223 P. 547 | Cal. | 1924
Plaintiff brought this action to recover from the defendant the sum of $1,050, with interest, the amount evidenced by a certain certificate of deposit made and delivered by the defendant to the plaintiff. Judgment was entered for the defendant, and plaintiff has appealed.
On the eleventh day of December, 1920, appellant held an interest-bearing certificate of deposit for $1,050, issued to him by the First National Bank of Gridley. The certificate became due on that date, and appellant, desiring to transfer his account, indorsed the certificate over to the Gridley bank and received for the one surrendered an ordinary certificate of deposit for the same amount, payable on demand. In the afternoon of the same day, which was a Saturday, appellant took the new certificate to the First National Bank of Marysville, indorsed it to the bank, and received in exchange an interest-bearing certificate of deposit of the Marysville bank, in a similar amount, payable six months after date. Respondent mailed the certificate of the Gridley bank to the Rideout Bank, its correspondent in Gridley, for collection. It was received by that bank on Monday, the 13th of December, and, on the same afternoon, was presented to the issuing bank for payment. Instead of demanding and receiving cash, the Rideout Bank surrendered the certificate of deposit, and accepted from the First National Bank of Gridley an exchange draft on *186 the Anglo London-Paris National Bank of San Francisco, which it indorsed and mailed to the Marysville bank. Respondent did not notify appellant that it had the check of the Gridley Bank but, in turn, indorsed and mailed it to its San Francisco correspondent, the Mercantile Trust Company. The draft was presented by the latter bank, through the clearing-house, to the Anglo London-Paris National Bank, where it was dishonored. It was then returned to respondent, without having been paid, and was received by it on December 17th. On the same day respondent notified appellant of the dishonor of the draft, and on the same day the First National Bank of Gridley closed its doors and went into the hands of a receiver at the end of the day's business. After six months had elapsed appellant presented the certificate of deposit issued to him by the Marysville bank to the respondent for payment. Payment being refused, this action was commenced.
The complaint sounds in contract. It states a cause of action based on the certificate of deposit issued by the respondent to appellant, and the refusal of respondent to pay the amount on demand. The allegations of the complaint and the denials of the answer presented an issue based on the theory that the relation subsisting between appellant and respondent was that of creditor and debtor. (Plumas Co. Bank v. Bank of Rideout etc.,
[1] "It is elementary doctrine that 'an agent authorized merely to collect a demand, or to receive payment of a debt, cannot bind his principal by any arrangement short of an actual collection and receipt of the money.' Ward v. Evans, 2 Ld. Raym. 928; Ward v. Smith, 7 Wall. 451 [19 L.Ed. 207, see, also, Rose's U.S. Notes]; Pitkin v. Harris,
[4] In reaching a determination of the present controversy between appellant and the First National Bank of Marysville, the connection of the Rideout Bank at Gridley with the transaction may be eliminated. Under the accepted rules of law laid down by the authorities, the latter was negligent in the first instance in surrendering the certificate of deposit to the First National Bank of Gridley and accepting the check or draft of that bank on its San Francisco correspondent. The Rideout Bank should have insisted on, and received, nothing but money in return for the surrender of the certificate. Had it done so, we may assume no loss would have resulted in this particular case, for the evidence is uncontradicted that on the thirteenth day of December, 1920, and for several days thereafter, the First National Bank of Gridley was paying its obligations in cash when demanded, and that if the Rideout Bank on that day had demanded cash in return for the certificate of deposit, cash would have been paid. [5] It is not disputed here — in fact, we may safely assume from the record — that respondent in good faith employed a suitable subagent at Gridley for the purpose of making the collection. It is, therefore, not liable for the default or neglect of the Rideout Bank. (Nicoletti v. Bank of Los Banos,
Respondent's position is that the certificate of deposit taken by it from appellant was presented by it for payment without delay, and that the collection was handled by it in the ordinary course of business. It cites the sections of the Uniform Negotiable Instruments Act, which relate to the time within which a check must be presented for payment, and which provide that checks must be presented within a reasonable time, and 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." (Civ. Code, secs. 3265b and 3266b.) Respondent's contention that the certificate of deposit was promptly presented for payment is not disputed. Its position is perhaps better understood when it says in its brief: "Perhaps the majority of the banks in the interior of the state carry only a limited amount of coin or paper money. They have their correspondent in San Francisco and the matter goes through the clearing-house in San Francisco and is adjusted." In other words, respondent is seeking recourse to a custom or usage of the banking business to relieve it from liability in the present case.
[6] As a general proposition of law, it is, of course, true that every commercial contract is entered into with the understanding that usage in regard to the particular matter of the contract becomes a part of the transaction itself. (National Bank v. Burkhardt,
[7] In order to be of binding force in contracts, the custom or usage must be general as to place and not confined to any particular bank or banks. (San Francisco Nat. Bank v. AmericanNat. Bank, supra.) The respondent did not plead, by way of defense to appellant's action, that it had followed any general usage or custom in making the collection, or that any such usage or custom existed in the community where it had its place of business, or where the *191 collection was to be made. There is not a particle of evidence in the record that respondent followed any custom or that one exists. The court below made no finding on the subject. This court does not know, therefore, and cannot assume, that there is any such custom or usage as that relied on by the respondent. It was incumbent on the respondent to clearly establish that one existed, and that it was general (Smith v. National Bank of D. O. Mills, 191 Fed. 226, 231); and that it followed the usage in attempting to make the collection.
In order to bind the parties to the transaction the usage must not only be so general and well known in the community as to fasten an implied knowledge on the parties, if actual knowledge be denied (Smith v. Bank of D. O. Mills, supra), but it must be reasonable. (Davis v. First Nat. Bank of Fresno,supra; Farley Nat. Bank v. Pollock,
For the foregoing reasons, the judgment is reversed and the cause is remanded to the lower court for such further proceedings, in keeping with what is said in this opinion, as the parties may determine.
Lennon, J., Myers, J., Lawlor, J., Seawell, J., Richards, J., and Wilbur, C. J., concurred. *192