Brigg v. Central National Bank

Charles P. Daly, Chief Justice. The judgment should be affirmed. The appellant claims that this is an action for money had and received, and cites The People v. The Merchants', &c. Bank of Troy (78 N. Y. 269), as authority for the proposition that an action for money had and received cannot be sustained unless the money was actually received, either by the defendant or through his agent; in respect to which, in the present case, it is sufficient to say what was said in the case that the appellant cites of People v. Merchants', &c. Bank, that “ all the facts are set forth in the complaint, and that if they disclose a good cause of action, the plaintiff may recover, notwithstanding he may have assigned an insufficient gi'ound of recovery.” The grounds assigned for a recovery by the plaintiff are the facts stated in his complaint, and if they constituted a cause of action, it is wholly immaterial whether the action is called an action for money had and received or what name is given to it. The facts substantially stated, and which have been proved, are that the plaintiffs deposited with the defendants for collection a check for $610.97, drawn by O. W. Haines on the First National Bank of Newark, New Jersey; that the defendants forwarded the check to that bank, which bank was then, and had been for fifteen years, the defendants’ collecting agent of checks, drafts and other commercial paper, in New Jersey. The National Bank of Newark, on receipt of the check, charged it against the account of the drawer, and as they kept a collection account with the defendants they credited the defendants with the amount of the check, in that account, as a cash item, in pursuance of an arrangement made between the two banks, by which checks, drafts and commercial paper, when collected, were credited to the defendants in a collection account, which was settled every Tuesday by the Newark bank, and the amount collected remitted to the defendants by draft. When the Newark bank charged the check to the drawer’s (Haines’) ac [181] count, Ms account had been overdrawn; but he had been in the habit of so overdrawing, having done so some thirty times during the nine months preceding, and in this instance he made good the overdraft, and the check was returned to him as a paid voucher. On the day after the check was charged to his account and credited by the bank to the defendants’ collection account, the Newark bank failed and passed into the hands of a receiver. The charging of the check by the Newark bank to the drawer's account, and crediting the amount of it in the collection account kept with the defendants, was a payment of the check by the bank to the defendants as effectually as if the bank had paid it in money over their counter. In Eyles v. Ellis (4 Bing. 112), the defendant had been directed by his creditor to pay a certain sum in a bank where they both kept accounts. The defendant accordingly directed the bank to transfer that amount from his account to the credit of the plaintiff’s account, which was done, and the bank failed before the plaintiff knew of the transfer. The court held that this was a payment of the amount to the plaintiff; that although no money was transferred in specie, it was an acknowledgment by the bank that they had received that amount for the plaintiff ; that the plaintiff might then have drawn for it, and the bank could not have refused to pay his draft. This was a case of money paid into a bank. Bolton v. Richardson (6 T. R. 139), was a case of money to be drawn from one. A. held B.’s check on a bank where each had an account. On presenting the check, the amount of it was transferred from B.’s account with the knowledge of both parties. The bank failed before the check fell due ; and it was held that this was a payment of the check. In First National Bank of Jersey City v. Leach (52 N. Y. 352), it was held that the certifying of a check by a bank in which the drawer had funds to meet it, where the bank within an hour or so failed, operated as a payment of the check between the parties. I see nothing to distinguish this case from those above cited. It is simply the presentation of a check to a bank by a person entrusted with the collection of it, where both he and the [182] drawer have accounts in the bank, and where the bank, instead of paying the. check in so much money, simply charges the amount of it against the account of the drawer and credits the amount to the account of the collector, returning the check to the drawer as collected and paid. As between the defendants’ bank and the Newark bank, this mode of collecting—by placing the amount to the defendants’ credit and settling the collection account every Tuesday —had been in use from the year 1876, the time of settlement before that being every ten days ; and when this amount was transferred from Haines’ accpuut, and credited in the account of the defendants, the check was paid as effectually as if the amount of it had been handed to the receiving teller of the defendants’ bank in national currency. The plaintiffs have no claim against the Newark Bank (Commercial Bank of Pennsylvania v. Union Bank of New York, 11 N. Y. 211). It was their agent for the collection of the check. It did what it and the defendants regarded as the collection of it, and if the defendants did not get the proceeds, in consequence of the Newark bank’s suspending payment, it was owing to the business arrangement between the two banks by which collections made were credited to the defendants, and the. collection account settled every Tuesday, and but for this arrangement, which was for the convenience of both banks, the money could have been drawn upon the presentation of the check, for the Newark bank met all its engagements that day up to the close of business hours. The plaintiffs, as I have said, can maintain no action against the Newark bank to recover from it what they have never received— the amount of the check. The defendants, on the contrary, are creditors of that bank to the amount of it, and have already received a dividend upon it from the assets of that bank. When the Newark bank stopped payment and went into the hands of a receiver, it owed the defendants a balance of $5,976.22 ; and the defendants filed and proved claims before the receiver for that amount, as expressed in the claim for collecting sundry accounts in respect to which the defendants were acting as agents, and upon the claims so filed, a dividend [183] was declared of 80 per cent., 70 per cent, of which the defendants had received at the time of the trial. The judgment should be affirmed, J. F. Daly and Van Hoesen, JJ., concurred. Judgment affirmed.* Footnotes [*] The judgment entered upon this decision was affirmed by the Court of Appeals, May 30th, 1883 (see 89 N. Y. 183).