Gilliam v. Merchants' National Bank

Mr. Presiding Justice Harker delivered the opinion of the Court. On December 31, 1896, Singer & Wheeler, a corporation doing business at Peoria, Illinois, drew a check for $118.35 in favor of appellant upon appellee, a bank with which it had been doing business as a corporation. The check was presented for payment on January 2, 1896 which was refused because Singer & Wheeler had no funds in the bank. It was again presented on January 3d, and payment refused for the same reason. On January 8th a deposit was made of $8,000 which was all paid out on checks and overdrafts except $933.61 which balance was on deposit when Singer & Wheeler made a deed of assignment for the benefit of creditors, June 10, 1896. The deed of assignment was filed for record and the assignee entered upon the discharge of his duties January 11th. On January 15th the check was agaiu presented ■to the bank and payment refused. This suit followed, resulting in a verdict and judgment for the bank. In seeking a reversal of the judgment, appellee urges an application of the rule of law in this State that the delivery of a check upon a bank where the drawer has funds to satisfy it, is an assignment pro tanto of the deposit to the payee. Under that rule, however, the liability of the bank is affected only by a presentation of the check. Although at the time of drawing the check there were funds sufficient to satisfy it, yet if they were exhausted by the payment of checks subsequently drawn and before its presentation no liability would attach to the bank. 2 Morse on Banks, Secs. 450, 453; Coats v. Preston, 105 Ill. 410. Appellant encounters a most serious obstacle in the fact that when he presented his check on the 2d and 3d days of January there was no deposit to draw against. It is contended, however, that a presentation on those dates involved a duty upon the bank- to reserve from the deposit made upon the 8th of January an amount sufficient to satisfy it. Eo authority is cited in support of that contention, and we do not think a duty of such character devolved' upon the bank. When the payment of a check is refused because the drawer has no funds, no such presumption should obtain as that the check remains outstanding for payment. The natural course for the payee to pursue in such case would be to take immediate steps against the drawer to make good the dishonored check. The contention of appellee involves the absurd proposition that a bank is required to keep a record of all checks refused payment because of lack of funds of the drawer, and then retain from any future deposit an amount sufficient to pay them. Again, there is no proof in the record that when the check was presented on the 15th of January, there was money in the bank to pay it. Such proof was necessary to a recovery, independent of the fact that an assignment had been made for the benefit of creditors. International Bank v. Jones, 15 Ill. App. 594. According to the rule announced by the Supreme Court of the United States in the case of Laclede Bank v. Schuler, 120 U. S. 591, appellee was not entitled to have his check paid out of the balance of $933.61 when presented for payment on January 15th, because four days before that time the assignee had qualified and was entitled to the fund. We do not base our judgment upon that rule, however, but affirm for the other reasons set forth in this opinion. Judgment affirmed.