Burkhalter v. Second National Bank 42 N.Y. 538

Charles Burkhalter and others, Respondents, v. The Second National Bank of Erie, Pa., Appellants.

The giving a check by the drawee, on presentation of a draft and its delivery to him, is not of itself payment, in the absence of an agreement that the check should be received as payment; and, upon such check being dishonored, the holder of the draft may disregard the transaction, reclaim the draft, present the same anew and protest it for non-payment, so as to charge the drawer, if done within a reasonable time after it was originally received by him.

The plaintiffs, as holders of a draft drawn by the defendant upon C. P. & Co., presented the same for payment the day they received it, March, 26th. The drawees gave their check to the plaintiffs, receiving the draft from them, and charged the amount to the defendant. On the following day (27th), the check was presented, in the ordinary course of business through the clearing house, and was dishonored. The plaintiffs, thereupon, returned the check and reclaimed the draft, which they caused to be again presented, and payment being refused, protested, notice of protest being mailed on the next day (28th). The drawees, C. P. & Co., failed on the 27th.—Held, that the defendant was liable on the draft. Presentation on the 27th and notice of protest on the 28th was all the law required to charge the drawer, the giving a check on the 26th being, neither payment nor refusal to pay.

Held, further, that, although the drawees had money on hand sufficient to pay the draft when they gave their check, and the plaintiffs would probably have received payment in money if they had demanded it, and although the bank upon which the check was drawn certified and paid certain checks of C. P. & Co. on the 26th, and even on the 27th, before this check was presented (but without having any of their funds), and would perhaps have certified or paid this check, if presented on the 26th, these facts did not show any negligence on the part of the plaintiffs, or discharge the defendant.

(Argued January 15th, 1870;

decided March 19th, 1870.)

Appeal from a judgment entered upon the decision of the General Term of the Supreme Court, in the first judicial district, upon exceptions there heard in the first instance, ordering judgment to be entered upon a verdict in favor of the plaintiffs.

On the 24th day of March, 1866, at Erie, Pa., the defendant drew a draft for $1,166.89, in favor of Johnson & Brevillier, who resided at Erie, on Culver, Penn & Co., of New *539York; Johnson & Brevillier indorsed and at once forwarded the draft to plaintiffs, who received and credited the' same on their indebtedness to the plaintiffs. The draft was received by the plaintiffs at the city of Mew York, by mail, on the morning of the 26th day of March, about nine o’clock, and they presented it soon after to Culver, Penn & Go. for payment, and received their check on the Third Mational Bank of Mew York for the amount of the draft. Culver, Penn & Co. took up the draft, and immediately charged it on their books to the defendant, the drawer of the same, and it was so charged in the account current sent to the defendant the next day by Culver, Penn & Co.

This check was not presented to the Third Mational Bank to be certified on the 26th of March, nor for payment until the next day, the 27th, when it was presented through the clearing house, according to the usual course of business in Mew York in such cases, and payment was then refused, Culver, Penn & Co. having failed on that day. The plaintiffs thereupon returned the check to Culver, Penn & Co., and received back the original draft, which they again, on the 27th day of March, about three o’clock, p. si., caused to be presented for payment to Culver, Penn & Co, by a notary public. Payment being refused, the draft was then protested for non-payment, and notices of protest were sent off the next day, March the 28th.

The evidence shows, that when the draft was first presented on the 26th of March, defendant liad funds with Cul ver, Penn & Co., to an amount more than sufficient to pay the draft; and that Culver, Penn & Co. had currency on hand, during the whole day, to the amount of §12,000 or upward. Culver, Penn & Co. had no funds in the Third Mational Bank on the 26th or 27th day of March, but, on the 26th, the bank continued to pay their checks, under the expectation that they would make their account good. If plaintiffs had demanded the currency on the draft of Culver, Penn & Co. on the 26th, or early in the day of the 27th, it would most probably have been paid; but if all the persons, *540who, during the same time presented drafts on them, had demanded currency, they could not have paid them all.

After this draft was returned, the defendant took it up and gave in the place of it the one-upon which suit is brought, believing that the plaintiffs had taken due diligence as to the first draft, and that it was liable to take it up. It defends this draft on the ground, that it was given under a mistake of facts for the first one from which it had been discharged.

Judgment was rendered for the plaintiffs; and from a judgment of affirmance at a General Term of the Supreme Court, in the city of New York, an appeal has been taken to this court.

Hooper C. Van Vorst, for the appellant,

insisted that the plaintiffs accepted the check, instead of money, at their own risk, and that their delay in presenting it discharged the defendant. That the plaintiff made the draft payable on the 26th, by presenting it on that day, and could not then extend the payment until the 27th. He cited Kobbe v. Clark (Seld. Notes of Cas., No. 4, p. 11, Oct. 7, 1853); F. Cauldwell & Sons v. George Sanderson & Son (Bankers’ Mag., vol. 8, N. S., p. 962); Nunnemaker v. Lanier (48 Barb., 234); Story on Bills, 549; Chitt. on Bills, 369; Edwards on Bills, 506; Com. Bank of Penn. v. Un. Bank of New York (1 Kern., 214); Platt v. Foot (5 Seld., 463).

Fnooh L. Fancher, for the respondent,

on the question of. diligence on the part of the plaintiffs, cited Benton v. Martin (31 N. Y., 385); Merchants’ Bank v. Spicer (6 Wend., 443); Harker v. Anderson (21 Wend., 373); Hazelton v. Colbourn (2 Abb. N. S., 202); Beeching v. Cower (1 Hilt. 313); Mohawk Bank v. Broderick (10 Wend., 304); 1 Abb. Dig., 451; United States v. Davis (2 Hill, 451); Howard v. Ives (1 Hill, 263); Cuyler v. Stevens (4 Wend., 566). That the check was no payment, he cited Hill v. Beebe (3 Kern., 556); Gregory v. Thomas (20 Wend., 17); Waydell v. Luer (5 Hill, 448); Cole v. Sackett (1 Hill, 516); Hawley v. Foote (19 *541Wend., 516), Frisbie v. Learned, (21 Wend., 452); Vail v. Foster (4 N. Y., 312); Crane v. McDonald (45 Barb., 354); Johnson v. Bank of North Am. (5 Robt., 590) ; Bradford v. Fox (38 N. Y., 289); Turner v. Bank of Fox Lake (3 Keyes, 426).