Nineteenth Ward Bank v. First Nat. Bank of South Weymouth

Decision Date19 June 1903
Citation184 Mass. 49,67 N.E. 670
CourtUnited States State Supreme Judicial Court of Massachusetts Supreme Court

Gaston, Snow & Saltonstall and Malcolm Donald, for plaintiff.

Geo. L Wentworth, for defendant.



The sole question is whether the note was paid before the defendant was notified of the failure and assignment of the makers. The court found that it had not been paid. This finding must stand, unless there was some error of law made at the trial.

The facts do not seem to be in dispute, and, stated in its lowest terms, the real question is whether they show, as matter of law, a payment of the note. The note, properly indorsed, was sent several days before its maturity to the defendant for 'collection and remittance.' The makers were regular depositors at the defendant bank, and the note was upon its face made expressly payable there. On Monday, October 7 1901, the time for the payment of the note had come. It was in the hands of the defendant, as the indorsee and holder for collection, and the deposit of the makers then in the defendant's hands was more than sufficient to pay it.

It is well to see what where the duties and powers of the defendant at this time with reference to the note. The defendant, as the indorsee and representative of the real owner of the note, was the party entitled to demand and receive payment. Payment to it by the makers would be, therefore, a payment of the note. It had a further duty, which was to remit to the plaintiff the money received from the makers. It is obvious that this last act was no part of the payment of the note. It was an act with which the makers had no concern, because, if the note was paid by them to the defendant, their liability was entirely discharged.

What was the relation of the defendant to the makers, and what could it do as their agent? It had in its vault money belonging to the makers, and sufficient to pay the note, which was expressly made payable at the bank. In England it is well settled that, if an acceptor makes his acceptance payable at a particular bank, it is tantamount to an order on his part to the bank to pay the bill to any person who by the law merchant is entitled to give a good discharge. See Roberts v. Tucker, 16 A. & E. N. S. 578; 1 Daniel on Negotiable Instruments (5th Ed.) § 326a, and cases therein cited. And although in this country there is some conflict, still it would seem that by the weight of authority a note payable at a bank where the maker keeps his account is equivalent to a check drawn by him upon that bank, so far, at least, as respects the power and duty of the bank to pay it. Indig v. National City Bank, 80 N.Y. 106; Wyman v. National Bank, 181 Ill. 279, 54 N.E. 946, 48 L. R. A. 565, 72 Am. St. Rep. 259, and other cases cited in 1 Daniel on Negotiable Instruments (5th Ed.)§ 326a. But whatever may be the rule in the absence of any directions to the bank from the maker, it appears from the evidence in this case that the defendant, in accordance with the understanding between it and these makers, had been in the habit of paying their notes when made payable at the bank, and in accordance with this course of dealing it must be assumed that the bank was directed by the makers to pay this note at maturity out of the deposit then standing therein to their credit. Indeed, the defendant does not contend to the contrary. Since the cashier represented the bank, his act and purposes were those of the bank.

In this state of things the cashier, charged with the deties and invested with the powers of the defendant both as to the plaintiff and as to themselves respecting this note, proceeds on October 7, 1901, soon after the beginning of the day's...

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