Carroll v. Sweet

• Decision Date: 02 June 1891
• Citation: 27 N.E. 763,128 N.Y. 19
• Parties: CARROLL v. SWEET.
• Court: New York Court of Appeals Court of Appeals

128 N.Y. 19

27 N.E. 763

CARROLL

v.SWEET.

Court of Appeals of New York.

June 2, 1891.

Appeal from supreme court of New York city, general term.

H. E. Losey, for appellant.

Chas. E. Hughes, for respondent.

ANDREWS, J.

The indorsement and transfer by the defendant to the plaintiff of the check of Woodruff operated as provisional payment only of so much of the antecedent debt owing by the defendant to the plaintiff. There was no agreement that it should be taken in absolute satisfaction on the debt, and, in the absence of such an agreement, the intendment of law is that it was conditional payment only. Hill v. Beebe, 13 N. Y. 566;Bradford v. Fox, 38 N. Y. 289. The debt remained until discharged by payment of the check, or by such dealing with the check by the plaintiff as would, in judgment of law, convert what was originally a provisional payment into an absolute one. The check was dated August 22, 1887, and was drawn on the Asbury Park National Bank, and was on the same day indorsed and delivered by the defendant to the plaintiff at the place where the bank was located. The plaintiff, on accepting the check, assumed, as between himself and the defendant, an obligation to present the same to the bank for payment within the time prescribed by the law-merchant,-that is to say, not later than the next day after its date,-and, if refused, to protest the same, and give notice of non-payment. Smith v. Janes, 20 Wend. 192. It was not presented until the 31st of August, nine days after it was received by the plaintiff. The defendant was by such delay discharged from liability as indorser of the check, irrespective of any question of loss or injury. Presentment in due time, as fixed by the law-merchant, was a condition upon performance of which the liability of the defendant as indorser depended, and this delay was not excused although the drawer of the check had no funds, or was insolvent, or because presentment would have been unavailing as a means of procuring payment. Bank v. Broderick, 10 Wend. 304;Gough v. Staats, 13 Wend. 549. A different rule obtains as between the holder and drawer of a check. As between them presentment may be made at any time, and delay in presentment does not discharge the liability of the drawer, unless loss to him has resulted. Little v. Bank, 2 Hill, 425. The action here is not upon the indorsement of the defendant, but upon the original indebtedness. If the discharge of the defendant's liability as indorser discharges also his liability as debtor for the original debt, the judgment must on that ground be reversed. In Hamilton v. Cunningham, 2 Brock. 350, Chief Justice MARSHALL considered the effect of the neglect of the holder of a bill to give due notice of dishonor, whereby prior parties thereto were discharged, upon the liability of a debtor for the debt for which the bill was drawn. After showing that the authorities in which the debtor had been held discharged, proceeded upon the theory that he had sustained an actual loss, he reached the conclusion that the true principle is ‘that, if a bill be received as provisional payment, the omission to give due notice of its dishonor deprives the creditor of his action on that bill, but does not compel him to take it in absolute payment, or deprive him of his action on the original debt, further than damage has been sustained actually or in legal supposition by the debtor.’ See, also, Gallagher's Ex'rs v. Roberts, 2 Wash. C. C. 191;Fleig v. Sleet, 43 Ohio St. 53, 1 N. E. Rep. 24. I am not sure that this doctrine is reconcilable with expressions in the opinion of this court in Smith v. Miller, 43 N. Y. 171, 52 N. Y. 545. That was an action to recover a debt for which the defendant had drawn his draft on J. K. Place & Co., and forwarded it to the plaintiff, the creditor. It was presented on the same day it was received to the drawees, and the plaintiffs received therefor the drawees' check on a bank, and surrendered the draft. The check was not presented to the bank until the next day, when payment was refused, the drawer meanwhile having failed. The check would have been paid if it had been presented on the day it was given, which might have been done. The plaintiffs did not demand a return of the draft, and it was not protested, nor was any notice of non-payment given to the drawees. The court rendered judgment for the defendant on two grounds- First, that, in the absence of proof of demand and refusal and notice to the drawees, according to the usual course, there could be no recovery upon the draft or upon the indebtedness upon which it was given, and, second, on the ground of negligence in failing to present the check on the day on which it was given. The last ground stated was, upon the facts, a satisfactory basis for the judgment, and the same principle was applied upon similar facts in First Nat. Bank v. Fourth Nat. Bank, 77 N. Y. 320. In the view we take of the present case, it is unnecessary to inquire whether the cases cited from this...