the only evidence on the question of the authority of Morse to indorse checks being that of one of the plaintiffs, it was error to refuse to submit the case to the jury. -

It is true that where it is necessary to prove a material fact in a case, and the only evidence having a tendency to establish such fact is that of a party interested, that the opposing party has the right to have .the question submitted to a jury; but this rule has no application to the case at bar. The appellants claim payment by a check, payable to the order of the Suspender Company, and the burden is upon the appellants to show that the check has been duly indorsed and paid ; and the respondents are not bound by the production of a check purporting to have been indorsed by them, unless such indorsement is admitted or proved. It is also a familiar rule of law that, where a party claims to bind a principal by the act of an agent, that the authority of the agent must be proved; therefore, in the case at bar, the check in question purporting to bave been indorsed by Morse as attorney for the plaintiffs, the burden was upon tbe defendants to show his authority

The next questions to be considered are those raised upon the motion to dismiss the complaint. First, that the claim in suit has been paid, and, second, that the plaintiff’s proper remedy was an action for conversion against either Cochrane, the North River National Bank or the Chemical Bank, or against all' three combined, the title to the check having passed to the plaintiffs immediately on its receipt by their agent. It is somewhat difficult to see why the appellants counsel lias omitted the defendants from the last proposition. If Cochrane converted the check, and the North River Bank converted the check, and the Chemical National Bank converted the check, the defendants are equally guilty of conversion in now retaining the check If the check was the plaintiffs’ while Cochrane or the North River Bank, or the Chemical Nati on si Bank held it, it is equally so now, while the defendants hold the same, and the plaintiffs have no greater rights against the first three named than exist in their favor against the defendants If no title to the check was conferred upon Cochrane and the banks by the unauthorized indorsement, certainly they could trail s-fer no title to the check to the defendants.

The claim that the plaintiffs’ demand has been paid does not seem to have any better foundation. Tiie giving of a promissory note or check does not extinguish the debt, but an action may be brought for the recovery of the original debt; the party suing being only required to surrender the check or note upon the trial. (Parrott v. Colby, 6 Hun, 55; affirmed, 71 N. Y., 597) Therefore, the receipt of the check in question by an agent authorized to receive the same did not operate as an extinguishment or payment of defendants’ debt. Even if the cheek had been received by the plaintiffs, they had a right to return the check and sue upon the original debt.

The defendants having unlawfully become in possession of the check, the plaintiffs are not required to return the same. The appellant seems to claim that as, if this bill had been paid in cash, Morse would have had the right to receive the same, and although Morse might have converted the money to his own use the plaintiffs could not have recovered from the defendant, the same result follows although the bills in question were attempted to be paid by a check drawn to the order of the plaintiffs and paid to the holder of the check, which was unindorsed by the payee, and to which check the defendants themselves claim the holder had no title.

In support of this proposition is cited the case of Hunter v. Wetsell (84 N. Y., 549), in which case it is distinctly stated that a check in and of itself is not payment, but it may become so when accepted as such and in due course actually paid; that is, in order that a check may operate as payment two things must concur. The check must be accepted as payment, and in due course be actually paid. In the case at bar only one of these necessary elements exists. The check in question was accepted as payment, but it has not in due course been paid. The payment of a check drawn payable to order, and unindorsed, to a party who has received the same from a person who has stolen the check cannot be held to be payment in due course. The case last cited simply recognizes a rule which has been in existence since the origin of commercial paper, and which is fatal to the defendants’ contention in the case at bar..

The judgment appealed from must be afíLmed, with costs.

Bartlett and Lawrence, JJ., concurred.

Judgment affirmed, with costs.