68 Ala. 267 | Ala. | 1880
The first and second instructions requested by the appellant affirm, as matter of law, that if the drawer, and payee and holder of a check are customers of the bank on which the check is drawn, the mere presentment of the check by the holder to the bank, and the noting or entry of it by the bank as a deposit on his bank-book, is not a payment; and if within a reasonable time the bank ascertains the check is an unauthorized over-draft, and offers to return it, there is no liability to the depositor. These instructions could have been properly refused, because they, in effect, withdraw from the consideration of the jury facts which, in any point of view, are very material in determining the liability of the bank for the payment of the check drawn by Hudson, Kennedy & Co. These facts are, that the appellant did not receive for collection checks of which it was the drawee ; and when this check was presented, not only made an entry of it on the book of the depositor, but placed it on the file of checks paid, and to be charged to the drawers, on which checks received for collection were not placed, and subsequently, on its books, charged the drawers, and credited the appellee, the holder, with it. The theory on which the instructions proceed, is that the check was received by the bank for collection, and that it was the mere agent of the appellee, bound only to the use of diligence in obtaining for him payment of it. Whether this theory is true or not, depends upon the intention of the parties, and the facts to which we have alluded are certainly of importance in ascertaining that intention. A court is not bound to give instructions to the jury, even when they affirm correct legal propo-
We do not propose, however, after the very full argument of the important question in controversy, upon this ground to decline its examination. The facts are, that Hudson, Kennedy & Co., cotton factors in the city of Selma, were indebted to the appellee in the sum of one thousand and thirty one dollars, for the payment of which, on Saturday, March 2d, 1878, they gave him a check on the appellant, payable to the order of Burns & Go., the name under which he was doing business. On the ensuing Monday morning at about nine o’clock, the appellee presented the check bearing , his endorsement to the cashier of the appellant with his bankbook. The cashier entered it as a deposit on the bank-book, placed it on the file of checks to be charged on the books of the bank to the drawers, and subsequently on the books the appellee was credited, and the drawers charged with it. It was not the appellant’s course of business to receive, for collection, checks of which it was the drawee, nor were cheeks it received for collection placed on the file on which this check was placed. In the afternoon of that day, Hudson, Kennedy & Co. failed, and on examining their accounts, it was ascertained the check was an over-draft. The appellant endeavored immediately to give the appellee notice, and made an offer to return it on the next day, but the appellee declined to receive it, and claimed, that it was paid, and the appellant liable to him for its amount, as money deposited with it.
There is some contrariety of decision as to the liability a bank incurs, when a check of which it is the drawee is presented, and there is simply an entry of it to the credit of the holder on his bank-book, as a deposit; whether it is to be regarded as paid, or as received for collection. In Morse on Banking, 320, it is said : “ If the bank, as probably happens in the great majority of cases, simply takes the check without especial remark, and notes it in the depositor’s bankbook, thus treating it in every respect as if it were a check upon any other bank, instead of upon itself, these facts do not create a payment, or render the bank liable for the amount to the depositor. The officers having dealt with the check in the ordinary form, have placed, the bank only under the ordinary obligation, to wit: that of collecting the check in the due course of business for the benefit of the depositor. The collection is not complete, and the bank does not become indebted to the depositor for the amount, until the credit has been actually transferred.” There are several adjudged cases
The ease more nearly resembles, and falls directly within the principle stated in Bolton v. Richard, 6 Term, 139, that when a bank credits a depositor with the amount of a check drawn upon it by another customer, and there is no want of good faith upon the part of the depositor, the act of crediting is equivalent to a payment in money. Nor can the bank recall or repudiate the payment, because, upon an examination of the accounts of the drawer, it is ascertained that he was without funds to meet the check, though when the payment was made, the officer making it labored under the mistake that there were funds sufficient.—Chambers v. Miller, 13 Com. B. N. S. 125; Levy v. U. S. Bank, 4 Dall. 234; Oddie v. National Bank, 45 N. Y. 735; (S. C. 6 Am. Rep. 160); National Bank v. Burkhardt, 100 U S. 686. In the case last cited, it was said : “ When a check on itself is offered to a bank as a deposit, the bank has the option to accept or reject it, or to receive it upon such conditions as may be agreed upon. If it be rejected, there is no room for any doubt or question between the parties. If, on the other hand, the check is offered as a deposit and received as a deposit, there being no fraud and the check genuine, the parties are no less bound and concluded than in the former case. Neither can disavow or repudiate what has been done. The case is' simply one of an executed . contract. There are the requisite parties, the requisite consideration, and the requisite concurrence and assent of the minds of those concerned.” And
The Supreme Court of California, in National Gold Bank and Trust Co. v. McDonald, 51 Cal. 64, (S. C. 21 Am. Rep. 697), dissent from the conclusions of Church C. J., in Oddie v. National Bank, supra, and lay down the rule, that when a eheck on the same bank is presented by a depositor with, his pass-book to the receiving teller, who merely receives the eheck and notes it in the pass-book, nothing more being said or done, this does not of itself raise a presumption that the check was received as cash, or otherwise than for collection. The case is variant from this ease, in the absence of the material facts, that it was without the ordinary course of the business, of the bank to receive for collection checks of which it was the drawee, and the entry of the check on the books of the bank, as a debit to the drawer, and a credit to the holder. It is the intention of the parties which must govern, and no intention can be oresumed for, or imputed to them, which is inconsistent with their acts and declarations, and the usual, understood course of the' business they are transacting. And when, as in this case, there is such a concurrence of facts pointing wholly to the creation presently of an unconditional engagement, and of the relation of debtor and creditor, there can be no authority for a presumption of law, which w'ould change the engagement into one dependent on conditions, and the relation into that of mere principal and agent.
The bank could have received the eheck conditionally, and have come under obligations to account to the holder for it, only in the event that on an examination of the accounts of the drawers, it was found they had funds to meet it; or in the event that they provided funds for its payment. Or it could have asked for time to examine the accounts, that it might determine whether it would accept and pay, or dis
If when a check is drawn, the drawer is without funds in
Good faith is an.essential element q| all commercial dealings and should be vigorously exacted! Without intending to adopt, .in the general terms' in which it is expressed, the proposition laid down in Morse on Banking, supra, or in Peterson v. Union Nat. Bank, supra, we are of the opinion that, if the holder of a check has full knowledge that the drawer is without funds in bank to meet it, and has no just reason to believe that the. check will be. honored in the absence of funds, he is wanting in good faith, if he demands and receives paymeut, especially if it is known to him that the drawer is insolvent, and the bank is ignorant of the insolvency. If we were to eoneede the proposition, in the broadest terms in whieh it is stated, knowledge of the want of funds must be traced to the holder. It is fraud which is imputed to him, and the scienter should be clearly proved. The inquiry niay, as in other inquiries involving fraud, authorize a large latitude in the admission of evidence. The relations between the holder and the drawer of the check become matter of pertinent inquiry. Such relations, however intimate, unless connected with some inculpatory facts and circumstances, can not justify the imputation of fraud. Nor can it be a just inference from such relations, that one party claiming a benefit under a contract with the other, has knowledge of every
The only mistake in the transaction was that of the cashier, who saw fit, though he had at hand the means of informing himself, to pay the check without an examination of the accounts of the drawers. There was no mistake as between the holder of the check and the bank. The one demanded, and the other made payment. It may be, if the cashier had examined the state of the accounts of the drawer, the payment would not have been made. But he chose not to make the examination — ha» waived all inquiry. Laches are not mistakes, nor can they be confounded.—Chambers v. Miller, 13 Com. Bench, N. S. 125; Boylston National Bank v. Richardson, 287; Hull v. State Bank, Dudley, (S. C.) 259.
We have considered the rulings of the City Court to which exceptions were reserved, and find in them no error prejudicial to the appellant.
Affirmed.