97 Mich. 178 | Mich. | 1893
Plaintiff, a bank at Midland, in this State, on August 31,1891, sent to the Milford State Bank, at Milford, in this State, a demand draft upon the defendant, Patrick Byrne, drawn by tlie Midland Salt & Lumber Co., tlie title to which was in the plaintiff at the time of forwarding. Tlie defendant at that time, and for several years previous, had resided and been engaged in active business at Milford, and kept an account with tlie Milford State Bank. When drafts upon defendant were sent to the Milford State Bank for collection, Mr. Byrne, when he accepted the same, wrote his acceptance thereon in the usual form. Instead of paying the amount of the draft in cash, or drawing his check
The counsel for both parties recognize the Milford bank as plaintiff's agent for the collection of the draft. 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*180 the money." Ward v. Evans, 2 Ld. Raym. 928; Ward v. Smith, 7 Wall. 451; Pitkin v. Harris, 69 Mich. 133; Harley v. Watson, 68 Id. 531.
The most that can be claimed for this transaction is that the defendant, by accepting and delivering the demand draft, directed the Milford bank to pay the same, and charge the amount to his account, and that the bank promised to do so. As between them, it was, perhaps, understood that defendant had paid this draft, but it was in law no more than an attempted substitution of the bank for himself as debtor. Had the acceptance been a check, and the check drawn upon another bank or private person, the effect would, have been in law the same. The law requires payment in money, and, as already shown, nothing else answers the purpose, except by agreement with the creditor, or his agent duly authorized to accept something else. As between defendant and his bank, it ivas clearly the latter’s duty to honor his check (or acceptance, which, under their custom, was practically a check) by payment of the draft, bxxt the creditor xvas no party to that transaction. The bank xvas plaintiff’s agent to collect the money, not to make an arrangement by which it should assume the debt. A debtor xvho seeks to pay a debt through his debtor, thereby securing his own claim, acts at his peril, and is not exonerated from his obligation until his debtor performs his part by satisfying the creditor.
There are a fexv authorities which, at first blush, might be supposed to justify a different conclusion. Morse on Banking (section 305) is authority for the following:
“ By custom, banks receive their own certificates of deposit as payment, and such custom xvill be judicially noticed by the courts, and will justify a collecting bank in receiving its oxvn certificate of deposit in payment of paper it holds for collection; and the debtor is discharged, even though the bank fails before remitting. And especially will this be so where the owner of the paper directed the*181 bank to remit by draft, for he is presumed to have intended u draft of the collecting bank.”
The case of Mortgage Co. v. Tibballs, 63 Iowa, 468, is the authority cited for this. It bases the decision upon the usage of banks, of which it says courts will take judicial notice. This was a certificate of deposit. If there is any usage by which certificates of deposit are so used, it is plain that such certificates are but the promise of the bank to pay; and, were it the certificate of deposit or certified check of another bank, it would be the mere substitution of one obligation for another, and it is difficult to see any difference between such a .case and one where the certificate of deposit or certified check is that of the collecting bank. This holding is not supported by citations. Mr. Justice Beed dissents in an able opinion, adhering to the common-law-rule.
Another case, that of Welge v. Batty, 11 Ill. App. 461, is relied upon. Here the debtor drew a check on the collecting bank, haying at the time a deposit sufficiently large to cover it. The check was received and draft •delivered, and the amount was charged against the debtor on his bank account. A draft was sent by the collecting-bank, but, before it got around, the bank failed. This was held to be a payment; the court saying that it would have been an idle ceremony for the debtor to draw his money out of the bank, and pay it back again to the bank. Here, again, the court cites no authority to support its decision.
The great weight of authority is against these cases. The payment by check, certificate, or what not is not for the convenience of the creditor, and he has no concern with the fact that it is the custom of the bank to take checks in payment. The fact that a debtor has a credit at a bank is not conclusive evidence that the bank has money with -which to honor his checks. As in this case, the bank may be insolv
TJpon the undisputed facts of this case the plaintiff was entitled to the verdict, which the court properly directed.
Judgment affirmed.-