144 Ga. 745 | Ga. | 1916
Spooner brought suit against the Bank of Donalsonville. The petition was dismissed on general demurrer. On
Where a check on one hank, payable to order and indorsed, has been deposited in another bank, and credited to the depositor, the question of whether title passes to the bank of deposit, or remains in the depositor, as between them, has given.rise to much discussion. If the paper is distinctly indorsed “for collection,” or in terms of similar import, or if there is a definite agreement at the time of the deposit that the check is deposited for collection, or, on the other hand, that it is to become the property of the bank, the ease is not one of difficulty. But, where a check on one hank, payable to order, is indorsed generally and deposited with another bank, without any definite agreement as to the way in which it is to be treated, and the depositor is credited by the bank with the amount of the check as.if it were cash, the authorities are divided as to the effect of the transaction. Some of them declare that the effect is to pass title absolutely to the bank, which becomes the debtor of the depositor, though he is liable to the bank as indorser. Others hold that, as between the bank and the depositor, the title remains in the latter until the check is collected, although crediting it may permit the depositor to draw against the deposit. Emphasis has been laid upon whether the deposit has actually been drawn against, or whether it has been applied to extinguish a past advance. If there is a distinct agreement or understanding, that the credit is to be provisional, and that no money can be drawn until the check has been collected, or only as a favor or temporary loan or advance, this- may be determinative of the question.
While some of the authorities have announced broadly that the passing to the credit of the depositor of a check payable to order and bearing an indorsement not indicating that it is deposited for collection only, passes the title to the bank, or does not do so, there is weighty authority that this result either way is not absolute but is prima facie, and that the presumption from this fact only will yield to proof of the intention of the parties expressed or implied from the circumstances. In some cases whether the depositor was a regular customer, and what had been the practice as to permitting him to draw checks against his deposit account, in-
The present case does not involve a consideration of the effect of the use of certain words in an indorsement, such as “for deposit to the credit of,” “for collection and deposit,” or the like, or what rights are conferred on the bank thereby. See Freeman v. Exchange Bank of Macon, 87 Ga. 45 (13 S. E. 160), distinguished in Fourth National Bank v. Mayer, supra; Ditch v. Western National Bank, 79 Md. 192, 221 (29 Atl. 72, 138, 23 L. R. A. 164, and note, 47 Am. St. R. 375); Cronheim v. Postal Telegraph-Cable Co., 10 Ga. App. 716 (74 S. E. 78), where the paper was treated as deposited “for collection and credit for deposit,” though there was some general discussion in the opinion. Nor need we consider possible rights which may be acquired by third persons from a bank to which a general indorsement has been made.
When the case was here before, the ruling was that the petition was not subject to general demurrer. In so holding we did not find it necessary to go as far as some of the authorities referred to above. There were allegations, that the customer carried a deposit account in cash to Ms credit, subject to Ms check, payable upon presentation to the bank; that a check on a bank in another place, drawn by a third person and payable to the customer’s order, was indorsed in blank and deposited on September 15, 1910; that the bank accepted the cheek so deposited and placed it as a credit on the plaintiff’s deposit account, and gave
In regard to the right to charge back checks if not paid, in 5 Cyc. 499, it is said: “With few exceptions, all checks which are credited to depositors are entered with the express or implied right to charge them back if they are not paid. One view of this right to retransfer is that it is inconsistent with the bank’s ownership of the title, even though advances be made on them. If, however, the bank divests itself of its qualified title by charging them back, it still preserves its lien for any advances actually made on them. The other view is that the right to retransfer does not affect the bank’s title to the paper, every indorsee having recourse to his indorsement in the event of not receiving payment from the primary party.” The author of the article in Cyc. oh Banks and Banking (Mr. Albert S. Bolles), in 1 Bolles’ Modern Law of Banking, 210, states that the theory that the right to charge back checks in the event of their non-collection is inconsistent with the right of ownership, is not the prevailing view; that individuals are given checks every day in payment of débts; that ordinarily
If a check of a third person on another bank, payable to order, is deposited under a special agreement that the bank of deposit is not to be liable until the cash has been paid to it, or that it is credited subject to payment, this negatives the idea of a sale of the paper to the bank, or of the absolute transfer of title to it. The courts of New York have long been leaders ip holding that, where a depositor of a bank deposits therein commercial paper of third persons, payable to order and indorsed generally, and'the bank by his direction gives him credit therefor as cash, the title to the paper passes to the bank. But in King v. Bowling Green Trust Co., 145 App. Div. 398 (129 N. Y. Supp. 977), it was held that such was not the -ease where the deposit slip contained a statement that, in receiving such checks, the bank assumed no responsibility for a failure' of any of its collection agents, and should only' bé liable when the proceeds in funds or solvent credits should come into its possession, and where the depositor’s passbook stated that the bank acted only as agent in receiving such checks for collection. As to the effect of an indorsement for collection, and the making of a credit “subject to payment,” see Fifth National Bank v. Armstrong, 40 Fed. 46. In the opinion of , Thayer, J., it was said: “In its letter acknowledging the receipt of the Shelby draft, the Fidelity Bank stated. that it credited the same, 'subject to payment.’ This must be understood as meaning that the credit was merely provisional, that is, conditional 'on pajunent, and that it did not intend to assume the risk of payment, or give an absolute credit, or put itself in any other relation to the paper than that of an agent for collection.” Tn that case the indorsement was expressly for collection; but it is cited for the reference to the effect given to the expression, “sub
In Harter v. Bank of Brunson, 92 S. C. 440 (75 S. E. 696), it was held, that a draft deposited on a slip containing a provision that the bank is not to be held liable-until the draft is collected does not exempt the bank from liability for its negligence or that of its correspondents, who are its agents; and that where it forwards such draft promptly to its correspondents for collection, but hears nothing of it for several months, during which time the drawer becomes insolvent, the bank is liable to the depositor for the amount of the draft. In that case the draft in favor of the plaintiff was indorsed by him and deposited with the defendant bank and the amount thereof was placed to his credit on his account with the defendant. -The draft was listed, with other items, on a blank form of deposit slip which was filled up and signed by the plaintiff, and upon which, over the plaintiff’s signature, was printed the following stipulation: “For value received, we, the undersigned, hereby agree, in depositing the items listed below for collection or credit with the Bank of Brunson, Brunson, S. C., that we will not hold the bank liable to us for said items until the cash for each has been paid to the Bank of Brunson, Brunson, S. C.” The defendant promptly forwarded the draft to the
From the foregoing discussion it will be seen that an action based upon the ground that the bank became the purchaser of the check, took absolute title thereto and credited the amount to the depositor, which,became his money, and which could not be lawfully taken from him, is not identical with an action against a bank, treated as a collecting agent and holding only a qualified title for that purpose, on account of negligence of itself or its correspondent in failing to present or collect the cheek; and that a credit given under an agreement that the bank shall not be held liable until the paper is collected is not absolute but contingent upon such collection.
In the case now before us the evidence for the plaintiff tended to show, among other things, as follows: The plaintiff was a general depositor with the defendant bank. He had a general understanding with the bank, by which he deposited money and checks to his credit and drew cheeks against his account. He had no understanding about the particular check involved in this controversy, but sent it by mail, without instructions, to the bank on September 15, 1910. On October 24 he received a letter from the cashier of the defendant, informing him that it had heard nothing from him in regard to the check, which it had notified him several days previously had been lost in the mails, and that the bank was that day charging his account with the amount of the check “until you obtain duplicate check for the amount, which you can send in for recredit.” Hpon receipt of this letter he went to the bank and discussed the matter with the cashier, claiming that he should have credit for the money, while the cashier claimed that the bank was not responsible, as the- check was lost. He did not tell the plaintiff who lost it, and gave him little satisfaction. He did not say what he was going to do about the money, but that he would write to the drawer of the check in regard to it and see what he would do about giving a duplicate, “or hunt up the check.” He said he would undertake to get a duplicate. The plaintiff never received the check or a duplicate, and has never seen the drawer since that time. The bank did
The cashier of the defendant testified, among other things, as follows: Upon receipt of the check by mail he made out a deposit slip, showing its deposit. This slip was as follows:
“Donalsonville, Ga., 9-15, 1910. For value received, we, the undersigned, hereby agree, in depositing items listed below for collection or credit with the Bank of Donalsonville, that we will not hold said bank liable to us for said items until the cash for each has been paid to Bank of Donalsonville, Donalsonville, Ga.
J. G. Spooner.
“List each check separately.
“Checks, etc., $485.00.
“Please see that all cheeks are endorsed.”
The testimony of the cashier continued in substance as follows: All of the deposit slips ever used by the bank had the same conditions printed on them. The plaintiff had been doing business with it for about four years, and with each deposit had been presented with a slip containing those conditions, and had seen them. The check was immediately forwarded for collection to the correspondent of the bank in Savannah. The bank had an account with its Savannah correspondent, and deposited the check with the latter under the same conditions as those upon which it was deposited with the defendant. The Savannah bank credited the check to the defendant, and forwarded it for payment, but it was lost in the mail, and was never returned to the defendant, nor by it to the plaintiff. It was the duty of the Savannah bank to send the check to Augusta, where the drawee bank was located, for payment immediately about the 17th of September, and in due course of banking it should have arrived there not later than the 20th, and the Savannah bank should have known in eight or ten days later whether the check had been presented or lost. If lost, the Savannah bank should have notified the defendant, and' it
On the subject of notice and of whether the deposit slip was received by the plaintiff, the evidence was somewhat confused. It was stated in the bill of exceptions that the defendant introduced in evidence a deposit slip, “produced by the plaintiff under a notice to produce and made at the time of the deposit, of the check in question by the officers of the bank, which the court allowed to go in with the statement that it was never given to the plaintiff, but retained at the bank, unless the defendant showed that a copy of it or duplicate was mailed to the plaintiff, which he had been called upon to produce.” It is not quite clear what this means, or how the plaintiff could produce a deposit slip if he did not have it. The cashier first testified that he mailed to the plaintiff a duplicate of this slip, and later that he did not do so, but on the day of the deposit mailed to him a card dated September 15, 1910, and containing the following: “Your favor of the -received with stated enclosures. We credit your account $485.00. We enter for collection-We charge your account and return-All items sent to us are credited subject to payment.” This card was produced by the plaintiff under a notice to produce the deposit slip acknowledging the receipt of the check in question. He had alleged in his petition that the defendant gave him a deposit slip.
From the uncontradicted evidence it thus appears that .the bank used only one form of deposit slip, which contained the provision set out above, and that the plaintiff was familiar with the fact, having been a depositor for several years. It also appeared, without contradiction, that the deposit of the check was entered on a slip of that character, made out by the cashier, and that he mailed to the plaintiff either a duplicate of such slip, or a card acknowledging the receipt of the check, and stating that the amount of it had been credited to the plaintiff’s account, and that on this card was the statement that “All items sent to us are credited subject to payment.” This shows beyond controversy that the check was not sold to the bank unconditionally, and that the
It has been said that the liability of a bank negligently failing to collect paper received for that purpose may be enforced by an action of assumpsit for breach of its implied undertaking to use diligence in making the collection, or by an action of case for damages resulting from negligence in the performance of its duties imposed by law; and that in some eases, where the bank has received money, or something which, under the circumstances, ought as between the parties to b'e regarded as money, an action would lie for money had and received. 2 Michie on Banks and Banking, § 175; Pinkney v. Kanawah Valley Bank, 68 W. Va. 254 (69 S. E. 1012, 32 L. R. A. (N. S.) 987, Ann. Cas. 1912B, 115); 2 Greenleaf on Ev. § 118. See also, in this connection, Jefferson County Savings Bank v. Hendrix, 147 Ala. 670 (39 So. 295, 1 L. R. A. (N. S.) 246).
In the case now before us, as we have held that the credit given by the bank to the plaintiff was not absolute but contingent, the-loss of the check in the mails before presentation and the delay of some days, perhaps of several weeks, in notifying the plaintiff of the loss, nothing else appearing as to whether there were funds in the drawee bank to meet the check if presented, or as to any change in its condition or that of the drawer, or to show other circumstances of like effect, will not alone suffice to authorize a recovery as for money had and received. The facts involved in the West Virginia case above cited are quite different in this respect from those here involved. Whether the result would have been different had the check been indorsed, and credited generally and not subject to its payment, need not be decided.
In Stein v. Empire Trust Co., 148 App. Div. 850 (133 N. Y,
In an action on the case against a negligent agent, the general rule is that both negligence and injury must be shown. We need not enter upon a discussion as to what is sufficient to make out a prima facie case of damages, or how far it is necessary to show a probability or certainty that the collection would have been made but for the negligence of the bank,'in order to shift the burden of proof; or whether, if there be evidence tending to show loss, the face of the paper will furnish prima facie evidence of the amount of the damage. On this subject see note to Jefferson County Savings Bank v. Hendrix (supra), 1 L. R. A. (N S.) 246, citing and discussing Allen v. Suydam, 20 Wend. 321 (32 Am. D. 555), and a number of other, cases and text-books; Sahlien v. Bank, 90 Tenn. 221 (16 S. W. 373); Second National Bank of Baltimore v. Bank of Alma, 99 Ark. 386 (138 S. W. 172). In some cases it has been said that the measure of damages which the holder of a bill, note, or the like is entitled -to recover from a bank or other collecting agent which has been guilty of default in respect to it, is the actual loss which has been suffered; and that this is prima facie the amount of the bill or note placed in its hands. But in most of such cases an examination of the facts will show that there was some evidence that with diligence there was a reasonable probability of collection, or that by reason of the conduct of the bank there was a discharge of an indorser or drawer, or some financial failure of the drawer of a check or of the drawée bank after negligence in omitting due presentation, or some like facts; and the general statements must be considered in connection with the facts involved. See, in this connection, Borup
If the present case, therefore, should be treated as including an action for damages for negligence on the part of the defendant bank in the discharge of its duties as a collecting agent, there was evidence tending to show negligence on the part of itself or its correspondent in Savannah; and in this State the original bank is liable for damages arising from the negligence of its correspondent to whom it sends a paper for collection. Bailie v. Augusta Savings Bank, 95 Ga. 277 (supra); Civil Code (1910), § 2362. But there was no evidence tending to show any damage arising from such negligence. It did not appear that the drawer of the check had funds in the bank with which to meet it at the time when it was drawn, or that the drawee bank failed, or that the drawer became insolvent, or any other circumstance showing loss to tb!e plaintiff arising from the negligence of the defendant or its correspondent in handling the check or in failing to promptly notify the plaintiff of its loss. There is no claim that this is a suit in assumpsit for breach of an express or implied contract by the bank to act as a collecting agent. Nor is any contention made that the plaintiff might be entitled to proceed for nominal damages. Under the pleadings and evidence and contentions of the parties, the judgment will not be reversed on that ground.
Judgment affirmed.