Syracuse, Binghamton & New York Railroad v. Collins

By the Court — Miller, P. J. I think that the plaintiff was not guilty of loches, in not presenting the check of the defendant to the" bank before it was closed, on the morning of the day following its delivery. The authorities are abundant that the holder of a check has the day after it is delivered in which to make a presentment for payment. (Kelty v. The Second National Bank of Erie, 52 Barb., 328; Johnson v. Bank of North America, 5 Robt., 592 ; Hazleton v. Colburn, 1 Robt., 345; 2 Abb. Pr. R., N. S., 199; Mer [32] chants' Bank v. Spicer, 6 Wend., 443; Mohawk Bank v. Broderick, 10 Wend., 304, 308; 13 Wend., 133; Ed. on Bills, 396, 399; 3 Kent, 155; Story on Promissory Notes, § 493, note 1.) But whether the failure to make a presentment and demand, and to give notice of non-payment, exonerates the drawer when the bank is insolvent, is a question of some difficulty. The rule -is settled that in case of a check, the drawer is to be treated the same as a principal debtor, and he is not discharged by any loches of the holder in not making due presentment thereof, or in not giving him notice of dishonor, unless he has suffered some loss or injury thereby, and then only pro tanto. (Story on Promissory Notes, § 492; Ed. on Prom. Notes, 398; Ch. on Bills, 423 ; Harbeck v. Craft, 4 Duer, 129.) It must, however, be made to appear that no damage or injury was caused in consequence of the omission. (Commercial Bank of Albany v. Hughes, 17 Wend., 94; Little v. The Phœnix Bank, 2 Hill, 425; Murray v. Judah, 6 Cow., 490.) As the defendant was not discharged by the failure to present the check to the bank before it stopped payment, it is difficult to see how a neglect afterward to make a presentment to and demand of a confessedly insolvent party could occasion any loss or injury to the drawer. It would not prevent a recovery of the bank, by the defendants, of the amount in their possession, which they had neglected to pay, and for which no demand had been made, and hence how could the defendant be damnified? In Commercial Bank of Albauy v. Hughes before cited, which was an action against the indorser of a bill of exchange, it was held that damages will be presumed, from the omission to present the bill for payment and to give notice of non-payment until all possibility of injury from the loches of the holder is removed by proof. In Mechanics' Bank of New York v. Griswold (7 Wend., 165), which was an action against an indorser, it was said that mere insolvency of the maker was not a sufficient excuse for want of demand and notice, and it was a reason why the indorser should have immediate notice. These remarks may [33] well apply to an indorser of a bill of exchange, who is not ordinarily liable, unless a demand is made and notice given. But can it be said that they are appropriate to the maker of a check, who is primarily liable, where it is entirely clear that it cannot be collected of the drawee, and where the latter has become insolvent and ceased to pay checks ? Even if damages are to be presumed, I am inclined to think that the presumption is rebutted by proof that the bank was utterly and hopelessly insolvent to a large amount to the knowledge of the maker, and that the maker had notice that the check was not paid soon after it was given, and could not, under the circumstances, have sustained any loss by want of a presentment and demand of payment. The question is not, however, free from embarrassment, and, as in my opinion, this case must be determined upon another ground, it is ■unimportant to decide the point now. I think that the delivery of the check in question was not a payment of the defendant’s demand, and that the plaintiff is entitled to recover upon the original indebtedness. It has been held in numerous cases in this State, that the giving of a check for a debt is not a payment, unless by express agreement. (Johnson v. Bank of North America, 5 Robt., 554, 590; Turner v. Bank of Fox Lake, 3 Keyes, 425; Hill v. Beebe, 13 N. Y., 556; Bradford v. Fox, 38 N. Y., 289.) The last case cited, was an action on an account for goods sold, for which a check had been forwarded to the plaintiff which was dishonored, and to recover the amount of which an action was brought. It was held, that the delivery of a check does not operate as a payment of a previous debt, and ¡i receipt given upon the delivery of a check acknowledging the receipt of money, adds nothing to the effect of such delivery, and is the subject of paroi proof as to its real import. It was also decided, that in an action for the collection of a pre-existing debt, the onus of proving payment was on the defendant; and to effect this, proof of the delivery to, and receipt of the check by the plaintiff not being sufficient, the defendant was bound to go further, and show that by the [34] loches of the plaintiff a loss had been incurred to be borne by some one; and when this appeared, that the law would cast the loss upon the plaintiff, and would work out such a result by making the check operate as a payment of the debt. In the ease at bar, there was no loches of the plaintiff, in omitting to present the check originally ; if there was after the bank failed, and before the action was brought in neglecting to demand payment, and to give notice of the failure of the bank, loss or injury is not to be presumed from such omission to the defendant, but he is bound to establish it. This he has failed to do, and, within the principle of the case last cited, which is directly in point, the plaintiff was entitled to a judgment for his demand. I am inclined to think that Rogers was not authorized to make an assignment of the demand due the express company; and for this amount the plaintiff cannot recover in this action. As the plaintiff was entitled to judgment for the amount of a portion of the claim, the report of the referee must be set aside, the judgment entered thereon reversed, and a new trial granted with costs to abide the event. • Judgment reversed.