Mt. Sterling National Bank v. Green

• Decision Date: 14 May 1896
• Parties: Mt. Sterling National Bank v. Green.
• Court: Kentucky Court of Appeals

99 Ky. 262

Mt. Sterling National Bank v. Green.

Court of Appeals of Kentucky.

May 14, 1896.

APPEAL FROM MONTGOMERY CIRCUIT COURT.

TYLER & APPERSON FOR APPELLANT.

A. T. WOOD, B. F. DAY AND Z. T. YOUNG FOR APPELLEE.

C. P. CHENAULT FOR APPELLEE.

JUDGE LEWIS DELIVERED THE OPINION OF THE COURT.

James Green, brought this action to recover of the Mt. Sterling National Bank $5,000 damages, his cause thereof being stated substantially as follows: That October 17, 1892, he drew his check on defendant for $1,000, payable to the order of Sally A. Bratton, which was October 27, 1892, duly presented for payment; but that although when said check was drawn and delivered, as also when it was presented by Sally A. Bratton for payment, plaintiff had ample money on deposit and to his credit in the bank to pay said check, defendant refused to pay and caused the check to be protested, and thereby injured plaintiff's credit and standing in the community as an honorable business man to his great damage, etc.

As ground of defense, defendant stated in its answer substantially that December 2, 1891, plaintiff executed and delivered to it his promissory note, agreeing to pay six months thereafter $5,671.31, which became due June 2, 1892; that October 27, 1892, said note was still due and unpaid, and was for largely more than plaintiff then had on deposit and to his credit in defendant's bank; that because it had a lien upon and right of set-off against amount of plaintiff's credit on that day as depositor, defendant refused to pay said check and retained the amount of his deposit until October 31, 1892, when payment was actually made by him of the note, and then defendant released its lien and plaintiff drew checks in favor of other parties for the entire amount of his deposit, which were paid as presented.

To that answer a general demurrer was filed and sustained, demurrer to the petition having been previously overruled, and verdict and judgment being subsequently rendered in favor of plaintiff for $2,000, the defendant appealed.

It seems to be well settled that the obligation of a bank to pay checks, drafts and orders of a depositor so long as it has in its possession funds of his sufficient to do so, and which are not incumbered by the attaching of an earlier lien in favor of the bank, and the reciprocal right of the depositor to have them paid are so far substantial, that if the bank refuses without sufficient justification to pay the check of a customer the customer has his action for damages against the bank. (Morse on Bank and Banking, section 458.)

As, therefore, the statements in the petition constitute prima facie a cause of action, the demurrer to it was properly overruled.

But in the language of the Masonic Savings Bank v. Bang's adm'r, 8 Ky. Law Rep., 16, "The right of a bank to a general lien on...