Peterson v. Union National Bank

The opinion of the court was delivered, March 26th 1866, by Strong, J. That the check of Stamford & Houston was not actually paid is a conceded fact. No more is claimed than that the bank paid it in legal effect, by charging it to the drawers, and crediting its amount to the plaintiffs. But what of that ? Surely [209] it needs no argument to prove that the plaintiffs can retain no credit obtained by their fraud. The drawing a check upon a bank in which the drawer has no funds, and uttering it, is a fraud. It amounts to a false affirmation, that the money is there to meet it. Hence, it is a deceit practised upon any person to whom the cheek may be negotiated, and equally upon the bank upon which it may be drawn. It is manifestly impossible for the officers of a bank to keep ever in memory the state of each depositor’s account. To a certain extent confidence is reposed in the depositor, that he will not present for payment a check which he has not provided funds to meet, and the abuse of that confidence is dishonest. It is not easy to see how it is less dishonest in the holder of a check drawn by another to present it for payment, when he knows the drawer has no funds in bank to meet it. His knowledge makes him a party to the fraud of the drawer, and he becomes a willing assistant therein. It was therefore a most important inquiry in this case, whether the plaintiffs, at the time when they sent the check to the bank to be credited to their account, knew that Stamford & Houston, the drawers, had no funds there to meet it. If they had such knowledge, they made themselves parties to the false affirmation of the drawers, and thus secured the credit which they seek now to enforce. And we are of opinion that the case was correctly submitted to the jury. The evidence was that the check was presented after 1 o’clock, and there was very considerable evidence-that before that hour the plaintiffs had been informed that the drawer would not make the cheek good. It would then have been gross error had the court directed a verdict for the plaintiffs, or refused to submit to the jury the question whether the check was fraudulently presented, that is, presented with knowledge that Stamford & Houston had no funds in bank to meet it — knowledge withheld from the officers of the bank. The principal ease relied upon by the plaintiffs, Levy v. The Bank, 4 Dali. 236, and 1 Binn. 36, is distinguishable from the present by the very important" fact that the depositor there was ignorant of the worthlessness of the check when he deposited it, and obtained a credit for its amount. ____ We hold then, that the exceptions taken to the charge of the learned President of the District Court are all unfounded. And so are the exceptions to the admission and rejection of evidence. They are all unimportant except the first, and that will appear from what has been said to be unsustainable. It certainly was a material fact, that the deposit of the check was not made until after the plaintiffs had been informed that one of the drawers had gone away, and that the check could not be met. The second, third, fourth and fifth assignments of error may be dismissed, with the remark that they are immaterial. Even if [210] there was error in the rulings of the court referred to, which we do not admit, it was entirely harmless. The judgment is affirmed.