Kraetsch v. City of Chicago

Mr. Presiding Justice Gridley delivered the opinion of the court. Counsel for plaintiff contend that the trial court erred in entering judgment against the plaintiff and should have entered a judgment for $1,000 against the defendant. After careful consideration of the facts of this case and the law applicable thereto we agree with the contention. The cashier’s check- of $1,000 in question was that of a third party; it was made payable directly to the city collector; and it appears to have been accepted by the city collector in lieu of cash. The ordinance of the City of Chicago provides that the license fee of $500 for the period of six months beginning on May 1st shall be paid in advance and it is shown by the testimony of a deputy city collector that the payment of such fee before May 1st is absolutely required. The check was accepted on April 29th, but it was not deposited for collection by the defendant until May 21st, and not presented for payment prior to the failure of the Ogden Park Bank on May 23rd. And the evidence shows that had it been presented at that bank at any time up to and including May 22nd it would have been paid. We understand it to be the law that the acceptance of a check of a third party implies an undertaking of due diligence in presenting the cheek for payment and that in case of loss through want of due diligence such acceptance will be held to operate as payment. In Brown v. Schintz, 202 Ill. 509, 514, the court says, quoting from Story on Promissory Notes: “If a creditor accepts the note of a third person, or draft or bill, though not in payment, he accepts the duty of doing everything necessary to fix the liability of the parties to the paper.” And the court further says (p. 515), quoting from Daniel'on Negotiable Instruments: “The receipt of a check, therefore, before presentment, if there is no laches on the part of the holder, is not payment of the debt for which it is delivered. But if the party receiving it is guilty of laches in presenting it, and the bank in the meantime suspends payment, he thereby makes it his own and it shall operate as payment of his debt, the drawer having funds in the bank at the time of drawing the check and not having withdrawn them.” In the present case, the bank and all parties interested being located or residing in the City of Chicago, due diligence on the part of defendant required it, as payee of the check in question, to present the same for payment on the same day, or at the furthest the next day, within banking hours, after the check was delivered to it. (Brown v. Schintz, supra; Bickford v. First Nat. Bank of Chicago, 42 Ill. 238, 244.) In Kilpatrick v. Home Building & Loan Ass’n, 119 Pa. St. 30, 36, it is said: “In the absence of an agreement to the contrary, a check or promissory note, of either the debtor or a third person, received for a debt, is merely conditional payment, that is, satisfaction of the debt, if and when paid; but the acceptance of such check or note implies an undertaking of due diligence in presenting it for payment, etc., and if the party from whom it is received sustains loss-by want of such diligence, it will be held to operate as actual payment.” (See also, Manitoba Mortgage Co. v. Weiss, 18 S. D. 459; Smith v. Miller, 43 N. Y. 171, 176.) We know of no reason why in this case the above well-settled rules of law are not applicable to the defendant, City of Chicago. While the testimony of the deputy city collector, McCarthy, tended to show that it was the custom or practice of his office not to issue a saloon license, and to hold the money or check accepted in payment of the license fee, until receiving the report of the police department as to the validity of the signatures on the voters’ petition where such signatures were required, still the evidence does not show that plaintiff, or his agent Hinkamp, had knowledge of that custom or practice, or that either knew when the check was delivered that it would he held and not deposited until the receipt of a favorable report of the police department as to said signatures by the city collector, or that either consented to such action. The custom or practice, in order to be binding on plaintiff, must have been actually known to him when the check was delivered. (Bank of Commerce v. Miller, 105 Ill. App. 224.) And even if Hinkamp, who simply acted as a messenger for plaintiff to deliver the check to the city collector’s office, had knowledge that there was such a custom or practice (as counsel for defendant contend his testimony tends to show he did), we do not think that such knowledge on Hinkamp’s part would, under all the testimony, be notice to plaintiff and binding upon him. (31 Cyc. 1648; Burton v. Perry, 146 Ill. 71, 118; Snyder v. Partridge, 138 Ill. 173, 184.) And we do not think there is any merit in the contention of counsel for defendant that the delivery of the check was in the nature of an escrow agreement. By the terms of the city ordinance, as well as by the usage or practice in the city collector’s office, payment of the license fees was required before May 1st, and the check was accepted as a compliance with that requirement. Furthermore, one of the essential requirements to a deposit in escrow is that the delivery can be made only to a stranger and not to a party or his authorized agent. (16 Cyc. 571; Worrall v. Munn, 5 N. Y. 229; Baum v. Parkhurst, 26 Ill. App. 128; Ryan v. Cooke, 68 Ill. App. 592.) The judgment of the Superior Court is reversed and judgment is entered here in favor of the plaintiff, Kraetsch, and against the defendant, City of Chicago, for the sum of $1,000. Judgment reversed and judgment here. Finding of Facts: We find as facts that on April 29, 1914, plaintiff by an agent delivered to defendant, and defendant accepted, the $1,000 check in question in payment of license fees for two saloons; that neither plaintiff nor his agent consented that defendant might delay the due presentment of said check for any reason ; that plaintiff had no knowledge of any custom or practice of defendant to hold such checks until the receipt of any report from its police department; that defendant held said $1,000 check, and made no attempt to have the same presented for payment, until May 21,1914; that because of such delay in presentment the money on said check was not received by defendant; and that on June 12, 1914, plaintiff again paid defendant, under protest and because of threats of arrest, the sum of $1,000 for said license fees for said two saloons.