[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 494 The motion to dismiss the complaint upon the ground that it failed to state facts sufficient to constitute a cause of action was properly denied. It alleges that the defendant had in its possession and control the claim or demand against Naser, belonging to Deneken Co.; and that by their directions it had been sent through their agents, McCulloch Co., to the defendant; that it received for Deneken Co. the amount of it, and that immediately thereafter, and while the sum collected was in its possession, the attachment was levied.
The averments as to the levy were that the sheriff "did serve upon the defendant said attachment by delivering to one of the officers of defendant personally a certified copy of said attachment," and notice was then and there given to defendant that the said Peter Bowe, as sheriff, did, by virtue of said attachment, attach the said claim of Deneken Co., and all property of Deneken Co. then in possession of the defendant.
The facts are sufficiently alleged that Deneken Co. owned the claim, and that the amount of it was due them *Page 497 from the defendant. And all other facts requisite to the cause of action were also alleged. (Code, §§ 655, 677).
The objection made, so far as appears, for the first time, on this review, that no sufficient levy of the attachment was made to support the action, is not well taken. This objection seems to have been made upon the ground that the officer sought to levy it upon the check which Naser gave the bank in payment of the draft; and, that as it was not taken into the custody of the sheriff, no effectual levy was made. If such were the fact, and it was available to the defendant, the objection might be urged with some force, as the statute provides that a levy under a warrant of attachment must be made upon a promissory note or other instrument for the payment of money by taking the same into the sheriff's actual custody. (Code, § 649.) But this question is disposed of by the finding of the trial court that the sheriff attached the claim referred to of Deneken Co., and all their property in the possession of the defendant. And as the claim, resulting from the collection by the defendant of the draft, was not capable of manual delivery, the fact of levy, as found, was sufficient. (Id.) And as there was no exception taken to such finding it is not the subject of review here. An exception was essential to raise a question of law, and may have been effectual for that purpose if there was no evidence tending to support the finding. (Id. §§ 993, 994; Sickles v. Flanagan, 79 N.Y. 224;Bedlow v. N.Y. Floating, etc., Co., 112 id. 263.) The evident design was to levy the attachment upon the alleged claim due Deneken Co. arising from the payment of the draft to the defendant.
The main question for consideration is, whether the relation between those parties was such, that the payment to the defendant made the latter a debtor of Deneken Co. by whom the draft was drawn, indorsed and delivered to McCulloch Co. in London. They indorsed and transmitted it to the defendant in New York, where the drawee resided. If it be assumed, as contended by the defendant's counsel, *Page 498 that McCulloch Co. were employed by the drawer to collect the draft, and that such was the unqualified contractual relation between them, there was no privity of contract between the defendant and Deneken Co. In such case McCulloch Co. would be the defendant's principal, and to them it would be responsible. (Colvin v. Holbrook, 2 N.Y. 126; Costigan v. Newland, 12 Barb. 456.) And the payment to the defendant would be treated as payment to McCulloch Co., and they would then become the debtors of their principal on that account.
There is some conflict of authority on the subject of the relation to the holder of business paper, of a party to whom it is transmitted by the individual or bank employed by him to collect it. In some of the states it is held that it is within the implied authority of the collecting agent, when the paper is to be collected at some place remote from that of the business of the collecting agent, so employed, for him to employ a sub-agent in the locality where the party from whom payment is sought may be, to make the collection on account of the holder.
But in this state it is quite well settled that no such authority from the owner of the paper to the party employed by him is implied, and that without some understanding to that effect, or qualifying his liability in that respect, he is deemed to make such selection and employment of another, on his own account, to transact the business of collection. He assumes the responsibility and is alone chargeable to his principal for the conduct, in the premises, of the person or bank so engaged by him, and to whom he transmits the paper for collection. And their relation is that of principal and agent, with the duties and responsibilities incident to such relation. (Allen v.Merchants' Bank, 22 Wend. 215; Montgomery Co. Bank v. AlbanyCity Bank, 7 N.Y. 459; Ayrault v. Pacific Bank, 47 id. 570.) And such is the doctrine of the United States Supreme Court on the subject. (Hoover v. Wise, 91 U.S. 308; Exchange N. Bk. v. Third N. Bk. 112 id. 276.) And so far as the Bank ofOrleans *Page 499 v. Smith (3 Hill, 560), is not in harmony with that view it was disapproved in Montgomery County Bank v. Albany City Bank (supra).
But it does not follow that the correspondent of the collecting agent, unless he has made advances to the latter in good faith upon the paper, can, as against the owner, retain the proceeds of it. The latter may revoke the agency he has conferred, and seek the paper or its proceeds in the hands of such correspondent, or he may follow it and reach them until it or they have found their way into the hands of a bona fide holder, for value, who has taken it from the party clothed with the apparent title. This is an equitable right not necessarily resting in privity of contract with the party from whom such relief is sought. The occasion for it usually arises from the insolvency of his collecting agent, or some other cause rendering such remedy desirable for his protection. (Warner v. Lee, 6 N.Y. 144; Commercial Bank v.Marine Bank, 1 Abb. Ct. App. Dec. 405; Dickerson v. Wason,47 N.Y. 439; F. and M.N. Bank v. King, 57 Penn. St. 202.)
In the present case there was no disaffirmance by Deneken Co. of the agency of McCulloch Co., nor were any steps taken by the former to charge the defendant with the duty or liability to pay directly to them the proceeds of the draft. But whether in such case a claim in the hands of the defendant, subject to levy of the attachment, would result from the collection by it of the draft, is a question, which, in view of the facts as found by the trial court, does not necessarily arise, and the consideration of it is not further pursued here. The court found that Deneken Co. delivered the draft to "McCulloch Co. at the city of London, England, upon the employment to transmit such claim to the defendant, at the city of New York, for collection;" and "that the said firm of McCulloch Co., in pursuance of the employment of Deneken Co., did forward or send to the defendant aforesaid the claim or demand, and did instruct and direct the defendant to collect from said James Naser the said claim or demand;" also, "that in pursuance of such employment the *Page 500 defendant did receive from Deneken Co., through their said agent, McCulloch Co., the aforesaid claim or demand, and after having received the same, the defendant did receive for Deneken Co. the sum of $3,986 in payment of the said claim."
The facts so found are clearly to the effect that McCulloch Co. were employed by Deneken Co. to transmit the draft to the defendant to collect it for the drawer. The consequence of the facts represented by such findings was that McCulloch Co. discharged their duty to the drawer when they transmitted the draft to the defendant with directions to collect it; that such transmission was made through them by Deneken Co., and having made no advance upon it to McCulloch Co., the defendant may be deemed to have collected it as the agent of and for the drawer of the draft, and, therefore, the claim arising from the collection was due to the latter from the defendant. (Bank of Washington v. Triplett, 1 Pet. 25.) In that view the claim was properly subject to the levy made of the attachment. The trial court found, upon the request of the defendant, that "Deneken Co. delivered the bill of exchange to McCulloch Co. for collection as the agents of Deneken Co., and for their account." If this finding essentially differs from the others, the defendant is entitled to the benefit which it may give, as that the most favorable to the defendant, is available in aid of its exceptions. (Bonnell v. Griswold, 89 N.Y. 122.) But all the findings, so far as they resonably can be so construed, must be reconciled. (Green v. Roworth, 113 N.Y. 462.) There is not necessarily any conflict between those findings. The fact that the bill was delivered for collection to the London bankers, as agents of the drawer, is not inconsistent with the other facts as found, that within the agency was the employment to transmit the draft to the defendant for collection, and that the latter received it from Deneken Co. through McCulloch Co.
These views lead to the conclusion that, upon the facts as found, the levy of the attachment was effectually made, and *Page 501 that none of the exceptions to the conclusions of law which the court found or refused to find were well taken. The question of the sufficiency of the evidence to support the principal findings before mentioned, was raised by exception to the denial of the motion to dismiss the complaint.
The motion was properly denied. There was some evidence to permit the finding that it was within the authority of McCulloch Co. to transmit the draft for the drawer to the defendant, and that it was sent accordingly. The evidence of some of the members of the firm was that they sent the draft to the defendant for collection for the firm of Deneken Co., which is neither affirmed or denied by the evidence of Mr. Deneken produced at the trial. And the fact that McCulloch Co. had no account with the drawer of the draft is consistent with that view of the evidence. The question of the weight of the evidence is not here for consideration.
If these views are correct, the judgment should be affirmed.
All concur.
Judgment affirmed.