Harvey v. Girard National Bank ( 1888 )

Opinion,

Mr. Justice Paxson :

It was conceded that the defendant bank rendered itself liable to the holder of the draft in question by its delay in presenting it to the Shackamaxon Bank where it was made payable. It was received by the defendant on May 27, 1885. During that and the next day the Shackamaxon Bank paid all demands made upon it. Upon the 29th of May it suspended and closed its doors. The plaintiff had sufficient funds on deposit at the Shackamaxon Bank on May 27th and May 28th to have met the draft, and had left instructions with that bank to honor it when presented. Had it been presented and payment demanded on the 28th it would have been paid. Instead of sending it by messenger on that day the defendant bank sent it by mail. It was received by the Shackamaxon Bank on the same day and was acknowledged as of the same date announcing its suspension. Both hanks were located at the city of Philadelphia, distant about three miles from each other. The time required for a messenger between them did not exceed thirty minutes. It needs no argument to show that this presentation was not sufficient and rendered the defendant bank liable to the holder for neglect of duty. As was before observed, so much was conceded. This liability flows not only from 'the neglect of duty by said bank, but by virtue of the contractual relation between it and the holder. It was the agent of the latter for collection. This suit, however, was brought by the drawee, who claims to recover, not by reason of any contractual relation between himself and the collecting bank, for none exists, but by reason of the breach of duty on the part of the latter in not making proper presentation and demand for payment of the draft; it being alleged that the duty of a bank in this respect was of a public character, for the neglect of which any person injured thereby may have his remedy.

The particular injury in this case was the loss of the money deposited by the plaintiff in the Shackamaxon Bank to meet the draft, and which would have been so applied had proper presentation and demand been made. As a general rule the drawee of a draft cannot be said to be injured by a neglect to present it. The person damnified is the holder. But it is alleged there are circumstances in this case which take it out of the general rule.

We are in no doubt as to the facts. They are distinctly and clearly found by the learned judge below, who tried the case without the intervention of a jury. Thomas R. Alcorn, the drawer, was the agent of the plaintiff for the purchase of live stock. He bought a quantity of sheep at Buffalo, New York, and in payment therefor drew this draft on Thomas Harvey, his principal, and the plaintiff in this case. Alcorn had been purchasing agent of the plaintiff for years, and by authority of the latter had drawn upon him from time to time in payment of his purchases. This draft was drawn in the same manner and by the same authority. It may therefore be said to be substantially a draft drawn by the plaintiff upon himself. This was the position of the matter on June 1st, when the draft was returned by tbe Shackamaxon Bank to the Girard Bank, defendant. On June 2d, the defendant bank sent the following letter to the plaintiff:

Philadelphia, June 2,1885.

Thomas Harvey, Esq.:

Dear Sir: — Thomas R. Alcorn’s draft upon you for $799.22 was received through the Bank of North America of New York, on May 27th. Payment was refused. The Shackamaxon Bank returned to us, and received by us June 1st, on account of failure of the bank.

Whiteman, Cashier.

On the same day, June 2d, the plaintiff paid to the defendant bank, under protest, the amount due on the said draft, and took up and received the same. The plaintiff knew when he paid the draft that it had been received by the Girard Bank on the 27th of May, and that the Shackamaxon Bank did not close its doors until the 29th.

In any view we may take of the case, therefore, the plaintiff knew, or was chargeable with knowledge, on June 2d, that he was not liable on the draft, even had he accepted it in writing. If, under the peculiar circumstances of the case, we were to treat the draft as a check drawn by the plaintiff upon the Shackamaxon Bank, the failure of the latter after the time when by due course of commercial usage it ought to have been presented, relieved the plaintiff from all liability thereon. On the other hand, treating it as a draft, it is equally clear that no recovery could be had against him thereon. It was alleged, however, that if not liable upon the draft the plaintiff remained liable for the sheep which his agent had bought, and for the payment of which the draft was given; and that the payment was not voluntary, inasmuch as he paid under protest and for the purpose of protecting his credit.

We are unable to see the force of this proposition. In the first place the liability of the plaintiff to the holder of the draft for the price of the sheep is more than doubtful. The latter having received the draft, could not sue the plaintiff upon the original consideration until after acceptance or payment had been refused by the drawee. Neither occurred. -It was his duty to collect the draft: he attempted to do so; the plaintiff provided the money to meet it, and that money was lost through the negligence of the holder. I say the negligence of the holder, because the collecting bank was his agent, and its negligence was his negligence so far as the plaintiff is concerned. The holder had his remedy against his collecting agent for the negligence of the latter, but, as between the holder and the plaintiff, the latter was discharged both as to the draft and the consideration therefor, by the negligence of the former, resulting as it did to the prejudice and loss of the plaintiff. This is a familiar principle of commercial law: Chitty on Bills, 354. Even if we are mistaken in this, we do not see that it affects the case. The plaintiff paid his money upon the draft, qua draft, and not upon the debt or consideration which it represented, and he claims now to recover solely for a breach of duty by the defendant in relation to the draft. He paid as a volunteer, unless there be that in the fact of paying under protest and to protect his credit which will relieve him from that position. The plaintiff might well have stood upon his legal rights. He was not liable upon the draft, as before stated, and we incline to the opinion that he was not liable upon the consideration for which it was given. Was the payment under protest and to preserve his credit sufficient to convert a payment otherwise voluntary into an involuntary one ? The protest was of no importance in a legal sense.

A voluntary payment of money under a claim of right cannot in general be recovered back. There must be compulsion, actual, present and potential, in inducing the payment by force of process available for instant seizure of person or property, when the party so paying must give notice of the illegality of the demand, and of his involuntary payment. The element of coercion being essential, a mere protest or notice will not change the character of the payment, or confer of itself a right of recovery: Peebles v. Pittsburg, 101 Pa. 304. However desirable to the plaintiff may have been the preservation of his credit, a voluntary payment for that purpose could not give him a standing as a party injured to sue for the negligence of the defendant bank. Nor is it by any means clear that he might not have preserved his credit in some other way. Had he allowed the draft to go back protested, with an explanatory letter, he would doubtless have preserved his credit, as well as the remedy of the holder of the draft against the defendant bank for its negligence. As it stands, the holder has no remedy, because he has been paid! The plaintiff has no remedy, because he is a volunteer.

This view renders a discussion of the authorities cited unnecessary. They are not applicable. For the same reason we may disregard the claim to subrogation. The plaintiff is not in a position to demand it.

Judgment affirmed.