Martin v. Home Bank
| Decision Date | 03 October 1899 |
| Citation | 54 N.E. 717,160 N.Y. 190 |
| Parties | MARTIN et al. v. HOME BANK. |
| Court | New York Court of Appeals Court of Appeals |
Appeal from supreme court, appellate division, First department.
Action by Richard M. Martin and others, as executors, etc., against the Home Bank. From a judgment in favor of plaintiffs, affirmed by the appellate division (52 N. Y. Supp. 464), defendant appeals. Affirmed.
Charles F. Brown and William C. Beecher, for appellant.
John W. Boothby, for respondents.
The plaintiffs' testator, William Campbell, brought this action to recover from the defendant the sum of $4,925, which he claimed was paid by him to the defendant by mistake of fact. The original plaintiff died during the pendency of the action, and his executors, the present plaintiffs, were substituted in his place. The courts below have sustained the claim, and awarded judgment against the defendant. The facts upon which the judgment rests were undisputed, and at the close of the case the learned trial judge directed a verdict for the plaintiffs, and there was no request by either party to have any question submitted to the jury.
It appears that on May 27, 1893, one Peats, being indebted to Campbell, drew his check for the sum above mentioned upon a firm of bankers in Chicago to the order of one Ballou, who was the agent of Campbell, and who received the check in payment of the debt. The payee indorsed and delivered this check to his principal, the original plaintiff in this action. The latter received it after banking hours on the 27th. The next day was Sunday, and on Monday the 29th, at about 10 o'clock in the morning, he indorsed and delivered the check to the defendant, and the depositor was credited with the amount in his account. The check was not presented at the bank in Chicago where it was payable until June 3d, five days after it was deposited with the defendant, and payment was then refused. Had the defendant transmitted the check by mail in the regular course of business, it would have reached Chicago and could have been presented for payment at 10 o'clock of the second day after it was deposited; that is, on May 31st. The drawer of the check had at all times sufficient, and more than sufficient, funds in the bank upon which it was drawn, subject to check, to pay it; but on the morning of June 3, 1893, these bankers failed and suspended payment, and when the check was presented that day for payment it was dishonored, and subsequently protested and returned to the defendant. The plaintiffs' testator, who had indorsed and deposited it to his credit, was notified of the dishonor, and, supposing that he was liable upon the paper so indorsed, took it up, paying to the defendant the face of the check, interest, and protest fees. He subsequently brought this action to recover the sum so paid.
The defendant, on receiving the check, assumed the obligation to present it for payment within a reasonable time; and, had this obligation been discharged, the check would have been paid, and no one would have sustained any loss from the transaction. That the defendant neglected or failed to perform this duty is a fact in the case that is not now seriously questioned. The legal effect of the defendant's omission in this respect was to discharge the indorser, and the drawer as well, since the latter had provided funds to meet the check, which were lost by the failure of the bankers upon whom it was drawn. When the indorser paid the check without knowledge of the facts, the defendant received so much money from him to which it was not legally entitled. The plaintiffs' testator, having paid the check without knowledge of the facts which discharged him from all liability as indorser, was entitled to call upon the defendant to restore the money so paid. Carroll v. Sweet, 128 N. Y. 19, 27 N. E. 763;St. Nicholas Bank v. State Nat. Bank, 128 N. Y. 26, 27 N. E. 849;Murray v. Judah, 6 Cow. 490;Little v. Bank, 2 Hill, 425;Lake v. Bank, 3 Abb. Dec. 10; Daniel, Neg. Inst. § 1592. The indorser, therefore, had a good cause of action against the defendant; and unless the points urged by the defendant on this appeal, which will presently be considered, are of sufficient importance to defeat the recovery, the judgment must be sustained.
The first objection urged by the learned counsel for the defendant does not relate to the merits, but to the procedure or practice at the trial. The complaint as originally framed stated that the check was received by the defendant from the plaintiff for collection, and that it failed to present it at the bank where payable within a reasonable time, as it was bound to do, and that in consequence of this omission the plaintiff lost the amount for which it was drawn. It was shown at the trial without objection that the plaintiff had been credited with the check, and therefore that the defendant became the owner of it by the transaction, and that the depositor's relation to it was that of indorser. After this proof was all given, the plaintiff requested the court to permit the complaint to be amended by conforming the allegations to the proof. The defendant's counsel objected, but the court ordered the amendment, and the defendant excepted. The complaint was then amended by inserting an allegation that the check, when deposited, was credited to the plaintiff, and after its dishonor the defendant requested the plaintiff to take it up, which he did, without knowledge of the facts by reason of which all the parties to the paper had been discharged. This allegation was substituted for that in the original pleading which stated that the defendant had received the check for collection. It is urged that the court had no power to allow the amendment, and that the ruling in that respect was an error for which the judgment should be reversed. By section 723 of the present Code, the court has power at the trial to amend a pleading by inserting an allegation material to the case, or, where the amendment does not change substantially the claim or defense, by conforming the pleading to the facts proved. This power may be exercised by the court at the trial in furtherance of justice, and the statute which confers it has always received, in this court, a liberal, rather than a narrow, construction. When names were given to actions, it may be that the cause of action originally pleaded and that substituted at the trial would not be embraced in the same general classification, but that circumstance is not now very important. When a cause of action, however stated, is sustained by the same proof, the power of the court, under this section, to conform the statement in the pleading to the facts proved, is undoubted. It is not quite correct to say in this case that the original pleading stated a cause of action against the defendant based on negligence, while the amendment changed the action into one upon contract. In both cases the gravamen of the action was a breach on the part of the defendant of the obligation implied by law, to present the check for payment within a reasonable time. Under the complaint as originally framed, the plaintiff sought to recover the amount of the check as damages for breach by defendant of this obligation. Under the complaint as amended, he sought to recover the same sum of money on the ground that he had paid it to the bank under mistake, in that he supposed he was liable on the check as indorser, when he was not. In either form of action the essential fact to be established was the omission of the defendant to collect the check or present it for payment within a reasonable time. The plaintiff's loss and the right of recovery grew out of, and depended upon, the same facts in either case. In both cases the real scope and purpose of the action were to make the plaintiff good for the loss which he sustained in consequence of the failure of the defendant to discharge the obligation or duty which it had assumed upon the receipt of the check. A cause of action based upon the omission of the defendant to draw out the money upon the check before the bank upon which it was drawn failed is not substantially different, within the fair meaning of the statute, from a claim to make the plaintiff good for the money paid by him to take up the same check under circumstances, then unknown to him, which deprived the defendant of the right to demand or receive it. When the claim in either form can be substantiated by the same...
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