Miller v. Chatham & Phenix National Bank

Wagner, J. The court below correctly held the defendant bank indebted to plaintiff for the sum of $200. The bank official who paid the check had the opportunity to ascertain whether the check he cashed had, prior thereto, been “ stopped ” by the maker. “ It is the right of the bank to reject it [the check], or to refuse to pay it, or to receive it conditionally * * * but if it accepts such a check and pays it, either by delivering the currency, or giving the party credit for it, the transaction is closed between the bank and such party, provided the paper is genuine.” (Oddie v. National City Bank of New York, 45 N. Y. 735, 741.) No action for refund because of a mistake of fact will lie under the circumstances disclosed in the instant case. The above cited rule is in accord with commercial practice and is essential to business stability. The court below erred, however, in failing to dispose of the controversy 560 between the defendant bank and the defendant Schwartz, the latter having been made a party defendant upon motion of the bank. Schwartz is the maker of the check in question and the bank is entitled to charge his account with the amount paid if the evidence should establish that the payment of Schwartz’s check was made prior to the receipt of the stoppage order.