General American Life Insurance v. Stadiem
25 S.E.2d 202
N.C.
1943
Check Treatment
Stacy, C. J.

Tbe question for decision is whether tbe complaint states facts sufficient to constitute a cause of action, either in contract or in tort. C. S., 511, subsec. 6. Tbe office of a demurrer is to test tbe sufficiency of a pleading, admitting for tbe purpose tbe truth of factual averments well stated and such relevant inferences as may be deduced therefrom, but it does not admit any legal inferences or conclusions of law asserted by tbe pleader. Leonard v. Maxwell, Comr., 216 N. C., 89, 3 S. E. (2d), 316; Harris v. R. R., 220 N. C., 698, 18 S. E. (2d), 204. Hence, we must look to tbe allegations of tbe complaint to ascertain tbe questions presented.

I. The ActioN IN OontRact.

Tbe plaintiff seeks to recover in contract on tbe allegation that “tbe defendant Bank is indebted to tbe plaintiff in tbe sum of $21.38, tbe face amount of said cbeck.” This is a mere conclusion of tbe pleader, and it is not supported by tbe facts alleged. In tbe absence of an acceptance or agreement to pay Cauley’s check, tbe Bank assumed no liability to tbe plaintiff or its agent, tbe payee named therein. Perry v. Bank, 131 N. C., 117, 42 S. E., 551; Bank v. Bank, 118 N. C., 783, 24 S. E., 524, 32 L. R. A., 712, 54 Am. St. Rep., 753. “Tbe transaction of giving tbe cbeck does not . . . substitute tbe checkholder for tbe drawer. The latter may maintain an action for tbe breach of tbe contract to honor bis check, and if tbe bolder has a similar right, tbe result is, that two persons may maintain separate actions upon tbe same instrument at tbe same time to recover against tbe same defendant as a principal debtor. . . . Tbe bank’s agreement with tbe depositor involves or implies no agreement with tbe bolder of tbe cbeck. . . . Being liable to *52 the drawer to account with him for failure to honor his check, the bank cannot, on either legal or equitable considerations, be held at the same time liable to the holder of the check” — Spear, J., in Cincinnati, Etc., R. Co. v. Bank, 54 Ohio St., 60, 31 L. E. A., 653, 56 Am. St. Rep., 100, quoted with approval in Perry v. Bank, supra.

In First National Bank v. Whitman, 94 U. S., 343, cited by Walker, J., in Trust Co. v. Bank, 166 N. C., 112, 81 S. E., 1074, as authoritative, it is said: “We think it clear, both upon principle and authority, that the payee of a check, unaccepted, cannot maintain an action upon it against the bank on which it is drawn.” Dawson v. Bank, 196 N. C., 134, 144 S. E., 833.

Indeed, it is provided by 0. S., 3171, that a check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder unless and until it accepts or certifies the check. Brantley v. Collie, 205 N. C., 229, 171 S. E., 88.

Such is the law as it obtains with us in respect of checks, albeit we have in a number of cases held that “where a contract between two parties is made for the benefit of a third, the latter may sue thereon and recover although not strictly a privy to the contract.” Rector v. Lyda, 180 N. C., 577, 105 S. E., 170; Gorrell v. Water Supply Co., 124 N. C., 328, 32 S. E., 720. These latter cases are grounded on principles of equity, not presently applicable to the plaintiff’s suit. The arguments, pro and con, on the subject are fully set out in Cincinnati, Etc., R. Co. v. Bank, supra, and the reasoning of the majority view quoted with approval in Perry v. Bank, supra.

It is suggested, however, that the basis of the minority view was followed in Cauley v. Ins. Co., 219 N. C., 398, 14 S. E. (2d), 221, where it was said that if the “final cash returns” were still rightfully available to plaintiff’s agent, the judgment of nonsuit would seem to be at variance with the rights of the beneficiary named in the policy. The expression, “final cash returns,” was a quotation from the receipt issued by plaintiff’s agent, and the thought prevailed that if the insured had in reality given a valid check for his premium in accordance with their previous custom, the policy ought not to be forfeited without an opportunity to make good the “final cash returns.” Indeed, the premium check was collectible, if not collected, in that suit.

Hence, according to the law as it obtains in this jurisdiction, the facts stated are not sufficient to constitute a cause of action against the defendant Bank for the amount of the check.

II. The AotioN IN ToRt.

It follows from what is said above that the demurrer to the complaint' on the cause of action sounding in tort was likewise properly sustained. *53 If a bank be not liable to tbe bolder of a ebeok “until and unless it accepts or certifies tbe check,” tbe payee bas no right of action against tbe bank on an unaccepted or uncertified check, for be is in no position to allege a breach of legal duty, and no action at law can be maintained except there is shown to have been a failure in tbe performance of some legal duty. Diamond v. Service Stores, 211 N. C., 632, 191 S. E., 358; Hood, Comr. of Banks, v. Bayless, 207 N. C., 82, 175 S. E., 823.

Moreover, tbe proximate cause of plaintiff’s loss was not tbe negligent dishonor of tbe premium check, but tbe subsequent independent act of tbe plaintiff in refusing to pay tbe insurance. Butner v. Spease, 217 N. C., 82, 6 S. E. (2d), 808. True, there is allegation that plaintiff was induced to decline payment of tbe policy by tbe careless misrepresentations of tbe Bank, nevertheless tbe plaintiff’s refusal to pay was tbe result of its own voluntary election, “acting with an independent mind.” Bearden v. Bank of Italy, 57 Cal. App., 377, 207 Pac., 270.

Tbe definition of proximate cause requires a continuous and unbroken sequence of events, and where tbe original wrong only becomes injurious in consequence of tbe intervention of some distinct wrongful act or omission on tbe part of another or others, tbe injury is to be imputed to tbe second wrong as tbe proximate cause, and not to tbe first or more remote cause. Cooley on Torts, sec. 50; Butner v. Spease, supra.

Tbe rule is, that if the original act be wrongful, and would naturally prove injurious to some other person or persons, and does actually result in injury through the intervention of other causes which are not in themselves wrongful, the injury is to be referred to the wrongful cause, passing by those which are innocent. Scott v. Shepherd, 2 Bl., 892 (Squib Case). But if the chain of causation be broken by tbe intervention of some efficient, independent cause, such intervening cause is to be regarded as tbe proximate cause of tbe injury, and in an action against tbe original wrongdoer the law will not undertake further to pursue tbe question or resulting damage. McGhee v. R. R., 147 N. C., 142, 60 S. E., 912, 24 L. R. A. (N. S.), 119. “In jure non remota causa sed próxima spectatur. It were infinite for tbe law to judge tbe cause of causes, and their impulsions one of another; therefore it contentetb it selfe with tbe immediate cause, and judgetb of acts by that, without looking to any further degree.” Bacon’s Maxims, I; Newell v. Darnell, 209 N. C., 254, 183 S. E., 374. To avail tbe original wrongdoer as a defense, however, tbe intervening cause must be both independent and responsible of itself. Hartón v. Tel. Co., 146 N. C., 429, 59 S. E., 1022; Watters v. City of Waterloo, 126 Iowa, 199, 101 N. ~W., 871.

In searching for tbe proximate cause of an event, tbe question always is: Was there an unbroken connection between tbe wrongful act and the injury, a continuous operation? Do the facts constitute a continuous *54 succession of events, so linked together as to make a natural whole, or was there some new and independent cause intervening between the wrong and the injury? Milwaukee and St. P. Ry. Co. v. Kellogg, 94 U. S., 469, 24 L. Ed., 256. Many causes and effects may intervene between the original wrong and the final consequence, and if they might reasonably have been foreseen, the last result, as well as the first and every immediate consequence, is to be considered in law as the proximate cause of the original wrong. But when a new cause intervenes, which is not itself a consequence of the first wrongful cause, nor under the control of the original wrongdoer, nor foreseeable by him in the exercise of reasonable prevision, and except for which the final injurious consequence would not have happened, then such injurious consequence must be deemed too remote to constitute the basis of a cause of action against the original wrongdoer. McGhee v. R. R., supra; Ramsbottom v. R. R., 138 N. C., 38, 50 S. E., 448.

Here, the causal connection between the Bank’s negligence and the plaintiff’s ultimate loss was broken by an independent and responsible cause. The damages claimed are in no legal sense the proximate cause of the negligence alleged. “There was an interruption and the intervention of an entirely separate cause, which cause was an independent human agency, acting with an independent mind.” Hartford v. All Day and All Night Bank, 170 Cal., 538, 150 Pac., 356, B. R. A. 1916-A, 1220. The damages alleged are too remote. Bowers v. R. R., 144 N. C., 684, 57 S. E., 453, 12 L. R. A. (N. S.), 446; 62 C. J., 1115.

It results, therefore, that the demurrer was properly sustained on both causes of action.

Affirmed.