Kelty v. Second National Bank

By the Court, Ingraham, P. J. Two questions are raised in this case: First. Whether a party receiving a draft payable at sight, is guilty of negligence if he does not present it before the day after it is received. Second. Whether if, on presentment, the holder receives from the drawee a check for the amount, when the draft is delivered up, is charged by the drawee to the drawer, passed through the books of the' drawee, and the draft canceled, such facts amount to payment; or whether, if the check is not paid, the draft can be delivered back to to the holder protested and óollected from the drawer. TJpon the first question, it is well settled that presentment of a check or draft on a bank, presented the day after it is drawn is presented in season, (Merchants' Bank v. Spicer, 6 Wend. 443;) and the same case holds checks and drafts to be subject to the same rule. (Mohawk Bank v. Broderick, 13 Wend. 133 ;) and where the facts are not disputed, whether due diligence has been used is a question of law for the court. (11 John. 187.) As to the second question, under the decision in the Commercial Bank v. Union Bank, (11 N. Y. Rep. 203,) the receipt of the check of the drawees and the surrender of [335] the draft to Mm, the account of the drawers in the bank being at the time good, was a payment, the draft ceased to be a valid or subsisting bill, and could not be revived by any subsequent negotiation; if the check had been drawn on the bank receiving the check. This was also held in Pratt v. Foote, cited in the last case and reported 9 N. Y. Rep. 463, where it is said: “ When the bank upon which a check is drawn accepts it upon its own debt, the same' act of acceptance pays the check to the payee and the debt to the bank.” In the same case it is said, if the check was drawn upon some other bank, it would then have been necessary to show a distinct agreement to accept the check in satisfaction. This is laid down as the law in Olcott v. Rathbone, (5 Wend. 490.) The true rule in such a case is, that the delivery of the check was not a payment if not paid, and if so, the draft never ceased to be a valid obligation. The subsequent return of the check and receipt of the draft, and its protest in due season, preserved its vitality and the plaintiffs have a right to recover the amount from the drawers. [New York General Term, November 2, 1868. Judgment should be entered on the verdict. Ingraham, J. F. Barnard and Mullih, Justices.]