Saylor v. Bushong

Mr. Justice Trunkey delivered the opinion of the court, April 17th 1882. It may be regarded as settled that the holder of a check can [27] not maintain an action in liis own name against the drawees, thougli they have sufficient funds of the drawer, if they refuse to accept it: Bank of the Republic v. Millard, 10 Wallace 152; Carr v. The Bank, 107 Mass. 45. A check may be- revoked before presentment by the drawer’s death, or by his order not to honor it, but if not revoked, it is the duty of the bank to pay on demand. For breach of this duty, the drawer has a right of action. If the check has not been revoked, by common usage, the holder expects it will be paid on presentment. lie may suffer a real injury by refusal, for which he may be without redress, as in case of the drawer becoming insolvent before recourse to him could be effectual. It would seem that the holder ought to have a remedy against the bank for a wrongful refusal of payment, arising from an implied promise from the usages of business, or the course of dealing between the parties; and so it was held in some cases prior to Bank v. Millard. If the bank, in violation of its duty, dishonors a check, the holder may be injured quite as much as the drawer, and the bank ought to be answerable to each party injured by breach of the contract. Prior to acceptance, it is said', there is no privity between the holder, and the bank, and, therefore, the holder cannot maintain an action. But if the bank expressly or impliedly promise the drawer to pay the check, the holder may sue if payment be refused. Thus, when a check was drawn to C., and B. indorsed C.’s name without authority and received the money, the bank having deducted the check from the drawer’s account and settled with him on that basis, it was held that the conduct of the bank was an acceptance, and that 0. could recover from the bank: Seventh Nat. Bank v. Cook, 73 Pa. St. 483. When a depositor settles his account with the bank, and leaves the exact amount of an outstanding check expressly for its payment, and the bank tacitly retains the money and settles on that basis, it is liable to the holder on the implied acceptance. All parties to the check would naturally infer from such action that the bank retained the money for use of the holder. Saylor received the check on October 18th 1877, and presented it in November following, when payment was refused, with the remark that the bank had suspended and was using all alike. In May 1878, Yeich called on the bank for a note for the amount due, to be determined by the stubs of his checkbook, and a note was given for the balance. In making out the balance Saylor’s check was deducted from the credits, just as the other checks were, except that some interest was allowed for Saylor. Yeich did not want to make himself liable to Saylor by including his check in the note, and directed the check to be left out. These are the facts the jury would likely have found [28] had the testimony been submitted, and they could reasonably have inferred an agreement by the bank to keep the money and pay the check. Saylor was holding the chock, and the defendants knew it. In settlement with the drawer, at liis request, they kept of his money the amount of the check for the purpose of its payment. No other purpose was expressed, and no other could be inferred. It matters not that the amount of the check was not formally charged against Yeich and credited to Saylor. Had that been done, it would have evidenced the plaintiff’s right to recover on the count for money had and received, held by the defendants and appropriated by the drawer to the plaintiff’s use, and, therefore under an implied promise to him to pay it on demand: Seventh Nat. Bank v. Cook, supra. If the facts are proved otherwise than by the books, the result is the same. It is unnecessary to specially remark the several assignments of error. The learned judge of the Common Pleas thought the evidence insufficient to warrant a finding' by the jury that, in the settlement, the defendants kept the amount of Saylor’s check under an agreement with Yeich to pay the same to Saylor. We think it was ample, and should have been submitted. Judgment reversed and venire facias de novo awarded.