First Nat. Bank of Union Mills v. Clark

• Citation: 32 N.E. 38,134 N.Y. 368
• Parties: FIRST NAT. BANK OF UNION MILLS v. CLARK.
• Decision Date: 01 October 1892
• Court: New York Court of Appeals

134 N.Y. 368

32 N.E. 38

FIRST NAT. BANK OF UNION MILLS

v.CLARK.

Court of Appeals of New York,

Second Division.

Oct. 1, 1892.

Appeal from supreme court, general term, fifth department.

Action by the First National Bank of Union Mills against Judson H. Clark on a check drawn on defendant, a banker, in plaintiff's favor, by Sliney & Whelan. From a judgment of the general term (9 N. Y. Supp. 952) entered on an order affirming a judgment in defendant's favor entered on the verdict of a jury, plaintiff appeals. Affirmed.

Hudson Ansley, for appellant.

Rufus Scott, for respondent.

PARKER, J.

John Sliney, of the firm of Sliney & Whelan, on December 5, 1882, gave to the plaintiff a deposit slip, of which the following is a copy: ‘Deposited by Sliney & Whelan with Judson H. Clark, banker, Scio, N. Y., December 5, 1882. Discount. $3,412.50. F. M. BABCOCK.’ Babcock was in the employ of Judson H. Clark, and acted as his cashier. At the same time Sliney made and indorsed in the firm name, and delivered to the plaintiff, a check, which reads as follows: ‘Scio, N. Y., December 5, 1882. Judson H. Clark, banker: Ten days after date pay to the order of Sliney & Whelan three thousand four hundred and twelve and fifty one-hundredths dollars. $3,412.50. SLINEY & WHELAN.’ The plaintiff thereupon paid to Sliney the amount called for by the check, less 13 days' interest thereon and exchange. December 7th the plaintiff put the deposit slip and check together, and sent them by mail to the defendant, who on or immediately after December 15th, the day on which the check was made payable, returned the same to the plaintiff, with a letter advising that there were no funds to meet the check. Subsequently plaintiff demanded payment of the defendant, which was refused, and this action was thereupon begun.

The defendant's denial of liability was placed on two grounds: (1) That Sliney & Whelan did not have on deposit with him on December 5th, or at any time following, any sum of money whatever; (2) that Sliney & Whelan's pretended claim against the defendant was not assigned to the plaintiff. On the trial testimony on the part of the plaintiff was presented, tending to show that on December 5th the defendant discounted a note for $3,500, made by Knox Bros., and indorsed by Sliney & Whelan, but with the understanding that the deposit should not be drawn against for 10 days, and the deposit slip given to Sliney represented the amount of the note, less the discount agreed upon. Defendant testified that he told Sliney that he was not in a situation to discount the note then, and Babcock, his cashier, testified that Sliney informed him that defendant, Clark, said he should leave the note there, as he might be able to discount it in the future, and to figure ‘the discount, and put it on a deposit slip,’ which was done. But we need not discuss the evidence in that regard, as the court was not asked to direct a verdict in favor of the defendant, and the jury were instructed to determine whether the fact was as claimed by the plaintiff or as asserted by the defendant. To such submission no exception was taken, and necessarily it cannot now be urged that the jury should not have passed on the question. The court instructed the jury that if they should find that the defendant did not discount, or agree to discount, the note for Sliney & Whelan, then their verdict should be for the defendant; but should they find for the plaintiff on that proposition, then they should go further, and consider whether that which took place between the plaintiff and Sliney amounted to an assignment of Sliney & Whelan's claim against the defendant, for, if it did not, the plaintiff could not recover. The plaintiff excepted to the charge in such respect, and also to the refusal of the court to charge the following request: ‘That there was no dispute as to what took place between Sliney & Whelan and the plaintiff at plaintiff's bank at the time of the delivery of the papers, and that what took place there amounted to an assignment to the plaintiff.’ As the verdict may have been put on the ground that there was no assignment to the plaintiff, we are required to consider whether the exceptions to which reference has been made were well taken. We are thus conducted to an inquiry embracing all the details of the transaction which resulted in plaintiff's paying over to Sliney & Whelan the face of the check, less interest and exchange.

We will first consider whether the giving of the check by Sliney & Whelan to the plaintiff for the full amount of the deposit operated as an assignment of the debt. Assuming that Sliney & Whelan were depositors with the defendant, the money after deposit made belonged to the defendant. Sliney & Whelan's right was a chose in action. The implied engagement on the part of a banker to pay the checks of his depositor does not inure to the benefit of the holder of a check, so as to enable him to enforce payment thereon against the bank prior to its acceptance. In the absence of assent by the depositary, the giving of a check by a depositor does not operate as a transfer or assignment of the debt created by making a deposit. Harris v. Clark, 3 N. Y. 93;Chapman v. White, 6 N. Y. 412;AEtna Nat. Bank v. Fourth Nat. Bank, 46 N. Y. 87;Duncan v. Berlin, 60 N. Y. 151; Risley v. Bank, 83 N. Y. 318. Here there was not an acceptance by the banker. On the contrary, he refused to accept it; and it follows that the check did not operate to transfer the...