284 Mass. 594 | Mass. | 1933
Allegations of the bill admitted by the answer are these: The plaintiff is a duly organized cooperative bank with its place of business in Lowell. Sihce November, 1927, the defendant has been the owner of unmatured shares of capital stock of the plaintiff, and has been obligated to pay to it stated dues on such shares on or before the regular monthly meetings of the plaintiff. Those meetings were held on a specified Friday of each month. In May, 1930, the defendant borrowed from the plaintiff $500, executed an agreement termed a share loan note for that amount and, as collateral security, pledged his unmatured shares of stock with stipulations as to interest and repayment. The defendant had repaid $300 on this note prior
Allegations of the bill as to which the defendant pleaded ignorance are these: The plaintiff is a comparatively large cooperative bank. In December, 1931, and for some time prior, payments to it of dues, interest and fines amounted to approximately $75,000 monthly divided into about four thousand small payments substantially all made during the week of the monthly meeting and by far the greater portion on the day of the meeting and the Saturday following. More than one third of these payments were made by check. It was a practical impossibility for the clerical force of the bank to list and deposit each of these checks as received, and for a long time it had been the custom of the plaintiff in the regular course of its business to list on the day following its meeting day all checks received on that and the preceding day and deposit them in one of its local banks of deposit on the evening of that Saturday at or near the close of business that evening. That regular course of business had been followed for years with respect to the monthly checks given by the defendant to the plaintiff. Pursuant to that custom the plaintiff deposited on the evening of Saturday, December 12, in the Union Old Lowell National Bank in Lowell checks to the number of five hundred fifty-five including the check received from the defendant on December 11. The Middlesex National Bank, on which the check of the defendant was drawn, was a
The prayers of the bill are that decree be entered in favor of the plaintiff for payment of the note and interest and for other relief.
The defendant, as above recited, having admitted some allegations of the bill and pleaded want of knowledge as to others, further answered that the plaintiff received his check in payment of his debts and did not present it within a reasonable time.
The parties filed a stipulation agreeing in addition to the facts admitted in the defendant’s answer that if the treasurer of the plaintiff were present he would testify to all the other facts alleged in the bill, that the defendant had on deposit in the Middlesex National Bank sufficient funds to meet his check and that his check would have been paid if it had been presented before the closing of that bank at the close of business on Monday, December 14, 1931.
The trial judge found that the defendant’s check was accepted as payment, and that, giving due weight to the usage of the business and the facts of this particular case, there was no failure to present the check for payment within a reasonable time after its issue up to the time the bank on which it was drawn was closed. He found and ruled that thereafter presentment for payment and notice of dishonor were not required. Decree was entered in favor of the plaintiff. The appeal of the defendant brings the case here.
The relevant statutory provisions are G. L. (Ter. Ed.) c. 107, § 209, that “A check must be presented for payment within a reasonable time after its issue or the drawer will be discharged from liability thereon to the extent of the loss caused by the delay,” and § 20, that “In determining what is a ‘reasonable time’ or an ‘unreasonable time’ regard is to be had to the nature of the instrument, the usage of trade or business, if any, with respect to such instruments, and the facts of the particular case.” It was said in Gordon v. Levine, 194 Mass. 418, 421, referring to the provision now in § 20 that it laid down no new rule because the factors there enumerated had always been considered, and that therefore in deciding whether a check was presented within a reasonable time “resort must be had to the rules which have been hitherto established in similar cases. And one of the rules which has been established is, that where the drawer and drawee and the payee are all in the same city or town, a check, to be presented within a reasonable time, should be presented at some time before the close of banking hours on the day after it is issued, and that its circulation from hand to hand will not extend the time of presentment to the detriment of the drawer. If it is presented and paid afterwards the drawer suffers no harm. But if not presented within the time thus fixed, and there is a loss it falls not on him but on the holder.” Cases from many jurisdictions as well as leading text books are there cited in support of that proposition. It was the implication of our own earlier decisions. Taylor v. Wilson, 11 Met. 44, 52. Small v. Franklin Mining Co. 99 Mass. 277, 280. Whitney v. Esson, 99 Mass. 308. Weddigen v. Boston Elastic Fabric Co. 100 Mass. 422, 424. Fernald v.
The express provision of § 20 requires the court in determining what is a reasonable time for presentment of a check to take into consideration “the facts of the particular case.” The facts in the case at bar are that the plaintiff is a cooperative bank. The purpose of such a bank is to accumulate the savings of its members in fixed periodical instalments payable at a specified time in each month and loan such accumulations to its members, with the right to invest funds not so needed in certain other securities. G. L. (Ter. Ed.) c. 170, §§ 2, 13, 21, 22, 23, 26, 27, 32. Lowell Co-op
We are of opinion that the facts of the case at bar do not take it out of the operation of the general rule. It follows that there was failure to present the check for payment within a reasonable time after its issue and that, if it had been so presented, it would have been paid. The general rule laid down in Gordon v. Levine, 194 Mass. 418, and Furber v. Dane, 203 Mass. 108, governs the facts here disclosed.
The trial judge also found that “the defendant’s check was accepted by the plaintiff as payment.” Whether that finding would stand if the check had been presented within a reasonable time, had not been paid and seasonable notice of nonpayment had been given, need not be considered. Weddigen v. Boston Elastic Fabric Co. 100 Mass. 422. Dutton v. Bennett, 262 Mass. 39. If a party receiving a check “is guilty of loches in presenting it, or in giving notice of non-payment, after presentment, and the bank in the mean time suspends payment, he thereby makes it his own, and it shall operate as payment of his debt; the drawer having funds in the bank at the time of drawing the check, and not having withdrawn them.” Taylor v. Wilson, 11 Met. 44, 51. The plaintiff made the check its own, not having presented it for payment within the time permitted by law. Furber v. Dane, 203 Mass. 108, 112. Lowenstein & Bros. v. Bresler, 109 Ala. 326. Sharp v. Fleming, 75 Ark. 556. Brown v. Schintz, 202 ILL. 509. Anderson v. Gill, 79 Md. 312. McFadden v. Follrath, 114 Minn. 85. Kilpatrick v. Home Building & Loan Association, 119 Penn. St. 30. Manitoba Mortgage & Investment Co. Ltd. v. Weiss, 18 So. Dak. 459.
Decree reversed.
Decree to be entered dismissing bill.