App. Div.] First Department, May, 1910. said bill had in the course of business been presented for payment. to the drawee on the 11th day of April, 1905, at Paris, France, and on that day paid by it to the holder thereof; that thereupon the second part was duly protested for non-payment and notice of dishonor given to the drawers, the defendants, and the same remains unpaid; that no request or instructions were given the defendants. by the said J. Palau & Co., or by any other person as to the manner of delivering the said bill to said J. Palau & Co., said bill constituting a remittance by the defendants to said J. Palau & Co. for the payment of a debt due the latter by a third party who placed the defendants in funds for that purpose and instructed them to make the said remittance which defendants undertook to do; that when the first part of said bill was presented to the said drawee for payment and paid by it to the holder thereof it bore several indorsements each following the other, and was to all appearances regular on its face and the drawee paid said bill over its counter in good faith to the person presenting the same in the belief that it was making payment of said bill to the lawful holder thereof, although taking no steps to ascertain the identity of the person presenting the same or the genuineness of the indorsements thereon; that all of said indorsements on said first part of said bill are forgeries and the names of all the indorsees thereon, except that of J. Palau & Co., are the names of fictitious persons. It is further alleged that by section 145 of the French Code of Commerce, then and now in force in the Republic of France where the bill was made payable, it is provided : "Section 145. The party who pays a bill of exchange at its maturity and without opposition is presumed validly discharged." The liability of the defendants is predicated solely on the non-payment of the bill of exchange which they had issued duly protested for non-payment. The action is brought by the assignee and is based upon the protest of the second part of the bill of exchange, the complaint admitting that the first part of the bill of exchange had been paid by the drawee in good faith to a person presenting the same, the indorsement of the payees, however, having been forged. There can be no question but that the law of the place of performance, namely, Paris, in the Republic of France, governed as to the payment of the bill. By the bill in question the drawee of the bill was required to pay to the payees at Paris in the Republic of First Department, May, 1910. [Vol. 138. France the sum specified. As to all the parties to the bill, whether maker, drawer, acceptor or indorser, all matters connected with the performance of the contract are regulated by the law prevailing at the place of performance. (Smith v. Smith, 2 Johns. 242; Spies v. National City Bank, 174 N. Y. 222.) This latter case is reported in 61 Lawyers' Reports Annotated, 193, where there is a valuable note in which all the cases on the subject are collated and the result of those authorities established the rule before stated. This bill of exchange was drawn in at least two parts of even date and tenor. By section 310 of the Negotiable Instruments Law (Gen. Laws, chap. 50; Laws of 1897, chap. 612; re-enacted in the Consol. Laws, chap. 38; Laws of 1909, chap. 43) it is provided: "Where a bill is drawn in a set, each part of the set being numbered and containing a reference to the other parts, the whole of the parts constitutes one bill." Section 315 of the act provides: "Except as herein otherwise provided, where any one part of a bill drawn in a set is discharged by payment or otherwise the whole bill is discharged." Therefore, a valid payment by the drawee of one part of this bill discharged the whole bill. The complaint alleges that this bill was drawn in two parts, one of which parts was actually paid by the drawee to the person presenting it although the payee's name thereon had been forged. If this payment was valid by the law of the Republic of France it necessarily follows that the bill itself was discharged and no liability could be predicated on the refusal to pay the second part as payment of the first part had discharged the obligation to pay the same to the payees. The defendants were liable if at all under section 111 of the Negotiable Instruments Law which provides that the drawer by drawing the instrument engages that on due presentation the instrument will be accepted and paid, and that if it be dishonored and the necessary proceedings on dishonor be duly taken he will pay the amount thereof to the holder. If the drawee pays one part of a bill drawn in a set the bill itself is discharged and, therefore, the bill was not dishonored. The complaint also alleges that the payment of the first part was a valid payment under the French law in virtue of the provisions of articles 144 and 145 of section 9 of title 8 of the French Code of Commerce App. Div.] First Department, May, 1910. then and now in force, and the sections of the said law translated from French into English are set forth in the complaint. By the demurrer the defendants admit these facts. This allegation is, I think, sufficient as an allegation of the law of France that the payment of the first part of this bill was a valid payment and discharged the drawee. The English translation that is given of section 145 of the French Code of Commerce is that the party who pays a bill of exchange at maturity and without opposition is presumed validly discharged. This is the allegation of the French law which is a fact alleged in the complaint and admitted by the demurrer. As I understand the meaning of this section it discharges the drawee from all liability on actual payment of a bill to a person presenting it without regard to the validity of the indorsements thereon. The presumption as to the discharge of the drawee arises from the actual payment to a party presenting the bill at maturity and without opposition. The bill was due and it is alleged and admitted that it was paid without opposition. Therefore, the presumption arises that the drawee was discharged and under section 315 of the Negotiable Instruments Law the whole bill was discharged. We are not dealing with the question as to the discharge of the original debtor from his debt to the payees, the payees not having specified this method of payment of his debt and undoubtedly there would be no discharge of the indebtedness until they received payment. Nor is this action brought to recover any damages that the original debtor of the payees has sustained because of the method adopted by the defendants in transmitting the bill to the payees. The action is brought solely upon the effect of an alleged refusal to pay by the drawees. This liability is based upon the promise of the drawers of the bill to pay to the holder the amount ordered to be paid in the event that the bill is dishonored by the drawee. If the bill was paid by the drawee upon presentation according to the law of the place where payment was to be made, then it could follow that the obligation assumed by the defendants had been met and no action could be based upon the failure to pay the bill when presented, the only obligation that the drawers assumed in drawing and delivering the bill. The liability of the defendants, therefore, depends entirely upon the question as to whether the bill was duly paid on presentation and if the view before stated is correct - that payment by the First Department, May, 1910. [Vol. 138. drawee of the first part of the set discharged the whole bill - there can be no liability upon the obligation assumed by the defendants in drawing and delivering the bill, and if our construction of the allegations of the complaint as to the French law is correct it follows that the whole bill was discharged and the defendants were not liable. The plaintiff contends that as the second part of this bill which is now sued on was the only one delivered to the payees, therefore, as between the drawers and the payees it constituted the only valid existing instrument and that the payees could not be affected by the fate of the undelivered duplicate of the bill. But the bill itself was drawn in a set, and, therefore, all of the parts constituted one bill. The defendants were under no obligation to the payees to transmit a sum of money. The validity of the bill did not depend upon its being received by the payees, but was an existing obligation of the defendants when issued by them and delivered to the post office authorities for transmission; the right of the payees to recover depended not upon their receipt of the bill, but upon a failure of the drawee to pay the bill when presented at maturity and without opposition. If the drawee duly paid the bill when presented according to the law of the place of payment the bill was discharged and no further liability existed upon it, and as the complaint alleges that the drawee did pay one part of the bill when presented to it according to the law of the Republic of France where it was payable, the bill itself having been discharged it would seem to follow that no action could be maintained by the payees against the drawers for a failure to pay the bill. There is no allegation that the drawee was negligent in paying the first part of the set when presented. The complaint alleges that the bill was paid by the drawee over its counter in good faith to the person presenting the same in the belief that it was making payment of the bill to the lawful holder thereof, although before making such payment it did not take any steps to ascertain the identity of the person presenting the same or the genuineness of the indorsements thereon. It is not alleged that an obligation to ascertain the identity of the person presenting the bill or the genuineness of the indorsements was imposed upon the drawee by the law of France and the allegation that the bill was paid in good faith and without opposition under the law of the Republic of App. Div.] First Department, May, 1910. France was, as before stated, a discharge of the drawers from any obligation upon it. It follows that the complaint states no cause of action against the defendants and the judgment should, therefore, be affirmed, with costs. MCLAUGHLIN and MILLER, JJ., concurred; LAUGHLIN and DOWLING, JJ., dissented. DOWLING, J. (dissenting): The defendants herein for value received at the city of New York drew a bill of exchange in duplicate parts of even tenor and date upon the Société Générale of Paris, France, requiring it to pay in Paris, at sight, to the order of J. Palan & Co., a firm of Barcelona, Spain, the sum of 2,500 francs in French currency. Such parts were both mailed on March 28, 1905, to said J. Palau & Co.; one part being sent per "S. S. Baltic," and the other per "S. S. La Bretagne." No instructions had been given by the payees as to the method of delivery of the bill and they were unaware of its existence until the second part thereof was delivered to them through the mail at Barcelona, the said bill having been remitted by the defendants to J. Palau & Co. in payment of a debt due the latter by a third party, who had placed the defendants in possession of funds for the purpose, and had instructed them to make the said remittance, which defendants undertook to do and for which they charged and received from said third party the usual rate of exchange. The first part of said bill of exchange was never received by J. Palau & Co., and when the second part received by them had been duly indorsed and negotiated in the course of business, it was, on April 12, 1905, duly presented by a subsequent indorsee to the drawee for payment, and payment thereof was refused upon the ground that the first part of said bill had, in the course of business, been presented for payment to said drawee on April 11, 1905, and on that date paid to the holder thereof, whereupon the second part was duly protested and notice of dishonor duly given. It is further alleged that when the first part of said bill was presented to the drawee for payment and paid it bore several indorsements, each following the other, and all apparently correct on their face; and the drawee paid said bill over its counter in good faith to |