First National Bank v. McMichael

Mr. Justice Green delivered the opinion of the court, The learned court below left to the jury the question [464] whether the defendant bank had accepted the check upon which the suit was brought. This is necessarily a question of fact and was therefore proper for the determination of the jury unless it can be truly said there was no evidence of acceptance. The action of the court in submitting the question, constitutes the substance of the only two errors assigned. It is contended on behalf of the bank that the only modes of acceptance which would bind the bank by a legal obligation to the holder, are a certification of the check or charging it to the account of the drawer. Certainly, this proposition is too broadly stated, and cannot be sound, since it would exclude the case of an express acceptance in words, and also a retention of the check and a positive promise to pay it. The case of Bank v. Millard, 10 Wall., 152, relied upon by the bank does not decide that certifying and charging up the check are the only modes of acceptance, but simply that those modes will impose an obligation upon the bank to pay the holder. In this case the bank received the check by mail from another bank with which it had been deposited for collection. It was dated March 5th, 1875, and was received the morning following by the defendant bank. There was more than enough money to pay it to the credit of the drawer of the check at that time and continuously thereafter until March 10th. The check was retained by the defendant bank until the 10th, when it was protested in consequence of a letter from the drawer, an insurance company, directing the defendant not to pay the check. This letter was written on the 8th and received on the 9th of March, and the next day the check was protested. The letter from the collecting bank which enclosed the check in suit, and another, contained the following direction, “Do not hold collections. Return promptfy if not paid.” The evidence also showed that the defendant bank was very short of actual money in hand about that time, often being obliged to borrow small sums, fifty to a hundred dollars, to meet current demands. In these circumstances the question is, was there any evidence of acceptance of the check in suit by the defendant bank? If there was, the ruling of the court below was correct. It seems to us the 5 facts in evidence were highly convincing proof of the fact of ^acceptance. Bank checks are payable on demand upon mere .presentation. They constitute by far the largest part of the ..practical currency of the business world, and are of the ¡greatest possible consequence in commercial transactions. A bank is not bound, by a legal obligation to the holder, to pay or accept a check drawn by a depositor, although there may be funds of the drawer sufficient for the purpose to his credit at the time of presentment. But if it does not pajf or accept, it [465] is bound to refuse. It has no right to receive and keep the check indefinitely, thereby leaving the holder to suppose that it has accepted the check and assumed its payment. In Morse on Banking, p. 248, it is said: “ The hank has no right to defer the payment with the intention of making or refusing it at a later hour, according as it shall be influenced by subse- ’ quent occurrences. If payment is demanded at noon upon a j check which the depositor’s unincumbered balance at that t hour is sufficient to pay in full, the obligation of the bank ; to pay it in full is at once mature and perfect.” < In the cases of Kilsby v. Williams, 5 B. & Ald., 815, and Boyd v. Emmerson, 2 Ad. & Ell., 184, it was held that where the check was drawn upon the persons who were bankers both for the drawer and the payee, the bankers were entitled to one day’s time to determine whether they were in funds with which to pay the cheek, and that by giving notice of refusal on the following day, they were relieved from liability merely on the ground that they had retained the check for the one day. These rulings were put expressly upon the ground that the bankers were the agents of the payee to receive payment as soon as the money could ho collected, and were therefore entitled to the usual time allowed to collecting agents. In the first of the cases cited the check was paid in without anything being said, or any entry made, but there was a recovery notwithstanding a notice of refusal given the next day, because, during the day sufficient funds were paid in by the drawer to make the check good, and it was held to be the duty of the hankers, as the payees’ agents, having retained the check to apply the first moneys coming in, to its payment. In the second case there was no recovery, because the bankers were not placed in funds by the end of the day, and they gave notice of refusal the next day, and this was held to be in sufficient time to relieve them from liability on the mere ground of delay in giving the notice. But in neither of these cases was it intimated that a delay of more than one day would have been tolerated, whether the bankers were in funds or not. In our own recent case of Saylor v. Bushong, 4 Out., 28, it was hold that an acceptance of the check might be implied from the circumstance that in settling the drawer’s account, the drawees retained an amount sufficient to meet the outstanding check drawn in favor of the plaintiff. In the present case it is not pretended there was any refusal of the check at the time of its presentment, or for several days thereafter. The depositor’s account was much more than good for the amount of the check during all that time. Both the holder and the collecting bank might well have inferred the check was or would be paid. The delay in actual pay [466] ment was easily accounted for, both by the way in which the defendant bank usually paid such checks, and by the fact that it was short of money at that time. The delay, therefore, was entirely consistent with an acceptance, and was quite inconsistent with a refusal, since, if a refusal was intended, notice would naturally, and ought legally, to have been given at once, either on the same, or at the farthest, the next day. An acceptance was therefore the natural inference from all the facts, and the court was right in submitting, and the jury in finding, the fact of acceptance. Judgment affirmed.