Morrison v. McCartney

Napton, Judge, delivered the opinion of the court. This was a suit by Morrison and Lackland upon a check, payable in currency, drawn by the defendant upon E. W. Clark & Brothers, bankers in St. Louis, in favor of Bohn & Co., and endorsed to plaintiffs. The check was dated and [187] delivered to Bohn & Co. on the 2d of October, 1857, and transferred by endorsement to the plaintiffs on the same day. It was not presented to the drawees until the 29th of January, 1858, when payment was refused, and it was duly protested and notice given to the defendant. It appears that about three o’clock of the 3d of October, the house of Clark & Brothers was closed or stopped payment; but on the 6th of October, 1857, the defendant, who had previously commenced suits by attachment, compromised these suits, settled with Clark & Bros, and withdrew his deposits. The question in the case was whether the plaintiffs were entitled to recover, notwithstanding their failure to present the check on the day after it was endorsed to them, upon showing that the drawer sustained no injury by the delay, and that before suit brought, and within a reasonable time, demand, protest and notice were duly given. The law on this subject is stated in Kent’s Commentaries, as follows: “ The drawer of a check is not a surety, but the principal debtor, as much as the maker of a promissory note. The check is the acknowledgment of a certain sum due. It is an absolute appropriation of so much money in the hands of his banker to the holder of the check, and there it ought to. remain till called for; and unless the drawer actually suffers by the delay, as by the intermediate failure of his bank- ' er, he has no reason to complain of delay not unreasonably protracted. If the holder does so unreasonably delay, he assumes the risk of the drawee’s failure, and he may, under circumstances, be deemed to have made the check his own to the discharge of the drawer. But this is quite distinct from the strict rule of diligence applicable to a surety, in which light stands the endorser, who has a right to require diligence on the part of the holder to relieve him from responsibility.” (4 Kent. 549.) This view of the law is adopted by Judge Story in the chapter, in his work on promissory notes, devoted to the subject of checks. His language is that “ the drawer (of a check) will at all times be liable to pay the same, if the [188] holder can show that the drawer has sustained and can sustain no loss or damage from the omission to demand payment, at an earlier date, of the bank or banker on whom the check is drawn.” “In case of a check,” says Judge Story, “the drawer is treated as in some sort the principal debtor, and he is not discharged by any laches of the holder in not making due presentment thereof, or in not giving him notice of the dishonor, unless he has suffered some loss or injury thereby, and then only pro tanto." (Story on Prom. Notes, 492.) The same doctrine is maintained in the most recent decisions of the highest courts of New York. (Little v. Phœnix Bank, 2 Hill, 425.) The opinion of Judge Cowen, in Hawkes v. Anderson, 21 Wend. 372, has not been sustained. In a word, this opinion appears to prevail generally both in England and in the United States, where the question has arisen. (Alexander v. Burchfield, 3 Scott, N. R. 558 ; Robinson v. Hawkeford, 9 Q. B. 52; Byles on Bills, 14, and note 2.) The justice and policy of the rule are sufficiently obvious, and are forcibly alluded to and illustrated by Judge Story, in his opinion in the matter of Brown. (2 Story R. 516.) “ If the drawee, upon the presentment, refuses to pay the clerk because he has no funds, then the drawer is not injured; and if he has funds, and refuses to pay, then, if the bank is still in good credit, as the drawer has sustained and can sustain no loss, there is every reason to hold him liable therefor. Every check, is prima facie presumed to be given for value received by the drawer; and if, by reason of the want of due presentment or want of due notice of the dishonor, he is to be totally exonerated, he pockets both the original consideration and his funds in the hands of the bank or banker. In such a case, can it be said, with truth or justice, that he is to be enriched at the expense of the holder of the check ? or that he shall not be deemed to hold the money as money had and received for the use of the holder, either because he had no funds in the bank or because he still retains those funds appropriated to the use of another for his own use ?” The argument seems to be conclusive; whether it is not [189] just as applicable to bills of exchange is another question not necessary to be considered. (See Edwards on Bills, p. 396.) In the case of St. John v. Homans, 8 Mo. 382, decided by this court in 1844, the judgment turned upon the fact of a loss to the drawer of the check. An opinion was expressed that the weight of authority recognized no distinction between the degree of diligence required in checks and bills of exchange in determining the responsibility of the drawer. However .that may have been at that time, the current of authority now is, as we have seen, decidedly the other way. The forty-fourth section of the first article of the act concerning banks and banking institutions, passed in 1857, declares : “ That all drafts, notes, money orders, bills of exchange and checks drawn by individuals, companies, private firms, brokers, bankers, banking-houses, on banks or brokers, banks or incorporated companies, payable in currency, are hereby made payable in silver and gold, or the notes of specie-paying banks of the state of Missouri; and all such paper drawn by any bank, broker or incorporated company on any individual, company, private firm, or incorporated company, shall be payable in like manner.” By this provision it is clear that the check upon E. W. Clark & Bros. was payable in specie. The inquiry, at the trial, concerning the depreciation - of currency from the first to the sixth of October, was therefore irrelevant. It is of no consequence whether the instructions on this subject were correct or not, since it is plain that the defendant was not prejudiced by them. It was of no importance to the defendant whether currency depreciated or not during the period intervening between the date of the check and his withdrawal of his funds from the house of Clark & Brothers, since the check, although expressed to be payable in currency, was by law payable only in specie or in the notes of specie-paying banks of this state. The other judges concurring, the judgment is affirmed.