Lawrence ex rel. De Wolf v. Schmidt

Hr. Chief Justice Walker delivered the opinion of the Court: According to the rules of the mercantile law, the drawer of a draft or check must have due notice of its dishonor before he can be held liable for non-acceptance or non-payment. But he may waive such notice, or he may so act as to amount to a waiver of notice. It is always presumed that he draws upon funds in the hands of his banker, and hence the necessity of such notice that he may protect his interest and secure his funds in the hands of .the party on whom the bill is drawn. But when he has not drawn against funds, the necessity for notice does not exist. When he has not provided funds for the payment of the bill or check, he has no right to expect that' it ' will be honored, and his interests do not require notice of nonacceptance or of non-payment. In such a case he is presumed to have waived notice, and it need not be given to hold the drawer liable. It has even been held to be,a fraud to draw a bill or check where no funds have been provided for its payment. In the case of the Galena Insurance Company v. Kupfer, 28 Ill. 332, it was held that where a party draws for current funds, the payee is not bound to receive depreciated paper. A party drawing upon another must provide the funds and the kind for which he draws, for its payment. If he fails to do so, it is the same as if no funds were provided. The payee, in a case where depreciated funds have been deposited, and his draft is for current funds, is not bound to receive the funds on deposit, nor is the drawee bound to pay other and different funds than those placed in his hands by the drawer. In this case the check was drawn for money; for dollars and not for bank bills, or other kinds of circulating medium. The check was presented on the day it was drawn, and payment in money was refused, but bank bills at thirty to forty peí cent, discount was offered and refused. It also appears that the drawer did not have cash — money—in the hands of the drawee, and hence notice of non-payment was unnecessary. He had no right to believe it would be paid in money, or that the holder would receive depreciated bills. Upon its non-payment the drawer’s liability was fixed, without any steps. The court below therefore erred in rendering judgment in favor of defendant, and it must be reversed and the cause remanded. Judgment reversed.