Anderson v. Alton National Bank

Mr. Justice Green delivered the opinion op the Court. Appellant contends: Under the facts as disclosed in this record, appellee had no authority to appoint a sub-agent to transmit and collect the checks in question and if it did so it assumed the risk and consequences of such sub-agent’s negligence and must respond in damages to plaintiffs for any loss thereby occasioned. If a principal constitutes anvagent to do a business which obviously and from its very nature can not be done by the agent otherwise than through a substitute, or if there exists in relation to that business a known and established usage of substitution, in either case, the principal will be held to have expected and have authorized such substitution, and a substitute appointed by an agent who has this power of substitution becomes the agent of the original principal, and may bind him by his acts, and is responsible to him as his agent. 1 Parsons on Contracts, Sec. 94. Where a bill of exchange, payable at a distant place, is deposited in a bank for collection, that bank undertakes only to transmit to a responsible and proper agent, either in the place where the collection is to be made, or in the place nearest thereto where it has a correspondent, or an agent ■ whom it thinks fit to employ for the purpose of forwarding. It is incredible to suppose, where there is no commission charged, that the bank to which the draft or check is first sent for collection, is understood, either by it or the holder, to be responsible for the solvency, good conduct and thor • ough performance of their duties on behalf of all subsequent agents whom it may be necessary to employ. .The ordinary usage of business requires such bank to do nothing more than forward to a suitable and solvent agent, as above stated, and this is all the bank or custom can be supposed to contemplate as that duty, the accurate performance of which is guaranteed by such bank. Morse on Banks and Banking, Chap. “ Collections,” 345. This doctrine has been adopted by the courts of last resort of a number of the States of the Union: Dorchester & Milton Bank v. New England Bank, 1 Cush. 177; Fahens v. Mercantile Bank, 25 Pick. 330; Daly v. Butchers & Drovers Bank, of St. Louis, 56 Mo. 94; East Haddam Bank v. Scovil, 12 Conn. 302; Stacy v. Dane Co. Bank, 12 Wis. 620; Citizens Bank v. Howell, 8 Md. 550, and in several cases in Pennsylvania. In this State also, the same rule has been adopted. In Ætna Ins. Co. v. Alton City Bank, 25 Ill. 247, it is said in the opinion: “ Where a bank receives a bill or note for collection against a drawee or maker, resident at the place of the bank, or where the bank undertakes for its collection by its own officers, there can be no doubt it would be liable for any loss that might result from neglect. But when received for transmission to another place for collection, it has fully discharged its duty by sending the instrument in due season to a competent, reliable agent, or correspondent, with proper instructions for its collection.” This court has adopted the same doctrine in Waterloo Mining Co. v. H. Kuenster & Co., 58 Ill. App. 61, in which all the questions material in the case at bar are fully discussed, and the conclusion reached is fortified by abundant authorities. We find from the evidence in this case that the checks <■ were sent to appellee to be transmitted for collection, with-. out compensation. That appellants knew the collection would necessarily require the substitution of a sub-agent by appellee, in accordance with a known and established usage, and was not intended to be made by appellee or its officers, and hence appellant authorized such substitutions; that appellee in due season transmitted the checks, with proper instructions, to a solvent, suitable and competent correj spondent, in accordance with the general usage and custom ■ among bankers in such cases, and thereby fully discharged v' its duty to appellants and was guilty of no negligence; that v the correspondent so selected became and was the agent of ^appellants, and if any loss accrued to the latter by reason i of its negligence, appellee incurred no liability therefor. It follows, therefore, that we hold the law to be as held by the trial court—that the propositions of law which. were refused to be held, were properly refused, and the proposition modified was properly modified. The finding and judgment for defendant was right and the judgment is . affirmed.