Exchange Bank v. Sutton Bank

Page, J., delivered the opinion of the Court. This is an action of assumpsit upon a case stated for the opinion of the Court, with a request to render a judgment in accordance therewith. The appeal is taken from the pro forma judgment of the learned Judge who sat in the case. The defendant below, being indebted to the plaintiff for certain collections made by the former, on account of the latter, on the 9 th day of January, 1892, mailed to the plaintiff the following instrument of writing, viz., “The Sutton Bank. ■ “Sutton, W. Va., Jan. 9, 1892. “Pay to the order of J. J. Jones, Esq., Cashr., $936.50.

Nine hundred and thirty-six and jjjj dollars. T. M. Berry, Cashier. To J. J. Nicholson & Sons, No. 1916. Baltimore, Md.” The plaintiff received it on the thirteenth following, and on the same day forwarded it by mail to the Nicholsons, (with whom both parties kept accounts,) endorsed as follows: “For collection and credit account of Exchange Bank, January 13th, 1892, of Wheeling, West Ya., John J. Jones, Cashr.” On the morning of the ⁵⁸⁵ 14-th, the paper was received by the Nicholsons, and was stuck upon a file where were generally placed the various checks drawn upon the house in the ordinary course of business.

The defendant then had on deposit to its credit with the banking house a sum in excess of S>956!o!{. Later in the day it was taken from the file and entered to the debit of the defendant’s account, but was not then entered as a credit to the account of the plaintiff. On the morning of the 14th, Nicholson & Sons were hopelessly insolvent, and about one o’clock of that day made an assignment to trustees, who, after they had taken possession, entered the check to the credit of the plaintiff; but at the time of the receipt of the check, the Nicholsons did not have in their banking house the amount of the plaintiff’s claim in actual cash, nor at any time thereafter. The paper is now lost, and it is not known whether it was protested or not; but if it was, no notice thereof, or of the non-payment was sent to or received by either the plaintiff or defendant.

A demand was made by the plaintiff on the defendant for payment on the 7th of June, 1893, and, until that day the defendant had no knowledge that it had not been paid. This was the only demand ever made on the defendant by any one. It is not contended that the treatment of the paper by the Nicholsons or theii trustees was tantamount to a payment. There was no credit given to the payees for the amount; and, under the circumstances of the ■case, until this wras done there was no evidence that it liad been accepted.

Whether it be regarded as a bill of exchange or a check, it did not operate as an assignment pro tanto of the drawer’s funds in the hands of the Nicholsons until it was accepted. Moses vs. Franklin Bank of Baltimore, 34 Md., 580 . So far as the plaintiff was concerned, there was no evidence that the Nicholsons had accepted the order ⁵⁸⁶ upon them, and thereby agreed to become responsible to it for the amount. And apart from this, at the time the paper was drawn, and when received by the Nicholsons, they were hopelessly insolvent; and under such circumstances a transfer of credit from the defendant to the plaintiff would have been a mere delusion.

After the assignment they ceased to be a going concern, and neither the firm nor their trustees had the right to make a transfer of credit which was wholly worthless. Manufacturers’ Bank vs. Continental Bank, 148 Mass., 553 . A check or bill is not a payment until paid, Morse on Banks and Banking, secs. 544, 546; Lewis Bros. & Co. vs. Brehme, 33 Md., 412 ; Insurance Co. vs. Smith, 6 Harr. & J., 166, or unless it is accepted as cash, or the creditor parts with it, or is guilty of some laches by which injury inures to -the drawer. Glenn vs. Smith, 2 Gill & J., 509.

In this case, therefore, unless it can be shown that the plaintiff has been guilty of some negligence whereby the defendant has been either actually or constructively injured, the paper having been lost, it was not improper to resort to the original cause of action. Myers vs. Smith and Barrick, 27 Md., 50 . What was the character of the paper offered in evidence? The appellee contends it is a bill of exchange.

This Court has stated in Moses vs. Franklin Bank of Baltimore, 34 Md., 579 , that “a check is denominated a species of inland bill of exchange, not with all the incidents of an ordinary bill of exchange it is true, but still it belongs to that class and character of commercial paper.” And in Bull vs. First National Bank of Kasson, 123 U. S., 105 , in which an instrument of writing exactly similar to the one in this case was declared by the Court to be a check, Judge Field, speaking for the whole Court, says: “When an instrument is drawn upon a bank, or a person engaged in the banking business, and simply directs the payment to a party of a specified sum of money which is at ⁵⁸⁷ the