Nassau Bank v. . Nat. Bank of Newburgh

[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] I think that the case was correctly decided and that little need be added to what has been already said. The circumstances were very peculiar with respect to the draft for $6,000, which Taylor caused to be collected and placed to his credit. The payee, Currie, had no knowledge of, nor interest in it, as he testified, and it would appear that his name had been made use of in some way and for some purpose, which are not explained. Whether, however, the draft was made payable to a fictitious payee, though an existent person, and hence, as one payable to bearer, was effective to pass title to its proceeds when collected by the plaintiff bank, is a question which might well admit of assertion and discussion upon the facts. (See Coggill v. The American Exchange Bank, 1 N.Y. 113; Phillips v.Mercantile Nat. Bank, 140 ib. 556.) But it is unnecessary, when the decision of the case may rest upon plain and well-settled legal propositions. The situation may be said to be, in certain aspects, new; but I see no good reason for denying to it the application of the rule that when money has been received by a person in good faith, in the usual course of business and for a valuable consideration, it cannot be pursued into his hands by one from whom it has been obtained through the fraud of a third person. If it has been used, as it is claimed in the present case, to pay an indebtedness owing by the third person, with innocence in the recipient, there is a consideration for its payment by him, which, despite the fraud through which the money was obtained and for reasons based upon policy and the need for such security in ordinary commercial transactions, supports and protects its possession against the world. The following cases establish and will illustrate the application of these principles: Justh v.Nat. Bank of Commonwealth (56 N.Y. 478); Stephens v. Boardof Education (79 ib. 183); Hatch v. Fourth National Bank (147 ib. 184).

But it is the claim of the appellant that, conceding the doctrine of the cases, it is not available in the present case, for the reason that the money paid into the Newburgh Bank by Taylor was not received, nor accepted, by it with knowledge of his forgeries. It is argued that the mere deposit by Taylor of the money, without the knowledge of, or the acceptance by, his creditor, could not constitute payment within the rule. I am unable to recognize the force of the contention. Taylor was a debtor by reason of his forgeries, as well to those who were injured in their property rights thereby, as to the law for his criminal act, and it is of no conceivable importance, in my opinion, that the existence of the fact of indebtedness should be unknown, at the time when he sought to make reparation by repaying the moneys feloniously taken. Having made the payment, he could not reclaim it and no interest in the moneys remained in him. It satisfied the claim, which the bank, undoubtedly, possessed against him and discovery, or knowledge, of such a claim was not necessary to its existence. Nor is it of consequence, as to how the payment operated in its mode. He conceived that he had despoiled the Adderton estate and, therefore, made the payment in such form as to reimburse it; but the fact was that the bank's claim against him was satisfied and that the credit of the amount to the estate upon the account in the bank's books satisfied the claim of Adderton's executors. The bank received the money lost through the forgeries and it became the debtor of the executors for the money received. Taylor's plan, evidently, was to make restoration in such a form as that his forgeries would not be exposed. I think Mr. Justice CULLEN, who delivered the opinion at the Appellate Division, admirably expressed it, when he said: "Where one person defrauds another so skillfully that the party defrauded is ignorant of his loss, and restitution is made so adroitly that it does not disclose the original offense, does any different rule obtain from a case where one confesses his fault and openly makes restitution? We apprehend that there can be no distinction between the two cases and that the very statement of the question precludes the possibility of but one answer."

I think that the judgment should be affirmed, with costs.

All concur.

Judgment affirmed.