Opinion
March, 1906.
Leventritt Brennan (Alfred Holbrook, of counsel), for appellant.
Steuer Hoffman (Max D. Steuer, of counsel), for respondent.
The plaintiff sues upon a certified check. In February, 1903, there existed a firm known as Hayman Co., the members of which were Julius Hayman and Frederick Heyman. On February 9, 1903, Frederick Heyman applied to one Charles Rosenberg for an advance of money, asking for it in the name of Hayman Co. Certain contracts were entered into between Rosenberg and Heyman, acting for and in the name of Hayman Co., which resulted in the assignment to Rosenberg of certain outstanding accounts due to Hayman Co., and the delivery by Rosenberg to Heyman of a check on defendant for $875 to the order of Hayman Co. Heyman had the check certified by defendant and then passed it to one Gernsheimer, who paid the amount in cash. Gernsheimer deposited the check in the Mechanics Traders' Bank, receiving credit for it upon his account. It passed through the clearing-house and came back to defendant and was stamped with two stars, the mark commonly used by defendant to indicate that a check had been paid. At some time, the record does not clearly show when, upon a statement by Julius Hayman that Frederick Heyman was not a member of the firm and that his indorsement of the firm's name upon the check was a forgery, the defendant bank recredited Rosenberg, the drawer, with the amount of the check and made demand upon the Mechanics Traders' Bank for a refund. The latter bank did refund the money and received back the check. In turn, Gernsheimer reimbursed his bank and received back the check and, later, Frederick Heyman repaid Gernsheimer and became repossessed of the check. After holding it about fourteen months, Frederick Heyman transferred the check to the plaintiff for value. Without going into all the particulars, we may say that, under the circumstances attending the transfer of the check to plaintiff, we think he was put on his notice that there might be defenses and that his position is no stronger than would be that of Frederick Heyman. Cowing v. Altman, 71 N.Y. 440. Although Julius Hayman claimed that Frederick Heyman was not a member of the firm of Hayman Co. at the time the check was given, it has since been conclusively established, by a judgment of the Supreme Court, that Frederick Heyman was, in fact, at that time a member of the firm. As between the firm and third parties, therefore, he had authority to transfer firm assets, to receive payment therefor and to indorse the check drawn to the order of the firm. If, therefore, Rosenberg and the defendant bank had elected to stand and rely upon his assignment of the accounts and his indorsement of the check, their position would have been impregnable as the event turned out. But, in all that Heyman did in the matter, he acted, not as an individual, but as a member of, and in the name and behalf of, the firm. Hayman also was a member of the firm, had at least the same right to act for it and represent it that Heyman had and had precisely the same right to rescind contracts made by the firm that Heyman had to make them. He elected to rescind them. While no formal rescission of the assignment of the accounts to Rosenberg was shown, there was ample evidence of a practical rescission under which Heyman collected the accounts. The certification of the check, after the Mechanics Traders' Bank and Gernsheimer had been eliminated by repayment, constituted, if it remained effective at all, an obligation on the part of the bank to Hayman Co., and not to Frederick Heyman, individually. Julius Hayman had been the effective cause of the return of the check by the defendant bank and its recrediting the account of Rosenberg with the amount. This, certainly, estopped him and the firm of Hayman Co., in whose behalf he acted, from asserting any claim against the bank upon its certification. Further than this, the check, and whatever right against the bank it represented, when it came back into Frederick Hayman's hands, remained, as it had been when he received it, the property of the firm of Hayman Co. On February 19, 1904, Julius Hayman was appointed receiver pendente lite of the copartnership; and, on April fourth, the firm was judicially dissolved and Julius Hayman appointed receiver of its assets. Both of these events long antedated the transfer of the check to the plaintiff and, after the dissolution, Frederick Heyman had no right to deal with the firm assets, except to turn them over to the receiver, and had no authority to assert any claim based upon the check or the certification, or to invest any one else with such a claim. Since the circumstances surrounding the transaction were sufficient to put plaintiff on his inquiry, he can no more succeed than could Frederick Heyman.
O'GORMAN and NEWBURGER, JJ., concur.
Judgment affirmed, with costs.