First Nat. Bank v. Behon

• Decision Date: 26 May 1891
• Citation: 16 S.W. 368,91 Ky. 560
• Parties: FIRST NAT. BANK OF CHATTANOOGA v. BEHON et al.
• Court: Kentucky Court of Appeals

16 S.W. 368

91 Ky. 560

FIRST NAT. BANK OF CHATTANOOGA v. BEHON et al.

Court of Appeals of Kentucky.

May 26, 1891

Appeal from circuit court, Kenton county.

"To be officially reported."

W. K Benton, for appellant.

Wm Goebel, for appellees.

BENNETT J.

The appellees drew their draft on Kenner, payable five days after sight, at Rogerville, Tenn., and placed it in the hands of the bank in Covington for collection; that bank sent the draft to a bank in Louisville; that bank sent it to the appellant; the appellant sent it to the Knoxville bank; and that bank, on the 2d of September, advised the appellant that the amount of the draft was credited to it subject to payment; the Knoxville bank then forwarded the draft to the bank at Rogerville; that bank duly presented it to Kenner for acceptance, which was refused. The bank at Rogerville did not immediately give notice that acceptance had been refused, but kept the draft five days,--the time fixed in the draft for its payment,--and three days more, thinking, doubtless, that Kenner was entitled to the five days and three days' grace, notwithstanding he had refused to accept the draft after which it gave notice that payment had been refused. The appellant, on the 7th of September, not having heard from the draft, and concluding from that fact it had been paid notified the bank in Louisville that it had been paid; and that bank gave a like notice to the Covington bank, and it paid the amount to the appellees, and they immediately sent a receipt to Kenner. Of course, as between these banks, the appellant should stand the loss, if any, and it did; but it instituted this action against the appellees to recover back said sum as having been paid to them by mistake of fact. The appellees resisted payment, mainly on the grounds of the negligence of the appellant, which amounted to a voluntary payment, and the subsequent insolvency of Kenner, and the fact that they had sent him a receipt against the debt. It is well settled that money paid under a material mistake of fact may be recovered back, although there was negligence on the part of the person making the payment. Mayer v. Mayor etc., 63 N.Y. 457. If a negligent failure to ascertain the true state of case before payment constituted a bar to the right to recover back the payment, "it would be but rare that money paid by mistake could ever be recovered back." The rule rests upon the principle that one...