19 Ind. App. 69 | Ind. Ct. App. | 1898
— Tbis action was begun in the court below by the appellee bank to recover from the appel"lant bank damages for the failure of appellant to perform properly its duty as collecting agent of the appellee in the collection of a draft. A general denial and six special paragraphs of answer were filed, to each of which special answers appellee’s demurrer was sustained. The cause went to trial upon the complaint and the general denial, resulting in a verdict and judgment for appellee, from which judgment appellant has appealed to this court, assigning as its
Appellant insists that the complaint is not sufficient, because of its failure to allege that the drawer of the draft, at the date he drew it, had money, funds, or property in the possession of the drawee, or that he had an arrangement with the drawee to pay the same, or any reasonable expectation that the draft would be honored when presented, or that the drawee Avas indebted to the drawer; that if the'drawer had no means or money in the possession or control of the drawee, he had no reasonable expectation that the draft would be accepted or paid, and that the failure to present the same was not necessary, because ap
Appellant’s learned counsel further urge that the allegation of the complaint that the drawee remained in reputable credit, and continued to do business up to and including the 7th. day of August, 1895, is not sufficient to warrant the conclusion that he was solvent and able to pay said draft; that he might have had reputable credit, and yet lack solvency, and not be able to pay the draft upon the failure of the Roots Company to accept or to pay the same. Citing West v. St. Paul Nat’l Bank, 54 Minn. 466, 56 N. W. 54. We find nothing in this case to support appellant’s position. The foregoing are the only reasons urged in support of this assignment of error. The court properly overruled the demurrer to the complaint.
The second paragraph of answer alleges that, when Stockman drew said draft, he had no money or property in the hands of Roots Company belonging to him or in which he had any interest, nor had he reasonable ground to expect that the drawee would accept and pay the same, which plaintiff at the time well knew, and that said Stockman at the time he drew said draft was indebted to said Roots Company in excess of $3,000.00, which was due and unpaid, all of which was known to the plaintiff at the time of the alleged purchase. This answer attempts to plead that the drawer had no right to draw the draft, and that appellee, at the time it took it knew this fact. The facts alleged do not show a want of right to draw. These averments do not show that the indorsee would not have the right to presume that the drawee would accept the draft for accommodation; it does not show that the indorsee did not have the right to presume that the drawer would place funds in the hands of the drawee. They do not negative the fact that the
The third paragraph of answer is substantially like the second, with the addition of the averment that the indorsement of the draft to appellee was in payment of an antecedent debt, and was not, therefore, a purchase for a valuable consideration. In Stranghan v.
The fourth paragraph of answer admits that the plaintiff and defendant had been corporations organized and doing business at the places as alleged in the complaint; that for more than a year and a half prior to the 29th day of July, 1895, plaintiff each week sent divers drafts drawn by said Stockman and other parties upon the said Roots Company for collection to defendant; that upon receipt of each of said drafts including the one described in the complaint, the defendant immediately gave notice to the Roots Company that it held the same for collection; that during said time no drafts or notes whatever, sent by plaintiff to defendant for collection against said Roots Company, were ever presented for acceptance or payment, and notice given plaintiff (unless defendant was instructed so to do) for nonacceptance or nonpayment, but that the same were held by defendant until paid by Roots Company," ranging any time from four to thirty days from receipt of each collection and after it was due and payable, and that the account of each collection as soon as made by defendant, was forwarded to and received by plaintiff, and no objection made to the delay in making each collection or failure to give notice to plaintiff of any collection paper on account of nonacceptance or nonpayment; and that on July 29, 1895, when the defendant received the draft mentioned in the complaint, it proceeded upon the same course as in former cases (having received no different instructions), and held the same in good faith, believing it would be paid as all others had been by said Roots Company; that plaintiff well knew that it was the custom of the defendant to hold all paper against Roots Company sent by plaintiff for collection
The fifth paragraph alleges that plaintiff, in consideration that Roots Company would pay all collection charges, etc., upon all drafts, etc., sent by defendant for collection against Roots Company, agreed that no such collection papers should be presented and notice given to said plaintiff of nonacceptance or nonpayment, and that the collection and nonpayment thereof might be delayed and held a reasonable time by said defendant, which was done with the draft in suit. This answer is contradictory in its averments. It admits that, under the agreement mentioned, notes and drafts were to be sent for collection; that they were not to be presented, and notice of nonacceptance and nonpayment was not to be given. It further
The sixth paragraph alleges that prior to. July 29, 1895, plaintiff entered into an agreement with E. D Moore, vice president of Eoots Company, who was also president of said defendant bank, that in consideration that said Eoots Company would pay plaintiff interest on all drafts sent by plaintiff to defendant directed to Eoots Company, from the time drafts were received by said defendant until paid, and all charges for 'collecting said drafts, defendant might hold said drafts a reasonable time without notice of nonacceptance or nonpayment; that, in consideration of said agreement, defendant held drafts a reasonable time for payment, without notice to plaintiff of nonacceptance and nonpayment, and the Eoots Company paid defendant all collection charges and said holding of said draft was ratified by plaintiff; that the defendant held the draft in suit as it had held all previous drafts sent by plaintiff on Eoots Company a reasonable time for payment and, while holding said draft, said Eoots
It is* also the law that although the drawer by reason of his want of funds and want of right to draw, remains liable on his indorsement without presentment, demand, or notice, and the indorsee’s right of recourse still exists, yet there is still a liability of the negligent collection agent because of the fact that by his neglecting to present for acceptance, etc., and give notice, he has deprived indorsee of the prompt notice which would or might have enabled him to have prompt recourse on the indorser, thus giving him an opportunity or chance to have obtained payment or security from his immediate indorser before such indorser’s failure, assignment, or bankruptcy.
In Chitty on Bills (12 Am. ed.), *330, it is said: “The death, bankruptcy, or known insolvency of the drawee or his being in prison constitute no excuses, either at law or in equity, for the neglect to give due notice of nonacceptance or nonpayment, because many means may remain of obtaining payment- by the assistance of friends or otherwise, of which it is reasonable that the drawer and indorsers should have the opportunity of availing themselves, and it is not competent to the holders to show that the delay in giving notice has not in fact been prejudicial.”
In Allen v. Suydam, 20 Wend. 320, in which the questions here involved are so ably discussed and
The law does not permit the collecting agent to decide in advance that, because the drawer may have in fact been insolvent, that therefore the indorsee, from pursuit of his rights of recourse, would not have availed. If the collecting agent fails to give his principal and indorsee the benefit of such choice he is liable. Tyson v. State Bank, 6 Blackf. 225; American Express Co. v. Haire, 21 Ind. 4; Chapman v. McCrea, 63 Ind. 360; Exchange Nat’l Bank v. Third Nat’l Bank, 112 U. S. 276; Daniel on Negotiable Instruments, section 329.
The insolvency of the drawer would not necessarily have prevented the collection from the drawer. Insolvency does not mean a total want of property. The insolyent debtor may yet have means to secure or pay the diligent creditor. The answer does not negative the possibility that the drawer might have secured the assistance of friends, or have himself secured the appellee. The presumption is that he was not “financially able to raise the money, means, or credit to pay said draft,” etc.; “that he was without credit or means with which to pay the owner of said draft.” He still may have had property with which he could have secured the draft, or friends who would have come to his relief, or even money with which to pay a part of the draft, so far as anything appears from this answer. Many business men, when unable longer to meet the
“In all these cases, the negligence of the agent, being established, it is a question of damages, and the agent may show, notwithstanding his fault, that his?
The complaint avers that the indorser continued in business, and was of reputable credit, and paid his bills, up to the 7th of August, and that after the draft was returned, it was presented to the drawer, payment demanded of him, and refused. The complaint showed a right to substantial damages, and, as the evidence is not in the record, it must be presumed that the judgment was right on the evidence. Elliott’s App. Proc., sections 709-725, inclusive; Wharton v. Wilson, 60 Ind. 591.
The insufficiency of the special paragraph of the answer is urged by appellee’s, counsel, upon grounds other than tho,se herein referred to, but we do not deem it necessary to consider them. We have not mentioned all the authorities' referred to by the learned counsel for appellant, but they are not in conflict with the authorities herein cited.'1 There is no error. The judgment is affirmed.