105 Iowa 349 | Iowa | 1898
— The plaintiff is a corporation of Canada, and is doing business in Chicago, in the state of Illinois. From the first part -of the year 1888, until June, 1893, it transacted business with the Union Stock Yards State Bank of Sioux City, by lending to- it from time to time money for which i.t gave to the plaintiff its certifieateis of deposit, .secured hy promissory notes, which it received in the course- of its business. The notes in suit were taken by it, and -sent to the plaintiff, as a part of the collateral security given on account of two certificates of deposit. The Sioux City bank failed on the tenth day of June, 1893, and this action is for the purpose of recovering of the defendant the amount due on the notes.
The case of Bank v. Zorn, 14 S. C. 444, is sometimes referred to as sustaining the doctrine that money deposited at the plaice at which a bill or note is made payable at the time it is due will have the effect to discharge the note. It appears, that a note was. involved in that case which was by its term® made payable at the office of the payee, who was a cotton factor and commission merchant. The note was transferred by the payee to a bank to be held by it as collateral security, and, under some arrangement between the bunk and the payee, was not presented for payment at the place of payment designated in the note. The maker had a balance with the payee at the time the note matured., sufficient to pay it; and, had it been duly presented, it would have been paid. The maker of the note afterwards affected a settlement with the payee, which included the note. That was not delivered at the time, but the payee agreed to procure it, and send it to the maker, but failed to do so1. It was held that the note was discharged, although no specific reason was given for that conclusion. It may well have been based on the peculiar fact® of the case, since it appeared that the payee of the note was authorized to make collections of notes which it 'had deposited as collateral security, and did so, but failed to apply the collections
A careful examination, of the authorities shows that the case of Lazier v. Horan is almost alone in holding that payment of the amount due on a promissory note to the bank designated therein a,s the place of payment, 'at the maturity of the note, will be effectual as a. payment of it. The great weight of authority is against that rule, and we are constrained to say that it does not appear to ns to he well founded in reason. The specifying, in ia bill or note,.of a place for its payment, is for the convenience of the parties to it, and does not alone create an agency in the penaon who does business at the designated place to receive money for the holder of the paper. It may be necessary to demand payment at the designated place to aid in fixing the liability of the drawer or indorser’s. Byles Bills (7th ed.) 219; Tiedman Commercial Paper, section 310. But that is not necessary to fix the liability of the acceptor or maker, and, as to him, the paper merely does what it purports to do-; that is, it designates a place where payment may be made,, not a person other than the holder to whom it may he made. The effect of the conclusion we reach is to overrule SO1 much of the case of Lazier v. Horan as is not in harmony with what we have