21 Wend. 372 | N.Y. Sup. Ct. | 1839
By the Court,
A check is a bill of exchange payable on demand. First, it is a bill of exchange. In Boehm v. Sterling, 7 T. R. 419, 426, Lord Kenyon said there is no difference between bankers’ checks and bills of .exchange, and,the same roles apply to- both. In Cruger v. Armstrong, 3 Johns. Cas. 5, 7, 8, Radcliff, J. said, “ It possesses all the requisites of a bill.” Kent, J. said, Checks are, substantially, the same as inland bills, payable to bearer.” In Merchants' Bank v. Spicer, 6 Wendell, 443, 445, Marcy, J. said, “ Checks are considered as having the character of inland bills of exchange.” In Murray v. Judah, 6 Cowen, 484, 490, Sutherland, J. said, “A check is in form and effect a bill of exchange.” These are riot merely dicta ; they were carried, by the cases cited, into their legal consequences. Checks were said to be governed by the same rules as bills of exchange ; that, accordingly, they primafacie belonged to the holder, might be declared on as .bills, were admissible in evidence under the money counts, the drawee was first- to be resorted to, and, the drawer came in aid only, on the drawee’s default. Therefore the check must be presented for payment, before the drawer could be • made liable. These principles are also either directly held, fortified, or illustrated by the following among many other authorities : Chit Jun. on Bills and Checks, 24, Am. ed. of 1834. Ellis v. Wheeler, 3 Pick. 18. Shrieve v. Duckham, 1 Litt. 194. Humphries v. Bicknell, 2 id. 296, 299. Mohawk Bank v. Broderick, 10 Wendell, 304, 307. M’Culloch’s Dict, of Commerce, Checks. 3 Kent’s Comm. 74, 3d ed. Woods v. Shroeder, 4 Harr. & Johu. 276. A degree
Secoldlv, it must be payable on demand. Accordingly, in Brown v. Lusk, 4 Yerg. 216, the bill in question, being payable at a certain day after date, was held not to be a check. This was on the authority of Chitty on Bills, 7th Am. ed. 322, who says, “ Checks are not due before pay
Among the peculiarities of a bill payable on demand are the following: it is payable on presentment; acceptance is therefore out of the question. But marking and-sending to the clearing house is considered as equivalent to acceptance. No .days of grace are allowed, and it must be presented within a reasonable time. M’Gulloch, ut supra. Chit, on Bills, 410, ed. before" cited, with the notes. Chit. jun. 26, a. Presentment within a reasonable time is essential in order to charge the drawer or endorser, and it has been.said, cannot be dispensed with under any circumstances, even where there is a want of funds. Cruger v. Armstrong, ut supra. Edwards v. Moses, 2 Nott & M’Cord, 433. Chit. jun. 31, a. In this, however, the books are by no means uniform. Chitty says it will be excused by whatever will excuse notice. Chit, on Bills, ed. before cited, 423. Commercial Bank v. Hughes, 17 Wendell, 94. It is a well established general rule, though not entirely unshaken by exception, vid. Sage v. Rance, 2 Wendell, 532, that where a condition is for a party’s benefit, he can dispense with it by cutting off all moral possibility of performance. For this 1 refer to the cases cited by me in Harrington v. Higgins, 17 Wendell, 378. It is singular that the ceremonial of presentment should be required where it is apparent, and shown affirmatively, that no evil could possibly arise to the drawer from its omission. Such possible evil is the only reason for insisting on it, and I observe that it was dispensed with in one cáse where a party drew without funds. Franklin v. Vanderpool, 1 Hall, 78. The principle of the Commercial Bank
It lies with the holder, I apprehend, as in all other cases, whether he seeks to charge drawer, or endorser, to show that he has made a .presentment within a reasonable time. Ghitty, jun. 48, a, says the drawer as well as endorser, .is to be considered as a surety, and entitled to claim the strict observance of the ceremony of presentment. Vide. id. 31; a. The contrary was insisted on the argument: and Mogadara v. Holt, 1 Show. 317, 12 Mod. R. 15, S. C. with another case from Comberbach, were cited, to show that the drawer of a bill is, prima facie, the principal. But 1 think we shall see that we ought not to go back to Lord Holt, sitting in the reign of William -and Mary, to test the exact qualities of a bill of exchange. The case cited would apply to the drawer of any other bill, as well as á check ; thus overturning the adjudications and practice of more than a century. All the cases since Holt’s time, not pnly require presentment, in order tp charge the drawer as well as the endorser ¡ but that the holder at the trial must, on his part either show it to have been made, or establish the circumstances which "excuse it. Where it is to be made within a-reasonable time, the holder must, in general, set about.making it, the very next day after he receives the check, whether drawer or endorser is to be charged. The English books expressly put them both on the same footing. Appleton v. Sweetapple, Bayley on Bills, Am. ed. 1836, p. 226, note 46. Bickford v. Ridge, 2 Campb. 537. M’Culloch, ut supra. Chitty, jun. 26 a, 44, 50, 51 a, 52, and the cases there cited. Chitty on Bills, 410, 412. Denham, Ch. J. in Boyd v. Emmerson, 2 Adolph. & Ellis, 184. Bodington v. Schlencker, 1 Nev. &. Mann. 540. 4 Barn. & Adolph. 752. S. C. I desire it to be remarked here, in reference to. what .1 shall have to say of certain dicta, that in the case last cited, the law of presentment of a check, in order to charge the.drawer, was distinctly held to be the same as if the presentment had been made in order to charge the endorser, viz. that it must, Unless some excuse be shown for the delay, be presented, at farthest, the very next day after the creditor re
A great struggle was made at the bar, mainly on the authority of certain dicta, almost entirely to withdraw checks from the rules applicable to other bills of exchange. A remark fell from Mr. Justice Sutherland, in Murray v. Judah, which has been understood by judges in several subsequent eases* and perhaps justly, as recognizing a remarkable exception. After insisting in the broadest language, that a check was in form and effect a bill of exchange, and laying down the rule that demand must be made in order to charge the drawer, he adds, that “ as between the holder of a check and an endorser or third person, payment must be demanded within a reasonable time ; but as between the holder and maker, or drawer, a demand at any time before suit brought, is sufficient, unless it appear that the drawee has failed, or the drawer has in some other manner sustained injury by the delay. These principles are recognized and established by this court in Gruger v. Armstrong, 3 Johns. Cas. 5, and Conroy v. Warren, id. 259.” This distinction-between drawer and endorser was, I perceive, afterwards repeated by Savage, Ch. J. in Mohawk Bank v. Broderick, 10 Wendell, 306, and by Oakley, J. of the superior court of ‘the city of New York, substantially, in Cromwell v. Lovett, 1 Hall, 68; and more distinctly in Elting v. Brinkerhoff, 2 Hall, 463. Marcy, J. in Merchants’ Bank v. Spicer, 6 Wendell, 445, seems slightly to hint at the distinction, though at the outset of his opinion, he repudiates it, and lays down the rule as it is undoubtedly established by direct authority, mercantile practice, and all the writers on commercial law. He says, “ checks are considered as having the character of-inland Bills of exchange, and the holder, if he would pre
The only way to account for the apparent anomaly thus raised and repeated, is by supposing that .as the original remárk was entirely obiter, except-in its premises, viz, that a check is a bill of exchange, the distinction was hastily drawn as the result of the cases cited in its support. They certainly allowed that the plaintiff may insist, as an excuse for delay, that the drawer had no funds, or had withdrawn them; but they went no farther. In Conroy v. Warren, one of them, which was an action against the drawer of the check, who had withdrawn his funds, Thompson, J. in delivering the leading opinion, admits, that "even had the action been against an endorser, the plaintiff might recover, on showing that the defendant had sustained no injury by the delay; and he adds, that in, the case then tinder consideratipn, the drawer having subtracted the fund,- had furnished ground for an interference against his having sustained damage, and drawn the onus of proving actual damage on himself. Kent, J. put the case on the same ground. Both agreed that the check must, in all cases, be presented within a reasonable time, a compliance with which- rule would, in general, require that it .should be presented as soon as possible, under all the circumstances. The two'cases together had gone fully to establish that the check was a bill of exchange, and that the plaintiff might excuse delay, though, in Cruger v. Armstrong, the delay was held to be fatal, notwithstanding the withdrawal of the fund- Murray v. Judah was itself also the case of the drawer not only wanting funds, but soliciting the very delay which he object
To say that the drawer shall be liable on á presentment at any distance of time, unless he can show special damage, has not been held by any case, any cited on the argument at least, since Mogadura v. Holt. This case, indeed, declares that the onus probandi of loss or damage lies on the drawer; and if he show none, he is liable, it certainly goes the whole length of the decision below in the case at bar. It dispenses both with presentment and notice as prerequisites to charge the drawer even of a foreign bill of exchange. It seemed to be cited with considerable confidence, and certainly not without plausibility, as crowning the dicta which have fallen successively from able judges of
The multiplication of anomalies in any branch qf our jurisprudence is an evil, so far as they tend to perplexity and confusion in the application of general rules ; and they are for this reason alone usually avoided, even though individual hardship may'result from steady adherence to a rule. Above - all should they be avoided where they do not even subserve the purposes of right in the particular case.. The rule laid down by the learned judge in Murray v. Judah was perfectly correct when taken in its application to that case ;• and he might, without departing from just legal analogy,-have said the drawer shall not, in a case^like this, be excused even without "any presentment, if he cannot prove that he has suffered by the omission. The drawer Judah had withdrawn all his funds, and tampered with Foote, the forrher holder, to delay presentment; and repeatedly promised to pay, knowing all the facts. Well indeed did the judge say that he had made himself a principal under the circumstances. But if he is to be understood (and this was insisted at the bar,) as going out of the case and saying that as a general rule, the drawer is the principal, he is entirely unsupported by the authorities which he cites. Seymour v. Minium, 17 Johns. 169, is one of them. It decides that the maker of a note is prima facie the principal; and what Bayley J. said in Claridge v. Dalton, 4 Maule & Selw. 222, 3, the
All the cases agree that immediate notice to- the drawer, of presentment;and-non-payment of bills of exchange, is essential to a right of action against him. * .
; We come now directly to the question on which the court below passed. Is notice, of presentment and refusal to pay a check, necessary 1 I trust we have seen clearly, that a check is a bill of 'exchange. A priori, therefore notice should be given. , The drawer was sued in the case at bar, and no want of funds was shown in the hands of the drawee. Does positive authority make an exception ? I have" been through with the cases cited at the'bar, and have looked into several others; and so far from finding any adjudica
In going over the cases, it will be perceived that I have endeavored to anticipate, as far as possible, the grounds assumed by the counsel for the defendant in error, without taking them up and answering them separately. They were, that a check does not become a bill of exchange till it has been negotiated, it not being so as between drawer and holder, for which the dictum in Murray v. Judah, and corresponding dicta in other cases were cited ; that the drawer is a principal, for which another dictum in Murray v. Judah and Mogadara v. Holt were cited, with a less pertinent case, Sarsefield v. Witherly, Comb. 152. The drawer was likened to the maker of a note payable on demand at a certain place, on whom it-is said an actual demand is not necessary ; but he must, at his peril, have funds there and be ready to pay and show this in his defence. Huxton v. Bishop, 3 Wendell, 21. U. S. Bank v. Smith, 1 Wheat. 175. It was added, that the bank having funds is liable in damages, if it refuse to answer the check. Marzetti v. Williams, ut supra.
I will barely add a single remark from a writer, whose book is devoted more directly than any other to the consideration of checks : “ Instead of presenting a negotiable bill, note or check for payment,” says Chitty, junior, “ the holder may, within a reasonable time after he has received it, that is, within the time allowed for presentment, put the instrument into circulation. The transferee has the same privilege ; and the prior parties will not be discharged, if the last endorsee or assignee make a due presentment. But the drawer and earlier endorsers might be discharged, if the instrument were kept in circulation through successive
There is no pretence, on the proof, that the defendant in the case at bar had countermanded the payment of the check at the bank. But it is said that if notice were necessary, as a general rule, yet here is proof of a want of funds in the hands of the bank, which is to be collected thus: the drawee is the agent of the drawer, and therefore his refusal 'is evidence that he had no funds. I have particularly noticed this argument before. It would equally apply to any other bill, and at once overturn the necessity of notice to the drawer in all cases. Indeed, it will be perceived that the misfortune of most of the arguments for the defendant in error, is the proving of so much that we cannot adopt them, without encountering many of the best established and most salutary rules intended to govern the conduct of . parties to this kind of commercial paper. The same remark will apply to another suggestion thrown out in the course of the discussion, though I believe it was not very seriously insisted on : that the commencement of this suit, which it seems followed the demand immediately, was itself a notice within the rule. Beside : the latter argument is involved in a vicious circle; it assumes that notice is necessary as the condition which entitles the holder to sue, but satisfies itself with notice by the commencement of a suit. It has, to be sure, been said, that in case of a precedent debt or duty, the commencement of the suit is a sufficient notice. It would have been
In no view which I am able to take of the question, do I think the decision of the court below can be sustained. The judgment ought accordingly to be reversed, a venire de nova to issue from the court below, and the costs to abide the event.
The Chief Justice and Mr. Justice Bronson concurred in the opinion that the drawer was entitled to notice of the non-payment of the check; but they expressed no opinion as to the degree of diligence necessary on the part of the holder, in presenting and giving notice of the non-payment of the check.
Judgment reversed, and venire de nova.