Montana Livestock & Loan Co. v. Stewart , 58 Mont. 221 ( 1920 )

MB. JUSTICE MATTHEWS

delivered the opinion of the court.

This action was brought to recover damages for the alleged breach of a contract of sale of certain sheep, and resulted in a judgment for the plaintiff. The defendant appeals from the judgment and from the order of the court denying his motion for a new trial.

The controversy between the plaintiff and defendant arose over a check given defendant by one McCain, as agent of the plaintiff, at the time of making the contract, as part payment on the sheep. The check was drawn on the Bank of Montana, of Billings. It was taken by defendant to the Custer State Bank, where the cashier refused to cash the check, as he stated, “without knowing something about it.” According to the testimony of defendant, he then had the cashier call up the cashier of the Billings bank and inquire whether the bank would guarantee the payment of the check. On being informed that the bank would not do so, defendant returned the check, and notified the plaintiff that he would not deliver the sheep.

The brief of defendant contains thirty-four specifications of error, grouped in argument under eight heads.

I. Specifications 1, 2, 8, 9, 10, 11 and 12 go to the admission of evidence concerning the sale of the sheep mentioned in l;he contract, to outside parties immediately after the contract [1, 2] was entered into, at $6 per head, or an advance of thirty-five cents per head over the contract price.

The measure of damages in this case was, of course, the difference between the contract price and the reasonable market value of the sheep at the time and place of delivery, and it is possible that, standing alone, the admission of such evidence would constitute reversible error.' However, each of the witnesses, in addition to testifying to the contract price on resale, testified that the reasonable market value of the sheep at Custer was $6 per head, and this evidence of the market value was corroborated by other evidence.'' The effect of the testimony complained of was therefore that they agreed to pay the reasonable market price for the animals for which they bargained. (Lehrkind v. McDonnell, 51 Mont. 343, 153 Pac. 1012.) The court thereafter correctly instructed the jury as to th'e measure of damages, and, as this court said in the case of Shandy v. McDonald, 38 Mont. 393, 100 Pac. 203: “This instruction excluded from' the consideration of the jury all other evidence as to the value of these animals. Therefore it is unnecessary to express an opinion as to the propriety of the ruling.”

While the admission of such -testimony constituted error, it could not have affected the substantial rights of the defendant, and will therefore be disregarded. (See. 7118, Rev. Codes; Church v. Zywert, ante, p. 102, 190 Pac. 291.)

II. Specifications 3, 4, 13, 14, 15, 16, 21 and 24 are [3] predicated upon the exclusion, on cross-examination of McCain, of purported statements concerning the check, made before and after its return. Such testimony was clearly either incompetent or immaterial or an attempt to vary the terms of a written instrument, and the court’s action in excluding it was proper. Whatever the agreement of the parties as to * a cash payment down, the check, when accepted, superseded such negotiations, and was “payment until dishonored.” (Morse on Banks & Banking, see. 545.) The case of Pasha v. Bohart, 45 Mont. 76, Ann. Cas. 1913C, 1250, 122 Pac. 284, is not in point.

III. In specifications 5, 6, 7, 19 and 20, defendant complains of the admission of what counsel denominates [4] “immaterial evidence” as to what directions were' given by plaintiff to its bank concerning the payment of the check. Counsel, thus admitting the immateriality of the evidence, fails to specify in what particular its admission is prejudicial to the rights of the defendant, and a careful reading of the evidence fails to disclose wherein such testimony could have prejudiced the defendant’s rights. “An appellate court will not reverse a judgment merely because the lower court.erred; it is only when the error has materially affected the appellant’s rights on the merits of the case.” (Lane v. Bailey, 29 Mont. 548, 75 Pac. 191; State ex rel. Kohl v. District Court, 46 Mont. 348, 128 Pac. 582; Way v. Sherman, 30 Mont. 410, 76 Pac. 942.)

IY. It is contended that the action. of the Billings bank [5] amounted to the dishonor of the check, and justified the defendant in his refusal to deliver the sheep under the contract. Defendant proceeds on the theory that the Billings bank had refused to honor the cheek, and relies on Jenderson v. Hansen, 50 Mont. 216, 146 Pac. 473, where it was held that inquiry of the bank as to whether the buyer had funds therein sufficient to meet it could be made in person or by telephone, or through another, and that evidence of a negative answer over the telephone was admissible. However, the facts before us do not bring this case within the rule laid down. According to the testimony of defendant himself, the inquiry was as to whether the bank would “guarantee” the payment of the check. This is entirely different from an inquiry as to whether the maker of the cheek had funds in the bank to meet payment on presentment, or whether it would be paid when presented. In the latter case a negative answer would excuse presentment, as it would be useless, and “the law neither does nor requires idle acts.” (Sec. 6200, Rev. Codes.) But, while the bank might be required to advise the payee, over the telephone or otherwise, as to whether a check will be paid on presentment, provided the signature is genuine and the check in due form, it could not be required, under any circumstances short of having certified the check, to guarantee the payment of it.

As heretofore stated, a check is payment until dishonored; it can only be dishonored by presentment at the bank on which it is drawn, in regular form, and refusal of payment. Section 6033, Revised Codes, provides that.“a check is a bill of exchange drawn on a bank payable on demand.” Section 6035 declares that “where a check is certified by the bank on which it is drawn, the certification is equivalent to an acceptance”; and, under section 6037, “a cheek of itself does not operate as an assignment of any part of the funds to the credit of the drawer with- the bank, and the bank is not liable to the holder, unless and until it accepts or certifies the check.”

Sharp, the cashier of the Custer State Bank, called on behalf of the defendant, testified that, in response to his inquiry: “Mr. Langworthy replied those checks drawn by McCain required the O. K. of somebody in the office before he was authorized to pay it, but he added the check would undoubtedly be paid when presented.” Langworthy, called in rebuttal, testified that he stated that “Without any question the cheek would be paid when it was presented properly; that if he would give me about five minutes or so, I would call Mr. O.’Donnell on the phone, or see him with reference to this check, and advise him again.” Within thirty minutes O’Donnell advised defendant that the check was perfectly good, and would-be paid on presentment, but in the meantime defendant had deposited the cheek in the postoffice, addressed to the maker.

The statement of Langworthy was not that the check was not perfectly good, taken in the most favorable light to the defendant; it was coupled with the expression of his opinion that it would be paid when presented. It was the duty of the defendant to present the check for payment, either to the bank directly or through another, as by deposit with the Custer State Bank, and collection by it. Having made an informal request of the Billings bank, he should at least have waited a reasonable time for an answer. On receipt of advice that the check would be paid, he could have easily secured the return of the check at the postoffice. Having failed to present the check for payment, defendant was in no position to declare a rescission of the contract for nonpayment.

Y. Defendant contends that the court erred in instructing the jury as follows: “The defendant having accepted the [6] check in question in part payment of the purchase price of. sheep, as evidenced by written memorandum of contract, he could not avoid or rescind the contract for nonpayment of cheek without having presented the check to the Bank of Montana for payment and having payment refused. Having failed to do so, plaintiff is entitled to recover herein for such damages, if any, as it may have suffered.” The instruction correctly states the law, and is not open to the complaint that it advised the jury that the cheek must be presented in person to the bank.

No error was committed in the refusal of instructions not in harmony with the above-quoted instruction.

We find no substantial error in the record, and the judgment and order-of the district court are therefore affirmed.

Affirmed.

Mr. Chief. Justice Brantly and Associate Justices Holloway, Hurly and Cooper concur.