Cronheim v. Postal Telegraph Cable Co.

Decision Date06 March 1912
Docket Number3,808.
Citation74 S.E. 78,10 Ga.App. 716
CourtGeorgia Court of Appeals

Syllabus by the Court.

Where a check is indorsed to a bank "for collection and credit for deposit" to the account of the payee, the bank is the agent of the payee to collect, and title to the check does not pass to the bank, in the absence of an agreement to that effect, evidenced otherwise than by the language of the indorsement.

Such an agency may be revoked by the payee at any time before collection, and may be terminated by instructing the bank upon which the check is drawn to withhold payment.

Following the decision in Schofield Mfg. Co. v. Cochran, 119 Ga. 901, 47 S.E. 208, where the owner of a check delivers it to a bank for collection, and before the proceeds are remitted the bank fails and is placed in the hands of a receiver, the owner is not entitled to priority over the general creditors of the bank.

The probability that the drawer of a check given in settlement of a debt will request the drawee to withhold payment, when instructed so to do by the payee, and that the drawee will comply with such request, is so legally certain as to support an action for damages against a telegraph company for failing to deliver a message from the payee to the drawer, containing such an instruction.

The petition set forth a cause of action, and should not have been dismissed on demurrer.

(Additional Syllabus by Editorial Staff.)

Plaintiff received a check from the general secretary of the supreme lodge, and deposited it for collection in a bank. On the failure of the bank, the payee of the check deposited with the defendant company for transmission a telegram to the drawer requesting him to stop payment of the check. Defendant failed to transmit the telegram, and the payee sued for the resulting loss of the amount of the check. Held that the drawer was under legal obligation to comply with the request contained in the telegram, and the fact that it was addressed to him as an individual, and not in his official capacity, does not affect the liability of the defendant.

Where the general superintendent of the insurance department of a fraternal order received a check and deposited it with a bank for collection and on the failure of the bank deposited with defendant telegraph company a telegram to the drawer to stop payment, and plaintiff was individually responsible to the fraternal order for the safe-keeping and proper distribution of the check, plaintiff, and not the fraternal order alone was entitled to maintain an action against defendant for failure to transmit the telegram, resulting in the loss of the amount of the check.

Error from City Court of Atlanta; H. M. Reid, Judge.

Action by H. Cronheim against the Postal Telegraph Cable Company. Judgment for plaintiff, and defendant brings error. Reversed.

H Cronheim brought suit against the telegraph company, making in his petition substantially the following allegations:

Plaintiff was general superintendent of the insurance department of the Supreme Lodge of the Knights of Pythias for the State of Georgia, and had an office in the city of Atlanta, which was under the control of and maintained by the Supreme Lodge of the Knights of Pythias. On December 20, 1907, he received from Carlos S. Hardy, general secretary of the Supreme Lodge of the Knights of Pythias, in the city of Chicago, Ill., a certain voucher check in the following words and figures, to wit: "Supreme Lodge Knights of Pythias, Insurance Department. Voucher Check No. H. 1533. Chicago, Ill., 12/18, 1907. To H. Cronheim, Address, Atlanta, Ga.: $1,220. This voucher check is payable in current funds at the First National Bank of Chicago, when receipted in accordance with directions below. Advanced on a/c ...Ne ...$1,220.00. Approved for payment: Carlos S. Hardy, General Secretary. Countersigned: Sam'l O. Smart, Auditor. Audit No. 1070. Received at Atlanta, Ga., (Date) Dec. 20, 1907, twelve hundred twenty and no/100 dollars ($1,220.00), in full payment of the above account. Account No. 5. Drawn W. O. P. H. Cronheim. [Before signing please write place and date above.] Directions: This receipt must be dated and signed by the party in whose favor the voucher check is drawn and in exact form as given above." Indorsements on back of voucher check No. H. 1533: "Supreme Lodge Knights of Pythias, Insurance Department. $1,220.00. Date 12/18--07." "Payable at the First National Bank, Chicago, Ill. No protest." "The Neal Bank, Atlanta, Ga." "Paid through Chicago Clearing House, 2--3, Dec. 23, '07, to Central Trust Company of Illinois." "Pay to any bank or bankers, or order. All other indorsements guaranteed. Dec. 20--07. The Neal Bank."

On December 20, 1907, the plaintiff deposited the voucher check in the office of the Neal Bank in the city of Atlanta, "for collection." In the usual and ordinary channels the check proceeded from the office of the Neal Bank to the Central Trust Company of Illinois, in Chicago, for presentation to the First National Bank of Chicago for payment. On December 21, 1907, which was Saturday, the Neal Bank failed and closed its doors for business. On December 23d, at 7:55 a. m., the plaintiff filed with the defendant company in Atlanta a telegram of which the following is a copy: "Atlanta, Ga., December 23, '07. To Carlos S. Hardy, 1220 Manhattan Building, Chicago, Ill. Stop payment check twelve hundred twenty-two dollars sent Dec. statement have written. [Signed] H. Cronheim." It is alleged that this telegram referred to the voucher check hereinbefore mentioned, and was designed to cause the addressee to instruct the First National Bank of Chicago to refuse payment of the check when presented, on account of the failure of the Neal Bank. At the time this message was left with the defendant's agent in Atlanta, attention was urged by the plaintiff to its importance, and to the consequences that would be suffered by him in the event of a failure to transmit it promptly, and the agent informed petitioner that it would reach its destination in about 30 minutes. The check in question was presented to the First National Bank at Chicago by the Central Trust Company of Illinois at 12 o'clock, noon, December 23, 1907, and was paid through the clearing house of Chicago, the check having been indorsed by the Neal Bank to the Central Trust Company. The telegram was not delivered to Carlos S. Hardy until 2:05 p. m., December 23, 1907, having been negligently delayed in delivery by the defendant. Carlos S. Hardy, the general secretary aforesaid, was in his office at the address referred to in the telegram during the whole of December 23, 1907, and "would have stopped payment of this said voucher check by the First National Bank of Chicago if he had received said petitioner's message at any time prior to the receipt of same, to wit, December 23, 1907." It was further alleged that there was an error in transmission of the message, both as to the name of Carlos S. Hardy and as to the place for delivery of the message, as well as in the name of the sender, and it is averred that these errors in transmission contributed to the delay in delivery.

Plaintiff was individually responsible to the Supreme Lodge of the Knights of Pythias for the safe-keeping and distribution of all funds placed in his hands by the Supreme Lodge. He was responsible for the collection, safe-keeping, and proper distribution of the check, and no loss ensued to the Supreme Lodge by reason of the placing of the check in the Neal Bank for collection, and the failure of the defendant to promptly deliver the telegram; but the loss, as heretofore set forth, was sustained by the plaintiff individually. The Neal Bank having become insolvent, the check passed into the hands of the receivers of the bank, and, on account of the gross negligence in failing to deliver the message, the proceeds of the check were paid to the order of the Neal Bank, when, by ordinarily prompt and careful transmission and delivery of the message, payment could have been legally prevented; and plaintiff was forced to make the check good to the Supreme Lodge of the Knights of Pythias. Plaintiff has received from the receivers of the Neal Bank three payments on the check, as follows: March 20, 1908, $244; October 20, 1908, $244; November 20, 1909, $183--making a total of $671. He sues for the difference between this sum and the amount of the voucher, plus interest, claiming the right to recover the sum of $862.32. On January 23, 1908, within 60 days from the date of the injury and damage complained of, the plaintiff filed his claim against the defendant for the sum of $1,220, alleging the same to be due him as damages for the negligent transmission and delivery of his message, and caused said claim to be referred to the agency of the defendant in the city of Atlanta, the agency which had received the message for transmission and delivery, and the defendant refused to pay the amount claimed, or any part thereof.

The defendant interposed a demurrer to the petition upon the following grounds: (1) Because no cause of action is set forth; (2) because it does not appear how the plaintiff became legally liable or responsible to the Supreme Lodge of the Knights of Pythias for the proceeds of the voucher; (3) because it appears that the plaintiff had a preferential claim against the receivers of the Neal Bank, and that sufficient funds went into the hands of the receivers of the Neal Bank to pay his claim in full; (4) because it appears from the petition that the right of action is not in the plaintiff. The defendant specially demurred to the averments that the plaintiff was general superintendent of the insurance department of the Supreme Lodge of the Knights of...

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