Honig v. Pacific Bank

Temple, J.

— This action is brought upon six certificates of deposit, made, executed, and delivered to the plaintiff by the defendant. They are all in the same words, except as to date and. amount. The following 'is a copy of the first issued: —

“$250. No. 3,289.
“Pacific Bank, N. W. cor. San some and Pine Streets—
Series B.
“ San Francisco, January 19, 1885. '
“ N. Honig has deposited in this bank two hundred and fifty dollars in gold coin, payable to self or order on the return of this certificate properly indorsed.
“ M. W. Upton, Teller.
“ S. Gr. Murphy, Cashier.”

The deposits were in fact made by one S. A. Peyser, who was the clerk of the plaintiff, and the certificates were delivered to him. When he made the deposits, Peyser demanded certificates, and wrote in the register of certificates of deposit, under the head of “ To Whose Order,” “ N. Honig, by S. A. Peyser,” and the money was -paid to him on each and all of the certificates. Honig had for many years been a well-known business man in San Francisco, but he had never had dealings with the defendant other than to collect money on checks on the bank; and it does not appear, otherwise than by the register and the issuance of the certificates, that the officers of the bank ever knew of his existence.

Peyser was in the employ of Honig, and was intrusted with the collection of moneys, but Honig did not authorize him to make these or any deposits with the bank; *466did not in fact, know of the deposits, or that any certificates had been issued, until long after the certificates had been paid to Peyser, as before stated. Of course Peyser had no authority from Honig to indorse the certificates, or to obtain the money upon them. Some time after their payment, Honig discovered the fact, and brought this suit upon the certificates, although they had been so paid, and had in fact been surrendered by Peyser to the bank, and were still in possession of the bank.

As to the register of signatures, the cashier testified as follows: “ The register book of certificates of deposits is a signature book, or book of identification, which is placed before a person making a deposit in this way, and in which he writes his name then and there; and opposite to that man’s name is the amount that the certificate is issued for and the number; and on the return of that certificate to the bank, the paying teller is required to examine and compare the signature of the indorsement with the signature of the party depositing the money; and if that signature is not genuine, and has not the appearance of being genuine, and written by the party who deposits the money, payment is refused upon it,”

It is contended that a certificate of deposit is a form of deposit by one with whom the bank has not a regular account; that the depositor, on leaving his money, leaves also his signature, thereby designating upon what indorsement the money may be withdrawn; that the contract really is to pay'upon the surrender of the certificate indorsed by the same person, and in the same way that the register is made in the certificate, of deposit book. But the trouble with this contention is, that the certificate is á negotiable instrument. On their face, the certificates sued on are payable to N..Honig or order. The register is a private book kept by the bank for its own convenience and protection. It forms no part of *467the negotiable instrument issued by the bank. If an indorsement is required, the character of it is indicated on the face of the paper itself, which is expressly made payable to Honig or order.

The exigencies of the defendant’s case would require us to hold that,—1. Had Honig presented in person the instrument which is expressly made payable to him or order, the bank could have properly refused payment, and that upon such refusal no action would lie on the part of Honig against the bank; 2. That had Honig assigned the certificate for a valuable consideration, the assignee could not have obtained the money, although by law it is negotiable, and is expressly made payable to Honig’s order; 3. That Peyser could have indorsed Honig’s name, and demanded the money, although the defendant knew he was no longer in the employ of Honig, and that Honig expressly protested against his authority to indorse his name, or to receive the money for him; that is, that Peyser was able without Honig’e knowledge or consent to constitute himself Honig’s agent, and that the agency was irrevocable; and 4. In case of Honig’s death, his administrator could not get the money, but Peyser could still obtain it; and in case of his death, his administrator, too, could have drawn the money.

If I send my messenger boy to make a deposit for me, and he discloses his principal, and the certificate is issued payable in terms to me, the contention is, that I cannot collect the money until I cause my own name to be indorsed on the certificate by the boy, who at the time may be in Hong-Kong. This cannot be so. If the bank keeps a certificate book for its protection, its officers must see to it that they get the right signature in the book. It cannot, by taking the wrong signature, prevent the true owner from getting his money on demand.

There is no contract, express or implied, that the certificate was payable only when indorsed according to the *468signature in the register. The certificate of deposit register is evidently a mere private book, whose contents cannot concern the holder of a negotiable certificate; but if it were otherwise, it is difficult to discover how it could help the defendant. For, after all, this book only shows the number of the certificate, the amount for which it was drawn, and to whose order it was made payable, which in this case was Honig. The cashier is presumed to know that no act of his could authorize Peyser to act as Honig’s agent; and that if Peyser had then been the agent of Honig, it was competent for Honig to withdraw the agency at any time.

It is said that a person may deposit in a fictitious name, or may give any name he chooses at the bank; so he may represent himself as the agent of a fictitious principal, and in such case he can draw the money in the name in which the deposit was made. Let this be admitted. It does not cover this case. Here the principal was not fictitious. The bank cannot assume that a named principal is a fictitious person, or if it does so, it will be at its peril. (Morgan v. Bank of State of New York, 1 Duer, 434.) The fact that the certificates were in the possession of the defendant is immaterial. They had been executed and duly delivered,to the plaintiff through his agent. The defendant came into possession of them wrongfully, and without having paid them to plaintiff or his order.

It is said that plaintiff cannot recover the full amount of all the certificates, for he has not shown that defendant received more than three hundred dollars altogether. This is upon the theory that Peyser may have drawn the money on the first certificate, and redeposited it, or some of it, to purchase the second certificate, and so on. This would perhaps have been a tenable position if Honig had sued for money had and received, ignoring the certificate on the ground that the deposit was not authorized by him. But there can be no doubt of the *469proposition that plaintiff was at liberty to ratify the unauthorized act of his agent, and sue on the certificates, and that he could do this without authorizing Peyser to indorse his name upon the certificates. They were entirely distinct transactions. The action, then, was brought upon several negotiable instruments, each of them reciting the exact amount of money received from Honig, and promising to pay the same to Honig or his order. None of them have been paid to plaintiff or his' order, or to his agent. When plaintiff proved the execution and delivery of the instruments, and that they had not been paid, he made out his case. All that appears in answer to this is, that under the peculiar circumstances of this case it is possible that only three hundred dollars of Honig’s money was received by the bank. We cannot disturb the finding of fact of the trial court, on the ground that upon the evidence it is possible that the defendant did not receive so much of the plaintiff’s money. The burden of proof was clearly shifted to defendant.

The defendant having possession of the certificates, the plaintiff was not required to produce and surrender them; but if that were necessary, it was done when the defendant was compelled to produce them, and submit them to the court. Having come into the possession of them unlawfully, defendant held them for the plaintiff.

The judgment and order should be affirmed, and it is so ordered.

Searls, 0. J., McKinstry, J., and Sharpstetn, J., concurred.