Georgia National Bank v. Henderson

McCay, Judge. 1. The general principle that a bank or any other collection agent taking a negotiable paper for collection is under obligations to have it duly protested for non-payment, seems unquestionable. The agent has the possession of the paper; generally the owners are at a distance; the notary will present and protest only such papers as are presented to him, and if the duty is not on the agent to see to it, there is, ordinarily, nobody in a situation to do it. And such is the current of authority. 2d. This Court has decided, on' this very paper, that it is a bill of exchange, and not a bank check; that it was entitled to grace, and as it is payable at and by a chartered bank, that protest and notice are necessary to bind the indorsers : Henderson vs. Pope, 39 Georgia, 361. I do not propose to go over the reasons for that decision ; there is no doubt but that authorities may be found, and some of them of high character, in which such a paper as this has been held to be a bank check. One of the strongest of these cases is a decision by a no less able Judge than Judge Story. But the current of the decisions appears to be that if the element of credit enters into the paper it is not a bank check, and that the mere making of the paper payable at a future day, being of itself an element of credit, makes it a bill of exchange, and not a bank check. A check is an order to the bank to pay the money of the drawer to the payee — it is an appro [492] priation of money — cash. A bill of exchange is a matter of credit. It is drawn, looking to the future. The element of credit enters into it. This paper was not only payable at a future day, but it was avowedly not drawn upon the drawePs funds, and this the bank well knew, since its own books informed it that he had no funds there. Besides, this paper was indorsed, guaranteed by two indorsers other than the payee, and this appeared on the face of the paper. There was, therefore, none of the elements of a check in this paper, except that it was drawn upon a banker. Payable at a future time, not drawn upon any funds and guaranteed by two indorsers, it was a bill of exchange, issued and taken upon the credit of the drawer and indorsers. Assuming, therefore, that this is a bill of exchange, and that by the failure of the bank to have it duly presented on the third day of grace, and due notice to be given to the indorsers, they were discharged as we have decided in the case of Henderson vs. Pope, it follows that the holder has lost his right to go on the indorsers by the fault or negligence of the bank. Prima facie, the bank is liable for negligence just as other agents are. But it is said that agents of all kinds, except carriers and innkeepers, are only liable to ordinary diligence, and this is true. A lawyer, doctor, or mechanic, indeed, any agent is not bound at all events. Ordinary skill will excuse a mishap, even of a doctor or lawyer, and it is said that this being a doubtful matter, the bank having acted in good faith, is not liable, because it mistook the law. A case very much in point is cited, and cases laying down this general doctrine of the degree of diligence, required of agents undertaking to transact business, are numerous. For myself, I should have great doubt as to the liability of the bank, except for one thing. Whether this was a bank check or a bill of exchange may have been a doubtful matter — one upon which even lawyers, nay, Judges of great eminence, may differ. But the bank was distinctly informed by Mr. Pope, the indorser, that it was entitled to days of grace. In other words, that it was considered by [493] him as a bill; as to him this would have clearly been a waiver of presentment on the first day of the three. A presentment and notice on the third day would have bound him in any event. This notice of .Pope to the bank should have put the bank officers upon their guard. It was easy to have presented it on both days, and given notice of the non-payment on both days. Admitting that it was doubtful whether it was entitled to days of grace or not, attention was called to the fact by Pope’s notice. It was an easy thing, and one that would occur to any prudent man to present it on both days. The bank was not obliged to decide the doubt. It might well have managed so as to save the plaintiff’s right against the indorser’s, in either event. Pope notified the bank of his claim that it was a bill. Was it not ordinary prudence to so act as to bind Pope, even if it was a bill? If there was but one way open, and the right way doubtful, ordinary skill, in determining the right way, may be all that is required. But here there were two ways open. One of them was sure. It was easy to take both. Notice was given that the way proposed was wrong. In my judgment, ordinary prudence required both to be taken, and for that reason I think the bank liable. 3d. Prima facie, notes over due are not negotiated; they are dishonored — suspicious. Prima facie, every man who has the possession of a negotiable paper took it before due. Henderson has this paper now; the presumption is he had it before and at its maturity. And we think this is as well true in a suit of this kind as in a suit on the note. It was not necessary, therefore, for Henderson to prove that he was the holder of the paper at maturity. Judgment affirmed.