Kenny v. First National Bank of Albany

By the Court,

Hogeboom, J.

The plaintiff having received from the defendants a spurious note upon a valid claim which he held against the bank, it did not amount to a payment, and the plaintiff was entitled to recover the amount from the bank, unless he was guilty of negligence in returning the note. (Markle v. Hatfield, 2 John. 455. Thomas v. Todd, 6 Hill, 340.)

There may be negligence in two ways, either in making discovery of the worthlessness of the paper, or in making return of it within a reasonable time. The cases are mostly to the point of negligence after discovery of the worthlessness of the paper; (Thomas v. Todd, 6 Hill, 340; Canal Bank v. Bank of Albany, 1 Hill, 291; Simms v. Clark, 11 Ill. R. 140; Pindall’s ex’rs v. N. W. Bank, 7 Leigh, 617; Townsend v. Bank of Racine, 7 Wis. R. 195; 2 Pars, on Bills and Notes, 190, note k;) though some of them speak generally of negligence in returning the paper or demanding its redemption. (Ontario Bank v. Lightbody, 13 Wend. 113. U. S. Bank v. Bank of Georgia, 10 Wheat, 333.

Gloucester Bank v. Salem Bank, 17 Mass. R. 33.) But in the last two cases the spurious notes were those of > the very bank to which they were paid. And it was properly held that they were bound to great diligence in discovering spurious paper of their own alleged issue. (See Pindall’s ex’rs v. North Western Bank, 7 Leigh, 622.) No doubt the aggrieved party must return the note with diligence after discovering the defect, to the party from whom he received it, to enable the latter to seek indemnification from others, to all of whom time may be important as 'well to preserve the* memory of the facts and the liability of the parties, as to trace out the history of the transaction.

But a longer time, and a more liberal rule, prevails in regard to what is diligence in making the discovery, and whether it be a question of fact, or of law, must vary in different cases. A private individual might well rely, to some extent, on the judgment of the officers of the bank from whom he received the paper alleged "to be spurious, as more likely to know and to detect the character of the paper, than himself. An immediate use of the money cannot be .indispensably requisite ; because it is frequently retained even by banks in the ordinary course of business, for a considerable time. And in the present case it is not entirely clear that prompt inspection and examination by the plaintiff, or by parties to whom he would have been likely to pass the note would have led to a discovery of its spurious character.

These circumstances are, I think, proper for the consideration of a jury, under proper instructions from the court, and are consequently more or less questions of fact. (McGrath v. Hudson River Railroad Co., 32 Barb. 147, 148, 154, 155. Ernst v. The Same, Id. 164. Bernhardt v. The Same, Id. 165. 23 How. Pr. 169.) No absolute or unbending rule fixing a specific limitation of time can be applied to every case. And, I think, in the present case, the justice was not bound to decide against the plaintiff as a matter of law, on the question of negligence. We must assume the circumstances properly bearing on this question were duly considered by the jury; and, therefore, we cannot say that, on the facts proved, negligence was imputable to the plaintiff. The defendants did not put themselves upon-the ground of negligence in the plaintiff, when they refused to redeem the note. Perhaps they were not obliged to. Nor did they do so with perfect distinctness, at the trial. They moved, it is true, for a nonsuit, and they stated as one of the grounds that the plaintiff had been guilty of laches ; but how, or in what respect, they did not specify—whether in the original reception of the spurious paper, or in keeping it deposited for future use an unreasonable length of time before bestowing upon it a critical examination, with a view to the ascertainment of its genuine or spurious character; or in putting it out of his own possession and omitting to make any marks upon it, as likely to lead to confusion and uncertainty as to its identification ; or in not presenting it at the bank for redemption within a reasonable time after its receipt by him from the bank.

[Albany General Term, May 6, 1867.

These considerations raise some doubt whether the question is properly here for review; but independent of them, I am of opinion that we are not in a condition to say that as a question of law, negligence was clearly established as against the plaintiff. And if we assume that the question was submitted to the jury as a question of fact, under proper instructions from the court, then the defendants are remediless, because the question of fact has been found against them.

The judgment must be affirmed.

Peckham, Ingalls and hogeboom, Justices.]