"FINDINGS
OF FACT.
"(1)
At and for some time prior to the times mentioned in these
findings of fact the plaintiffs, George M. Noble, A. D
Washburn, and J. H. Noble, constituted a partnership, were
doing business under the firm name of George M. Noble &
Co., and were engaged in business in the city of Topeka, and
among other things said partnership made collections for
non-residents.
"(2)
Prior to the 11th day of October, 1902, the plaintiffs made a
collection for the defendant, William Doughten, amounting to
$ 1548.75, and on said October 11, 1902, the plaintiffs drew
their check upon Gilman, Son & Company, of New York city
for $ 1543.75, payable to William Doughten, who then and for
a long time prior thereto had resided in the city of
Philadelphia, Pa., this being the amount due on said
collection after plaintiffs had deducted their commission for
making the same. Said check was in due course of mail
forwarded to the defendant. A copy of said check is in words
and figures as follows, to wit:
"'No.
5022. Geo. M. Noble & Co., Financial Agents.
"
To Gilman, Son & Company, New York.'
"(3)
The check described in finding No. 2 was received by the
defendant Doughten on October 14, 1902, and on the same day
was duly indorsed by him and deposited in the City Trust
Safe Deposit and Surety Company of Philadelphia, that being
the banking-house in which the defendant transacted his
business, and said check being deposited in the usual and
ordinary course of business pursued in transactions of that
kind.
"(4)
At the time the defendant received said check from the
plaintiffs there was no agreement or understanding between
him and plaintiffs that said check should be received in
payment of the amount due from plaintiffs to defendant.
"(5)
The City Trust, Safe Deposit and Surety Company of
Philadelphia, referred to in finding No. 3, on the same day
said check was received by it for deposit forwarded the same
to its New York correspondent, the Produce Exchange Bank, of
New York, and the same was received by said Produce Exchange
Bank on the morning of October 15, 1902, at about 8:30
o'clock A. M. No letter of instruction accompanied said
check, but a deposit slip was enclosed in the envelope
therewith.
"Before
forwarding said check as above recited, the City Trust, Safe
Deposit and Surety Company placed thereon the following
indorsement: Pay New York Exchange Bank or order.
Indorsements guaranteed.--THE CITY TRUST, SAFE DEPOSIT AND
SURETY COMPANY OF PHILADELPHIA. JAS. F. LYNDE, Secretary
and Treasurer.'
"(6)
The Produce Exchange Bank, referred to in finding No. 5,
presented said check to Gilman, Son & Company, of New
York, on October 15, 1902, some time before noon, and Gilman,
Son & Company drew their check in favor of said Produce
Exchange Bank for an equal amount upon the Western National
Bank, and took up the check drawn by plaintiffs. At that time
there was no agreement or understanding between Gilman, Son
& Company and said Produce Exchange Bank that this
transaction should constitute a payment of the check drawn by
plaintiffs, as described in finding No. 2, but it was the
usual and ordinary method of transacting business of that
character in the city of New York.
"(7)
At the time the check described in finding No. 2 was
presented to Gilman, Son & Company said last-named
company had on hand more than sufficient funds belonging to
the plaintiffs to pay said check, and doubtless would have
paid the same if the cash had been demanded by the party
presenting the check. At the time, and for a long time prior
thereto, Gilman, Son & Company had been engaged in the
banking business in New York city, and was a reputable
banking-house in good standing.
"(8)
Said banking-house of Gilman, Son & Company closed its
doors and ceased to do business at about 2:45 o'clock P.
M. on October 16, 1902; suspended payment of all checks, and
executed a deed of assignment on the evening of that day. The
preparation of said deed of assignment was commenced
immediately after said banking-house had closed its doors.
"(9)
The check drawn by Gilman, Son & Company upon the Western
National Bank in favor of said Produce Exchange Bank, as
recited in finding No. 6, was presented in due course of
business, passing through the clearing-house, and payment
thereof was refused for the reason that Gilman, Son &
Company had closed their doors and had no deposit in said
Western National Bank out of which said check could be paid.
"(10)
All of the New York banks referred to in these findings of
fact were members of the clearinghouse association of the
city of New York, except the banking-house of Gilman, Son
& Company. There are about sixty banks in New York city
which belong to said association, and about twenty-five or
thirty private banks and banking institutions in said city
which do not belong to said clearing-house association.
"(11)
The method in which the business of said clearing-house
association of New York city is done, as between the banks
belonging to said association, is substantially as follows:
The checks deposited in a bank on any particular day are
assorted and distributed into a rack in which each bank
belonging to the clearing-house association has a pigeonhole,
so that the checks upon different banks are collected
together and made into packages. The next morning thereafter
the packages so made up are sent to the clearinghouse and
delivered to the representatives of the several banks. There
is a regular system or practice of delivering the checks at
the various desks, so that when the checks are all delivered
or exchanged clearance is made and each bank receives all
checks drawn upon it, and each bank delivers to the
representatives of all other banks checks drawn upon such
other banks and paid through it. Each bank then foots up its
debit and credit amounts, and if the result is a debit
balance it is required to send to the clearing-house by
half-past twelve o'clock that day the cash necessary to
provide for said debit balance; but if such bank has a credit
balance, it receives its cash credit about half-past one
o'clock that day.
"(12)
Where a check is drawn by one bank upon another bank, either
being a member of the clearinghouse association, the custom
is for said check to go through the clearing-house for
collection. The aggregate amount of checks passing through
said clearinghouse association of New York city each day
would amount approximately to $ 250,000,000. The number of
checks so handled through the clearing-house per day is
ordinarily numbered in the millions. There is no charge made
by New York banks for the collection of checks in the city of
New York.
"(13)
When the check of plaintiffs was presented to Gilman, Son
& Company, and that bank issued its check therefor, the
plaintiffs' check was stamped 'paid,' and after
the check of said Gilman, Son & Company had been
dishonored by the Western National Bank, and after Gilman,
Son & Company had closed their doors and made an
assignment for the benefit of their creditors, the Produce
Exchange Bank sent its representative to Gilman, Son &
Company and procured the check which had been drawn by the
plaintiffs, described in finding No. 2, to be protested for
non-payment.
"(14)
The check drawn by Gilman, Son & Company upon the Western
National Bank in favor of the Produce Exchange Bank, as
recited in finding No. 6, was received at the Produce
Exchange Bank about 2:30 o'clock P. M. on October 15
1902, was charged to the Western National Bank, the stamp of
said Produce Exchange Bank was placed upon the check, and the
same was assorted and distributed, as any other check that
came in, after being stamped 'paid.' Said check
remained in said Produce Exchange Bank, assorted and
distributed as above recited, until five o'clock on
October 15, when it was placed in the safe over night, and on
the morning of the 16th of October the same was taken from
the safe and placed in the pigeonhole where it had been after
assorting and distributing on the day before. Said check went
through the usual course of the clearing-house and went into
the hands of the Western National Bank. The representative of
said Produce Exchange Bank left said bank with said check and
others about twenty minutes before ten o'clock A. M. ,
and reached the clearing-house at about fifteen minutes
before ten o'clock on October 16, and said check then
passed to the hands of the Western National Bank at about...
