Fifth N. Bank v. Ashworth

OPINION, Me. Justice Paxson : It is safe to say, as a general rule, that when a bank receives a check from one of its depositors for collection, it must return him the check or the money. It is also equally clear that if the collecting bank surrenders the check to the bank upon which it is drawn, and accepts a cashier’s check, or other obligation, in lieu thereof, its liability to its depositor is fixed, as much so as if it had received the cash. It has no right, unless specially authorized to do so, to accept anything in lieu of money. For this latter proposition it is sufficient to refer to the Merchants’ National Bank of Philadelphia v. Goodman, 109 Pa. 422; Marine Bank v. Fulton Bank, 2 Wal. 252; Ward v. Smith, 7 Ia. 447; McCulloch v. McKee, 16 Pa. 289; Commercial Bank of Pa. v. Union Bank of New York, 1 Kern. 203; Graydon v. Patterson, 13 Ia. 258. When payment of the check in question had been refused [219] by tbe Penn Bant, and it had been duly protested, the Fifth National Bank of Pittsburgh, in this case the collecting bank and defendant below, could have relieved itself from liability by returning the dishonored check to the plaintiff below who had deposited it; or, it might, perhaps, have called upon the latter for instructions as to any further proceedings, and had it received and followed such instructions, I am unable to see how any liability could have attached to it. Neither of these modes was pursued. The defendant retained the check, and made a further attempt to collect it. The plaintiff alleges that in doing so the defendant failed to use due diligence, and has thereby rendered itself liable to him for the debt. The check in question was passed through the clearing house on May 21, 1884, but was not paid, the Penn Bank closing its doors on that day. It was opened again on Friday, May 23d, at about 3 o’clock p. m. It remained open all the next day (Saturday), but closed finally on the following Monday morning. All claims presented against it on Saturday were paid; the checks that came through the clearing house on Monday were not paid. The defendant bank sent this check, with others, to the Penn Bank on Saturday, and received what has been called a cashier’s check for the aggregate amount. The cheek in controversy was for $2,622.25, drawn by T. J. Watson, and was delivered to the Penn Bank when the cashier’s check was taken. It was charged up against Mr. Watson’s account in the Penn Bank, and was placed on file there with the usual marks of cancellation upon it, and is still retained by that bank. The cashier’s check was sent to the clearing house on Monday, and when it reached the Penn Bank the latter had finally closed its doors, and shortly thereafter made an assignment for the benefit of its creditors. We need not discuss the question whether the defendant failed to exercise due diligence in not sending the dishonored check through the clearing house on Saturday. That it could have been done, and was done by some other parties, distinctly appears by the evidence, and is not disputed. We think the defendant bank fixed its liability by surrendering the cheek to the Penn Bank and accepting the cashier’s or teller’s check of that bank. As between the defendant and its depositor, this amounted to payment. The plaintiff has neither his check nor [220] bis money. Watson’s account with tbe Penn Bank was good when the cheek was charged up to him. I am unable to see, therefore, that the plaintiff has any remedy against either Watson or the Penn Bank. It was alleged, however, that in any event the defendant should have credit for the sum of $1,025, which it is said Watson paid the plaintiff on account of this check after the same had been protested. There is no assignment of error which specifically covers this point, nor was the court below asked to so instruct the jury by any point or written request appearing in this record. It is true the second assignment of error is perhaps broad enough to cover it. The fact remains, nevertheless, that there was no request for the specific instruction referred to. Nor are we able to see how it would have benefited the defendant had it been asked for. The equities, if any existed, between the plaintiff and Watson, could not have been settled by these banks. The collecting bank could have demanded no less than the face of the cheek, and the Penn Bank was bound to honor the check for its full amount, if in funds. It may be Mr. Watson may have a claim against the plaintiff in case the check is paid, but that does not concern the defendant bank. Judgment affirmed.