Nunnemaker v. Lanier

By the Court, Leonard, J. The defendant’s firm, Wins-low, Lanier & Co. received from the plaintiffs a draft drawn by the Dayton Bank upon The Ohio Life Insurance and Trust Company, for $>800, for collection. Messrs. Winslow, Lanier & Co. presented it to the Trust Company at the office of their agency in New York, and received in payment the check of the Trust Company, drawn upon the American Exchange Bank, and surrendered the check which they held for collection. The defendants neglected to present the check received by them from the Trust Company on the day . they received it, although there was sufficient time to do so during banldng hours; and all checks of the Trust Company presented that day were duly honored by the said bank. The Trust Company suspended payment, and their insolvency and suspension was publicly known before banking hours on the next business day. The check of the Trust Company was dishonored upon presentation, and the defendants then demanded a return to them of the draft of the Dayton Bank, but were unable to procure it, and the Trust Company had in fact cancelled it after they had drawn and delivered their check upon the American Exchange Bank, in the same manner as in the case of paid checks. The defendants rely upon the existence of a custom in the city of New York among business men to take the checks of the Trust Company without certification, in the same manner as bank checks, and insist that having done the business of collecting for the plaintiffs for a very small commission only, in the customary way prevailing at that time, they cannot be held liable for an imputed negligence in this case. Unless a different rule prevails in respect to corporations doing a banking business from that applied to the case of private bankers, I am unable to perceive that the custom relied on affords any defense. The defendants having surrendered the draft of the Dayton Bank, assumed the responsibility of taking the check of the party upon whom the draft was drawn in payment. This [236] was done without the knowledge or authority of their correspondents. The act was their own, relying upon the assumed responsibility and wealth of the Trust Company. It is no excuse that they and others were in the habit of taking similar risks. [New York General Term, January 7, 1867. The defendants insist that the check of the Trust Company is not a payment, and that the plaintiffs can still resort to the Dayton Bank, the defendants having caused notices of protest to be served, as they claim, in due season. The fact may be so. It may be that the plaintiffs could have maintained an action against the Dayton Bank. It is not certain, however. The right to maintain such action might have depended upon the state of the accounts between the Trust Company and that bank, and whether the Dayton Bank would sustain any loss by reason of the cancellation and supposed payment of their draft before receiving notice of its dishonor. The plaintiffs cannot be compelled to resort to a doubtful remedy against another party. There were some objections taken to the admission of evidence of an immaterial character, which might have been very properly excluded, but none of the evidence so admitted affected the result. The evidence related to the entries in the account hooks of the Trust .Company; but no fact appears to have been found by the referee based upon such evidence. The facts found by the referee are nearly all of them stated by the defendants in their answer. The judgment should be affirmed with costs. Leonard, Ingraham and Clerke, Justices.]