Union National Bank of Troy v. Sixth Bank of New York

Folger, J. The rule established by the class of cases, of which The Kingston Bank v. Eltinge (40 N. Y., 391) is one, is not questioned by the counsel for appellants. But he insists that there is a distinction between them and the case in hand. Admitting that there was a mutual mistake in supposing that the note was paid, when it was not paid, he claims that the respondents were negligent in not making inquiry and using the means at their hand for arriving at correct information of the facts. But as a sufficient answer to this, it is held that it is no bar to an action, that the party paying had the means of knowing, and might have availed himself of those means by care and attention, and thus have arrived at exact knowledge. (Waite v. Leggett, 7 Cow., 195.) “ Care and diligence are not controlling elements in the case. It is a question of fact merely. The inquiry is, are the parties mutually in error, and did they act upon such mutual *455 mistake? Was there or not an error between the parties ? And the determination of the fact controls the result.” (Kingston Bank v. Eltinge, supra.) If the money “ is paid under the impression of the truth of a fact which is untrue, it may, generally speaking, be recovered back, however careless the party paying may have been in omitting to use due diligence to inquire into the fact.” (Kelly v. Solari, 9 M. & W., 54; Marriott v. Hampton, 2 Smith Leading Cases, 403, notes.) If it were conceded that the plaintiffs were subject to the imputation of negligence, that alone would not bar their action. The appellant’s counsel urges, however, that the plaintiffs were the agents of the defendants; that it was their duty to collect the note and remit the proceeds, or to return promptly the protested paper. They did not fail in the first branch of this duty, for the note was not paid; nor did they fail in making protest, etc., of the note. For that was done, by which all prior indorsers to the defendants were charged. Hotice of non-payment was also given to the defendants. It would not be claimed, if the transaction had stopped here, that the defendants would have any cause of complaint against the plaintiffs. It must be remembered that the notice of nonpayment meant for the plaintiffs was lost from or miscarried in the mail. They were authorized to act upon the natural inference from the usual course of business, that, no notice having been received of non-payment of the note, payment had been made. There was thus far no failure of duty to the defendants. And the case stands the same, as if the relations of the plaintiffs and defendants were not those of agent and principal. And the omission on the part of the plaintiffs to make inquiry, and obtain correct knowledge, is no more prevalent against them, than it would be, if they had not been the agent of the defendants. The appellant’s counsel makes the point also, that the defendants, relying upon the act of the plaintiffs, and paying over the money to Cregan, from whom they cannot recover *456 jit, have been irreparably injured, and that the plaintiffs are ft estopped from denying their assertion to the defendants that the note had been paid. The facts bearing upon this must be considered as they existed on the day on which the plaintiffs first sought from the defendants repayment of the money. This was about the 11th of February, 1866; and for sometime subsequent thereto, Cregan was a dealer with the defendants, and had on deposit with them an average amount large enough to have met this payment, and the amount of the note coidd have been charged against this deposit. It is said that Cregan refused to repay the money, alleging that believing the note had been paid he had parted with collateral security. But this is not proven. And the findings of the referee put the refusal of the defendants to repay, on the ground that Cregan could not be required to pay the note. There is no fact found or proven which shows this, or establishes that the maker and indorsers of the note were not on that day just as liable to the defendants as they were at the maturity of the note. (Troy City Bank v. Grant, Lalor Supp., 119; Wilkinson v. Johnson, 3 Barn. & Cress., 428.) The defendants having at the time of the plaintiffs demand upon them for repayment, all the means of securing themselves from loss, which they had on the day on which the note matured, and thus being in the same situation in which they were before the payment by the plaintiffs, cannot claim that they were immediately injured by the act of the plaintiffs. When injury does not necessarily result, it is wholly immaterial as respects the plaintiff’s right to recover. And it is for the defendants to show that injury has resulted. (Guild v. Baldridge, 2 Swan, Tenn., 295-304.) And see Rheel v. Hicks, 25 N. Y., 289.) The judgment of the General Term should be affirmed with costs to the respondent. Church, Ch. J., and Allen and Grover, JJ., concur. Allen, J., expressly on the ground, that the defendants did not necessarily sustain loss by the mistake. They were notified in time to reclaim the money of Cregan, and there *457 is no evidence to show that the situation of Cregan or the defendants has been changed in the meantime, or that either had parted with any security. Andrews, J., absent. Peokham, J., having been a member of the court below, did not sit.