Barnes v. Peoples Bank & Trust Co.

Abams, J. The plaintiff’s motion for judgment on the pleadings was in the nature of a demurrer to the answer, admitting the truth of the allegations therein, but denying their legal sufficiency to constitute a defense. For this reason the answer should be liberally construed and every intendment should be taken against the plaintiff; or, conversely, to warrant the judgment the allegations which are essential as a basis for it should be admitted. Pridgen v. Pridgen, 190 N. C., 102; Churchwell v. Trust Co., 181 N. C., 21; Alston v. Hill, 165 N. C., 255. On 11 April, 1925, the defendant received from the plaintiff a cashier’s check for $4,800, which had been given her by the First National Bank of Selma, and on the same day presented to the issuing bank this check and others held against it by the plaintiff’s children, and accepted from it in substitution two drafts, one of which, covering the plaintiff’s cheek, was drawn on the Federal Eeserve Bank of Bich-mond, Yirginia, for $12,847.15, and was afterwards returned unpaid. This was admitted. It may be stated as a general rule that an agent for collection has no authority to receive payment in anything but money. In Ward v. Smith, 7 Wal., 447, 19 Law Ed., 207, it is said: “That the power of a collecting agent, by the general law, is limited to receiving for the debt of his principal that which the law declares to be a legal tender, or which is by common consent considered and treated as money, and passes as such at par, is established by all the authorities.” Moye v. Cogdell, 69 N. C., 93; Bank v. Kenan, 76 N. C., 340; Bank v. Grimm, 109 N. C., 93; Bank v. Brightwell, 71 A. S. R., 608; Bank v. Bank, 74 A. S. R., 527; Minneapolis Co. v. Bank, 77 A. S. R., 628; Brown v. Bank, 52 L. R. A. (N. S.), 652. In Michie’s Banks and Banking, page 1395, the law is thus stated: “In the absence of special authority or well-established custom to the contrary, a bank with which paper is deposited for collection has no authority to accept anything but money as payment.” Exceptions to the general rule are recognized also in Malloy v. Federal Reserve Bank, as reported in 281 Fed., 997, 1005, and in *374 264 U. S., 160, 68 Law Ed., 617. In tbe former this conclusion was announced: “Tbe authorities appear to be practically uniform in bold-ing that, in tbe absence of any instruction or permission from tbe owner of tbe check, or any custom brought to tbe notice of such owner to tbe contrary, tbe bank bad no authority to accept or receive in payment of tbe check intrusted to it for collection anything other than money”; and in tbe latter, certainty and uniformity as essential qualities of such custom are clearly pointed out. There can be no question that it was tbe defendant’s duty to exercise due care to collect tbe plaintiff’s check. 1 Morse on Banks and Banking, sec. 218; Bank v. Kenan, supra. But tbe defendant denied negligence and denied that it bad acted without tbe plaintiff’s authority. This in effect was an allegation that it exercised due care and bad tbe plaintiff’s assent to tbe course it pursued. More than this: it was alleged in tbe answer that tbe plaintiff, as well as tbe defendant, knew when tbe checks were presented to tbe First National Bank of Selma for collection that tbe bank did not have money enough to pay either of tbe checks; moreover, that tbe only way in which it could pay tbe plaintiff’s check was by tbe usual method of clearing its collections. Tbe object of these allegations, we take it, was to justify tbe defendant’s acceptance of tbe checks as falling within exceptions to tbe general rule. In giving judgment for tbe plaintiff upon tbe pleadings there was error. Reversed.