45 Pa. Super. 236 | Pa. Super. Ct. | 1911
Opinion by
For some months prior to September 4, 1907, the plaintiffs, small merchants in the city of Philadelphia, had maintained an ordinary deposit account in the defendant bank. At the opening of business on the morning of that day it is conceded the correct amount of the balance to their credit was, as shown by the books of the bank, $328.12. The defendant bank was a member of the Clearing House, and while the situation remained as above stated*jts mes
The largest sum called for by any single check of the seventeen was $75.00 the smallest $5.00, but their aggregate sum was $664.45, a little more than twice the amount of their balance. The bank thereupon declined to pay any of the checks and returned them to the Clearing House. Shortly afterwards a messenger of the plaintiffs arrived at the bank with a deposit of $480.50. The bank, having already rejected and returned the checks as stated,' declined to receive this deposit and requested the plaintiffs to close their account. Accordingly on the following day, September 5, the plaintiffs drew their check to the order of cash for $328.12, the amount pf their balance. The check was paid and the account closed.
The plaintiffs then brought this action of trespass to recover damages. The pleadings are not printed in the paper-books, but we understand from the history of the case presented by appellant that it was not claimed that the bank was under any obligation to pay all of the checks presented. The complaint is that, having admittedly $328.12 of the plaintiffs’ money on deposit, the bank refused to pay any of their checks up to the amount of that balance.
The theory of the defendant is fairly and fully set forth in its first point for charge, the refusal of which constitutes the first assignment of error. The point was "As the evidence shows that the aggregate amount of the checks drawn by the plaintiffs, presented to the defendant on September 4, 1907, was greater than the amount plaintiffs had then on deposit with defendant, there was no obligation on the part of defendant to pay any part of them, and it had no right to pay certain checks and refuse payment of others; the verdict must therefore be for defendant.” This was followed by a point for binding instructions which
In determining the propriety of the action of the bank in rejecting all of the checks of the plaintiffs we exclude from our consideration the later offer of deposit. Whatever it may prove as to the good faith of the plaintiffs when they issued checks aggregating more than their balance in bank, it can in no way aid in determining the legal obligation of the bank at a time when it could not know that its depositor was about to increase his balance by the addition of a fresh deposit.
It may not be unworthy of remark that notwithstanding the vast volume of commercial business transacted every day in Pennsylvania by the use of bank checks, the question now before us seems to have never reached our courts for determination, and we are without the aid of any precedent. The defendant’s theory, however, is supported by as respectable an author as Mr. Morse, who, in his work on banks and banking in sec. 354, speaking of a bank in the situation which confronted this defendant, says: “The bank cannot look at their dates; for priority of presentment not of date secures priority of payment, so if the bank cannot pay all the checks of any individual depositor then coming through clearing, it must pay none of them. It has no legal power or right to select or choose from among them certain ones which it will honor or certain ones which it will dishonor. All or none must be paid. Any other course would render the bank liable to the holders of the dishonored paper.” Apparently the compelling reason upon which the author’s conclusion rests is indicated in the last sentence quoted.
In Pennsylvania, however, it has long been established that the holder of a check, who presents it to the drawee bank for payment, acquires no right of action against the bank by reason of its refusal to pay such check, even where the maker has on deposit ample funds for that purpose. And this for the simple but sufficient reason that
There remains but one other aspect in which the question may be viewed, and this must be the controlling one. This is an action brought by the depositor. He bases his right to recover on the breach of a contract between him and the defendant bank. The existence of such a contract is not and cannot be denied by the defendant. Nor can it be doubted that the obligation of that contract, as has been frequently declared by our courts, requires the bank to pay over the moneys of its depositor upon his demand made in the form sanctioned by commercial usage. As already stated, it could not be successfully claimed for the plaintiffs that the defendant bank was obliged to pay all of the checks presented on the morning of September 4. No line or letter of its contract required it to pay more than
For although it may be true enough, in a general sense, that the rules of the Clearing House are binding only on those who are members of it, yet it would be difficult for the plaintiffs to maintain that after they had launched their checks into the general channels of commerce they would not be affected by the reasonable usages and customs of those agencies which they must have expected would be used as their checks passed on their way to their final destination. But we have not this question before us because the evidence is barren as to the existence of any rule or regulation on this subject by the Clearing House. Nor does it even show the existence of any custom among the banks of the city of Philadelphia in such cases.
There was therefore nothing we can see in the law of Pennsylvania, or in any established and recognized usage or custom which might affect the plaintiffs or control the action of the defendant, which forbade the latter to comply with the obligation of its contract with its depositor. Had the defendant chosen to take up the checks in the order of their date and pay them as far as the plaintiffs’ money would go, who could complain of such action? As we have already seen, the holders of the checks not paid would have no standing at all to demand anything from the bank, nor could they be legally injured by its action. And the depositor would in vain attempt to say that he had been injured because each check which the defendant would have paid would have been a lawful demand by the
But we are not willing to say that this was the only course that could or should have been followed by the defendant bank. There is considerable force supporting the practice that seems to prevail among banks in certain sections of the country when called upon to dispose of a question like that' which confronted the defendant bank on September 4. This practice is, in such cases, to select and pay the largest number of the checks presented that can be paid out of the balance on hand, and this o.n the reasonable theory that the credit of the depositor will be less hurt in the general commercial world by the rejection of a few checks, even if their amounts be larger, than by the dishonor of many. And again, it is difficult to see how the depositor could be heard to complain had his money thus been applied by the bank.
It is no part of the plaintiffs’ case, however, to establish the proposition that it was the duty of the bank to pay their checks in the-order of their date as long as the balance on hand was adequate. The defense fails if the bank was obliged to pay any of the checks, allowing to it, for the purposes of this case, to select for itself which checks it would pay. As the record stands we can reverse this judgment only on the ground that because there were seventeen separate and distinct checks aggregating more than the plaintiffs’ balance, the defendant was relieved from the obligation of its contract with its depositor and was justified in paying none of them. We are unable to perceive any solid foundation on which this conclusion would rest. Any check of that bundle which the paying teller chose first to take up, no matter what its date, was a legal demand by the plaintiffs for the payment of that much of their money. The deposit was there to meet it. The fact that sixteen other checks were on his counter awaiting his action, created no legal obstacle to the payment of that one; no paralysis of the obligation of the bank’s contract
No question is raised as to the measure of damages. The verdict is a moderate one, and we are of the opinion that the judgment entered on it cannot be fairly disturbed.
Judgment affirmed.