109 N.E. 179 | NY | 1915
This is an action upon a check drawn on the 17th day of January, 1910, upon the National City Bank of *194
New York by Lathrop, Haskins Company to the order of the defendant and by him indorsed and deposited about noon the next day in his regular account with the plaintiff trust company, which on that day indorsed and transferred the check to the National Bank of Commerce, a member of the New York Clearing House Association. At about 10 o'clock on the morning of the 19th the check in a bundle with other items was delivered at the Clearing House to the messenger of the City Bank and was by him delivered unopened at about 10:30 at the latter's banking house. At about noon on that day, and before the City Bank had had an opportunity to check up the items received through the Clearing House, verify signatures and the like, it received a letter from the drawers of the check stating: "We regret to state that we are forced to suspend. Assignee will be named later." Thereupon it affixed to the check a memorandum reading: "Returned to 23 by the National City Bank of New York, assigned." "23" is the Clearing House number of the National Bank of Commerce, to which the check with the memorandum attached was delivered before three o'clock, and the refund made by the National Bank of Commerce to offset the credit given to it at the Clearing House for the check reached the City Bank before three o'clock. Thereupon the plaintiff was required to pay the check and notice was given to charge the indorser. The constitution of the Clearing House Association, article 10, section 6, provides in part as follows: "All checks, drafts, notes or other items in the exchanges, returned as `not good' or mis-sent, shall be returned the same day directly to the member from whom they were received, and the said member shall immediately refund to the member returning the same the amount which it had received through the Clearing House for the said checks, drafts, notes or other items so returned to it, in lawful money or in Clearing House certificates." Rule 1 provides: "Return of checks, drafts, *195
etc., for informality, not good, mis-sent, guarantee of endorsement, or for any other cause, should be made before three o'clock of the same day." The constitution also provides that between the hours of 12:30 and 1 P.M. the debtor members shall pay to the manager at the Clearing House the balances against them and at 1:30 o'clock P.M. the manager shall pay the creditor members the balances due them respectively. The system adopted by the Clearing House Association to facilitate exchanges and adjust accounts between its members, as shown by the record in this case, is well explained in the opinion of Judge CULLEN in Mt.Morris Bank v. Twenty-third Ward Bank (
The appellant contends that the check was paid and that, if it was not paid, it was not duly presented for payment.
Doubtless the adjustment of balances by the Clearing House constitutes a sort of tentative or provisional payment, but that adjustment occurs without an opportunity to the members to examine the items, verify signatures, compare the amounts with the drawers' accounts, and the like, and regardless of whether the checks are good. The constitution of the association contemplates that the members will directly adjust between themselves claims arising from the return of checks. It thus appears that the question of payment is not, and cannot be, ultimately decided until the bank upon which the check is drawn has had an opportunity at its banking house to examine the checks. The time taken to do that may be estimated from the fact that the face total of the checks sent by the Bank of Commerce to the Clearing House on the morning of January 19th, 1910, was $69,645,514.55, and that the face total of checks sent by the City Bank on that morning was $61,141,008.29. In truth the City *196 Bank refused to pay the check. Its refusal was acceded to by the National Bank of Commerce, which refunded the amount of the credit it had received for the check at the Clearing House. As between the immediate parties to the transaction then there was plainly no payment, but, although claiming not to be bound by the constitution and rules of the Clearing House Association, the appellant contends that payment resulted perforce of them. That argument is based on the construction given to section 6 of article 10, above quoted, to the effect that only checks "not good or mis-sent" may be returned, and it is claimed that that provision of the constitution could not be modified by a rule which contemplates the return of checks for any cause. It is urged from those premises that the adjustment of accounts at the Clearing House constituted payment unless the check was in fact "not good," and that the burden was upon the plaintiff to show that fact, if it were the fact.
We do not consider it necessary to construe the constitution and rules of the Clearing House Association which is a mere agency adopted by its members to facilitate exchanges and the adjustment of accounts as between themselves. We agree with the contention of the defendant that he was not bound by the rules of the association to which he did not belong. Neither could he claim the benefit of them. (See Merchants' National Bank v.National Bank of the Commonwealth,
It may be assumed that the banking house of the City Bank was the proper place of presentment. (Section 133 of the Negotiable Instruments Law.) The check was in fact presented at that place through the Clearing House. Although the point does not appear to have been expressly ruled upon in this state, it has been assumed in many cases that presentment through the Clearing House is sufficient. (Turner v. Bank of Fox Lake, 4 Abb. Ct. App. Dec. 434; Johnson v. Bank of North America, 5 Robt. 554, 594;Burkhalter v. Second National Bank of Erie,
It is unnecessary to consider whether the evidence relating to the second presentment at the counter of the City Bank presented a question of fact.
The judgment should be affirmed, with costs.
WERNER, HISCOCK, CHASE, COLLIN, HOGAN and CARDOZO, JJ., concur.
Judgment affirmed.