Gilman v. First Nat. Bank

Patterson, J. This is an appeal from a judgment entered on the dismissal of the complaint at circuit. The action was brought to recover back a sum of money which the plaintiffs claim was paid by mistake on a draft or bill of exchange presented to them by the defendant, and paid, on the 10th day of February, 1891. There is no dispute as to the facts, which are, in brief, that a Mrs. Cockran, living at Cadiz, in Ohio, deposited for collection with a bank located and doing business at that place a bond of a Kansas township. That bond was sent by the Ohio bank to a Kansas bank, which collected its amount on the 23d January, 1891. The plaintiffs were the New [496] York correspondents of the Kansas bank, and, on the day last named, that bank, by its cashier, drew a sight draft on the plaintiffs, which was, after some delay, received by the Cadiz bank, and was forwarded by that bank to the defendant for collection. Meantime, and on the 6th of February, the Cadiz bank notified the plaintiffs of the existence of the draft, and requested them to hold moneys of the Kansas bank sufficient to meet it. On the 9th February the plaintiffs telegraphed the Cadiz bank that the drawer had not sufficient funds to meet the draft. On the same day the Cadiz bank, in reply to the telegram last referred to, requested (by telegraph) the plaintiffs to apply to the draft what funds they had of the Kansas bank. There is nothing in the case to show the exact state of the account between the drawing bank and the plaintiffs, but there were several transactions had between them intermediate the 23d January and the 10th February. On the last-named day, as appears from the letter and telegrams above referred to, the plaintiffs, with •full knowledge of the fact that there was not enough money in their hands to the credit of the account to which the draft was to be charged, paid it in full to the defendant. The next day the plaintiffs made reclamation, not of the whole amount paid, but only of the amount of the deficiency in the account of the Kansas bank. There is nothing in the testimony to establish mistake of the plaintiffs. The only witness who testified on that subject is Burn-ham, the plaintiffs’ cashier, and he says he did not know what the balance on hand was to pay the draft until after the payment was actually made. His principals did, however. In the absence of any other testimony, it is quite clear this draft was paid in the usual course of business, and, notwithstanding the plaintiffs knew it was not good, in full, on the day preceding its payment. We do not think a ease of mistake was made out, such as would entitle the plaintiffs to recover, and more especially as it is clear that by reason of the payment a protest of the paper was prevented. It was a foreign bill. Bank v. Varnum, 49 N. Y. 276. The act of payment, of course, prevented the protest; and, before an action could be maintained against the drawer on the draft, protest was necessary. 2 Daniel, Keg. Inst. § 926. We think the complaint was properly dismissed, and that the judgment should be affirmed, with costs. Van Brunt, P. J., concurs.