11 Paige Ch. 612 | New York Court of Chancery | 1845
This is an appeal from a decree of the late assistant vice chancellor of the first circuit. The object of the bill was to compel The Leather Manufacturers’ Bank to pay a check drawn upon it by E. Sprague, who kept an account in the bank. There is some conflict of testimony as to the times where certain transactions took place, and particularly whether Sprague had instructed the officers of the bank not to pay his checks, at the time the check of the complainants was presented and payment thereof was refused. Upon that question I have no doubt that the assistant vice chancellor came to the correct conclusion. The facts of the case then, are substantially these: Sprague had borrowed money of Peck, and owed him considerable sums for balances upon the purchase and sale of stocks, amounting to $4500; for which amount he gave him a check
There was nothing in the situation of the check of $4500 which rendered it improper for the bank to pay it. But as the holder of that check had waited so long, it is very probable that Sprague hoped he would wait still longer. Sprague might therefore have been disappointed at its being presented for payment on that day. But he does not pretend that there was any agreement between him and Peck that it was not to be presented for payment. And Peck swears to a state of facts which shows that Sprague had no right to presume on his further forbearance. The alleged custom of Wall-street, that an ordinary check, upon a bank, is to be converted into something contrary to its legal effect, by writing mem. in one corner thereof, certainly amounts to nothing. Indeed the weight of the testimony is, that this memorandum amounts to nothing more than an indication of an understanding that the check is not to be presented immediately for payment, so as to destroy the drawer’s credit with the bank when he has not provided funds to meet the draft. Even if there was an express agreement, between Peck and Sprague, that this check should never be presented for payment,
This check having been paid, and properly paid, by the officers of the bank, the fund remaining was insufficient to pay all the other checks which were presented that day, by several thousand dollars. And I know of no principle which gave the complainants a specific lien upon the funds of the drawer of their check} so as to entitle them to a preference, in payment, to the holders of other checks. It therefore became, between the holders of the several unpaid checks, a mere struggle for preference; as all could not be paid. And if Sprague intended to distribute the remaining funds in the bank, rateably among the several holders of the checks, instead of letting some be paid to the exclusion of others, he did right to forbid the payment of any of them, until such an arrangement could be made. All the witnesses agree, too, that it would have been contrary to the usages of banks to have accepted and paid any of the checks, after Sprague had directed the teller not to pay them. I have no doubt, either, from the testimony of the paying, teller, when taken in connection with that of Sprague, that he directed a general suspense of the payment of all his checks, before any were presented for payment, subsequent to the making of the deposit, except the check of $4500, belonging to Peck.
It also appears, by the testimony of Sprague, that the whole amount which was subsequently drawn out, on the check presented by himself, was applied in payment of checks which had been presented for payment on that day. The holders of those checks, therefore, were equally entitled with these com
The decision of the assistant vice chancellor was right; and the decree appealed from, must be affirmed, with costs.