Hannon v. Allegheny Bellevue Land Co.

Opinion by Head, J., By the operation of our defalcation act the single record before us really embraces two separate and distinct causes of action. ,It is conceded that the plaintiff had entered into a written agreement with the defendant for the purchase of a lot of ground and had paid a part of the purchase price prior to the transaction out of which this litigation arises. By the terms of her contract, upon the payment of the balance of the purchase price she was entitled to receive a deed for her lot. On October 16, 1905, she went to the defendant’s office to pay this balance, which the parties agree amounted to $740. The verdict of the jury establishes the fact that she actually paid this sum in a manner acceptable to the defendant and received from its representative a receipt in full which entitled her to a deed. The defendant having refused to execute and deliver the deed, the plaintiff elected to rescind the contract and brought this action to recover the money she had paid. In the absence of a legal defense her right to so recover would be clear. To this claim the defendant interposed a single defense of fact, viz., that although the plaintiff admittedly owed $740, she had paid but $640, and that — 270 — by a mistake of its representative who received the money, it had been incorrectly counted as $740 and the receipt thus given. The conflicting testimony of the parties on this disputed question of fact was fairly submitted to the trial jury in a charge, to which, in this respect, there is no complaint, and the appellant now agrees that the verdict of the jury has established that fact against it and therefore that its direct defense to the plaintiff’s claim has failed. It further appears that in making the payment of $740, which the verdict has established she paid, plaintiff gave to the defendant and the latter received a teller’s check on the Enterprise National Bank of Pittsburg for $607. This check had been drawn by the teller of that bank a day or two previously to the order of one Margaret Welsh, who had indorsed it and delivered it to the plaintiff. She in turn indorsed it before delivering it to the defendant. The transaction occurred about half past one o’clock p. M. on October 16. In other words, during banking hours of that day. The Enterprise Bank, on which the check was drawn, was at that time open for business and paying all demands properly made upon it. It thus remained open during the entire day of October 17, and until some time after noon of the eighteenth when it was closed by the bank examiner, and never afterwards opened its doors for business. The check in question was never presented for payment until October 19, when of course payment was refused. The check was protested and returned to the defendant. It then demanded from the plaintiff the return of the money called for by the check, but the plaintiff refused to honor this demand because the loss, as she contends, occurred by reason of the failure of the defendant to present the check for payment within a reasonable time after its receipt. In the trial of the case in the court below the defendant undertook to set off the amount of this check against the claim of the plaintiff, and having, as we have seen, first alleged that it was not guilty of any breach of contract for the sale of the lot, — 271 — demanded a certificate of balance in its favor for the amount of the check. Under ordinary conditions it would seem to be well settled that in a case like the present where all of the parties interested in the check, as well as the bank on which it was drawn, are located in the same city, the delay in presenting this check was unreasonable, and the consequent loss ought not to be visited upon the plaintiff: Bank v. Weil, 141 Pa. 457. Whilst the doctrine of that case has been slightly modified in the later cases of Loux & Son v. Fox, 171 Pa. 68, and Willis & Co. v. Finley, 173 Pa. 28, the modification applies only to cases where the transaction occurred after banking hours of the day on which the check was received. In such cases the courts have held that in testing the diligence of the holder of the check in presenting it for payment the day of its receipt after banking hours became practically dies non, and the transaction was to be viewed as if it had occurred at the opening of the following business day. If the transaction had been in nowise unusual we do not understand the able counsel for the appellant to contend that the doctrine of the cases cited would not apply. He alleges, however, that the defendant’s representative who conducted the business mistakenly read the check as calling for the payment of $707 instead of $607. She so testified, and further that the plaintiff had paid in cash but the sum of $43.00 instead of $143, according to the plaintiff’s testimony. When at the conclusion of the day’s business she undertook to balance her cash she found that the check called for but $607; that she had therefore 'received $640, and that having by mistake credited the plaintiff with $740, her cash was $100 short. Having discovered this mistake, the check was held and an effort made to find the plaintiff. She could not be located until the morning of the eighteenth, when she insisted that no mistake had been made; that she had paid in $143 in cash, which added to the correct amount of the check amounted to $10.00 more than the final payment on her — 272 — lot. The $10.00 surplus was refunded to her and the receipt given to her. The defendant then started the check . in the usual course of business, but, as we have already-seen, it was not actually presented for payment until the nineteenth, the day after the bank closed. The defendant argues that even though its representative had made a mistake it was an honest mistake of fact and that it was not bound to present the check for payment until the plaintiff could be found and her version of the transaction obtained. The verdict of the jury, however, has determined that the plaintiff actually paid the necessary amount of cash to bring up the true amount of the check, $607, to the amount of the balance she owed, to wit, $740. If this be regarded as a fixed fact, then the defendant’s cash could not have been short, as contended. But in any event, acceding to the defendant’s claim that the mistake was an honest one, it nevertheless was a mistake of the defendant. The plaintiff was in nowise at fault. And if the delay in presenting the check can be excused only by the careless mistake of the defendant or its clerk, it is hard to see why the consequent loss should be saddled upon the ' shoulders of the plaintiff, who was entirely free from fault, to relieve,the careless error of another. Moreover, even if it were honestly believed that the plaintiff had paid in but $43.00 in cash, and as a consequence that she still owed $100 of her purchase money, this would seem to be no reason for holding up the check which she had tendered and which the defendant had accepted. as so much cash. Its amount was fixed and could have been at any time abundantly established by incontrovertible records after its presentation and payment as well as before. We are of opinion, therefore, that in this aspect of the case the defendant has shown nothing which ought to relieve it from the consequences of an unreasonable delay in presenting the check for payment. But it is ingeniously argued that the' principles of law we have stated do not apply in this case because the check — 273 — was not that of a private depositor drawn on the bank, but was what is known as a teller’s check. It is urged that under sec. 185 of the negotiable instruments act, Act of May 16, 1901, P. L. 194, “A check is a bill of exchange drawn on a bank payable on demand;” that sec. 130 of the same act declares, “Where in a bill the drawer and the drawee are the same person, .... the holder may treat the instrument at his option either as a bill of exchange or a promissory note.” It is argued, therefore, that since the passage of this act the defendant, the holder, had a right to regard that check as a promissory note, and that in such case the delay in presentation was not unreasonable, or at least could not be so declared as matter of law by the court. We are unable to assent to the soundness of this reasoning, or the correctness of the conclusion drawn therefrom. Section 130 of the act referred to is a part of chap. II which treats distinctively of bills of exchange, whereas sec..185 is a part of chap. Ill which deals with promissory notes and checks. Although the legislature has seen fit to define a check broadly as a bill of exchange, it would be idle to assert that the difference between checks and bills of exchange is not thoroughly known and understood in the commercial world. For all practical purposes in, modern mercantile transactions a teller’s check is but a substitute for a certified check and much more closely resembles it than it does a bill of exchange, strictly speaking, and we think it is none the less a check because drawn by an executive officer of the bank upon the institution he serves. In the very next section following the one quoted, viz., in sec. 186, the act declares, “A check must be presented for payment within a reasonable time after its issue.” This declaration was doubtless made by the legislature in the light of the decisions of the court which had previously defined what was a reasonable time for the presentation of a check, and we see no reason to conclude that it was the legislative intention to make any change in the law, in this respect, as it had been previously declared. The claim of the defendant to recoup from the plaintiff — 274 — rests upon an alleged breach of her contract of indorsement. That contract remains in essence and substance what it was before the passage of the act referred to. The obligation of an indorser is still as it was, conditional not absolute, and it is one of the conditions on which that obligation rests that the indorsed instrument shall be promptly presented for payment at the time and place fixed therefor and that due notice of its dishonor be at once given. We are all of the opinion that the record in this case exhibits no reversible error and the assignments are therefore dismissed. Judgment affirmed.