Rock Island Plow Co. v. Percy
| Decision Date | 23 September 1929 |
| Docket Number | No. 4603.,4603. |
| Citation | 20 S.W.2d 956 |
| Parties | ROCK ISLAND PLOW COMPANY, APPELLANT, v. E.H. PERCY, RESPONDENT. |
| Court | Missouri Court of Appeals |
Appeal from the New Madrid County Circuit Court. — Hon. Henry C. Riley, Judge.
REVERSED AND REMANDED.
Shelley I. Stiles and Sam J. Corbett for appellant.
(1) The verdict of the jury is against the evidence and the law under the evidence. (a) The defendant admitted plaintiff's case, but pleaded payment, and the burden was on him to show payment, and defendant admitted that he did not know whether the plaintiff had received the money for the check he gave, or not. And, there was no evidence in the case that the plaintiff ever accepted the check as full payment and satisfaction of the account sued on, as pleaded in defendant's answer. A check is not payment of a pre-existing account, and does not extinguish the demand, unless there is a special agreement by the creditor to so accept it. Stark et al. v. Public Nat. Bank of N.Y., 206 N.Y. Sup. 8, 20 R.C.L., sec. 70, page 70; Jensen v. Wilslef (Nev.), 132 Pac. 16; Armstrong v. First Nat. Bank of Bolivar (Mo. App.), 195 S.W. 562; Sanitary Can Co. v. Natl. Pickle & Canning Co. (Iowa), 184 N.W. 354; Lange v. MidWest Motors Securities Co. (Mo. App.), 231 S.W. 272; In re Perpall (Mo. App.), 256 Fed. 758; Groomer v. McMillan, 128 S.W. 285, 143 Mo. App. 612; Royal Indemnity Co. v. Beiseker, 245 Fed. 346; Ware v. Lee, 26 Mo. App. 99; Waggoner Bank & Trust Co. v. Gamer Co. (Tex.), 213 S.W. 927; 30 Cyc., p. 1191; 30 Cyc., page 1207, sec. 3; Johnson-Brinkham Co. v. Central Bank of K.C. (Mo.), 22 S.W. 813, l.c. 816. (2) (b) A check drawn on a bank, by one who has money deposited in the bank, in favor of another is no more than an order given on a third person to pay or deliver goods or property, and until the money or property is delivered in compliance with the order, there could be no plea of payment. "An order drawn by the debtor upon a third person in favor of the creditor for the payment of money or goods is not a payment of the debt unless order has actually been paid." 30 Cyc. 1191, sec. b: Hoar v. Clute, 15 Johns (N.Y.) 224; McNeal v. McCamley, 6 Tex. 163. (3) (c) It is only where the payee of a check fails to use diligence in presenting it for payment, and the party giving it sustains loss by reason of the failure of the payee to use due diligence, that the check will be held to operate as actual payment. And there is no contention in that respect in this case. 30 Cyc. 1209, sec. b; Groomer v. McMillan, 143 Mo. App. 612, 128 S.W. 285. (4) The Bank of Canalou had in its hands the money of E.H. Percy, the respondent, which it was holding as his agent or representative, and not as the agent or representative of the appellant, and as between appellant, Rock Island Plow Company, respondent, E.H. Percy, the neglect or failure of the Bank of Canalou to pay the check, and the resultant must fall on the respondent, E.H. Percy, rather than on the appellant. Rivers v. House (Ark.), 234 S.W. 641, l.c. 642; Virginia-Carolina Chemical Co. v. Steen, 99 Miss. 504, 55 So. 47, 34 L.R.A. (N.S.) 734; Mosher v. Phillips (Wash.), 213 Pac. 484.
Sharp & Baynes for respondent.
(1) It is established by the great weight of authorities that where a check is remitted to the drawee for collection the drawee is made the collection agent of the holder. The duty to collect is addition to its duty as drawee to pay. 2 Paton's Digest, page 1504, sec. 1568a; Bank v. Millspaugh, 314 Mo. l.c. ___, 282 S.W. 706; State Farmers Ins. Co. v. Cantley, 6 S.W. (2d) 970; Gentry County v. Farmers & Merchants Bank, 5 S.W. (2d) 1110; First Nat'l Bank v. First Nat'l Bank, 127 Tenn. 205, S.C. 154 S.W. 965; Baldwin's Bank v. Smith, 215 N.Y. 76, L.R.A. 1918F, page 1089. (2) It is also established according to the great weight of authorities that where the check so remitted is charged to the account of the drawer the drawer is discharged from further liability and the fund there is held by the drawee as agent of holder and at his risk, and if the drawee fails to remit or his remittance is dishonored the loss falls on the holder and he is limited to recourse upon the failed bank for his money. 2 Paton's Digest, page 1504, sec. 1568a; Daniels v. St. Louis Nat'l Bank, 67 Ark. 236, S.C. 54 S.W. 214; Smith Roof & Cons. Co. v. Mitchell, 117 Ga. 772; Planters Merc. Co. v. Armour Packing Co., 109 Miss. 470; Briggs v. Central Natl. Bank, 89 N.Y. 182; 19th Ward Bank v. First Nat'l Bank, 184 Mass. 49; Harmon v. Barber, 105 S.C. 161; Winchester Mill Co. v. Bank, 120 Tenn. 225; Pinkney v. Kanawha Valley Bank, 8 W. Va. 254; (Also cases cited under Point No. 1.) 21 R.C.L., sec. 68, page 69. (3) The plaintiff (appellant) has mistaken its remedy in this case. Under the authorities in this State plaintiff could have filed its claim against the Bank Commissioner in charge of the failed bank and had its claim preferred and paid in full. Bank v. Millspaugh, 214 Mo. 1; Poplar Bluff Bank v. Millspaugh, 275 S.W. 579; State Farmers Mutual Ins. Co. v. Cantley, 6 S.W. (2d) 970.
Action for debt for goods sold and delivered. Defense of payment; judgment for defendant and plaintiff appealed.
The facts are admitted and the only question here is whether upon these facts the debt was paid. The account was admitted by defendant to be correct and his plea of payment rested upon the following facts as learned from the abstract of record and statements in briefs of counsel not shown in the record. The defendant sent plaintiff a check by mail on May 28, 1927, for $213.28, the amount of the bill after allowing certain discounts for prompt payment. Plaintiff received this check at its place of business in Rock Island in the State of Illinois on May 31, 1927. The plaintiff on the same day deposited it in the State Bank of Rock Island, Rock Island, Illinois, in which bank it carried an account as a depositor and received credit therefor. The check was drawn on the Bank of Canalou, Canalou, Missouri. The Bank of Rock Island promptly mailed this check direct to the Bank of Canalou on which it was drawn for payment and remittance. Counsel agree in their printed statement that the Bank of Canalou received the check through the mail on June 4, 1927, and on the same day marked the check paid and charged it to the account of defendant, the drawer of the check, though this fact does not appear in the abstract of record. The Bank of Canalou did not remit to the bank at Rock Island, Illinois. The Bank of Canalou closed its doors on June 7, 1927, without having made any remittance upon this check. After this bank failed, the Bank of Rock Island notified plaintiff that the check had not been paid and required plaintiff to repay to it the amount of the check. Plaintiff then sued defendant for the debt which the check was given to pay.
It is certain that the mere delivery of the check to plaintiff by defendant did not pay the debt. The defendant continued to owe the plaintiff until the check should be collected by plaintiff and if plaintiff used due diligence to collect the check and failed, the debt was not paid. [Johnson & Brinkman Co. v. Central Bank, 116 Mo. 558, 570, 22 S.W. 813; Coffman v. Fleming, 301 Mo. 313, 319, 256 S.W. 731; Lewis v. McMahon & Co., 307 Mo. 552, 566, 271 S.W. 779; Maxwell v. Dunham (Mo. App.), 297 S.W. 94, 97.]
In some of these cases it is said that a check is not payment until the holder received the money on it while others used the language "until the check is paid." In discussing that question it is said in Coffman v. Fleming, supra, on page 319 that "In one sense, the holder of the check becomes the agent of the drawer to collect the money on it." We agree with that statement. In this case, the plaintiff was the agent of defendant to collect the money on the check which defendant delivered to it. On accepting the check the plaintiff owed defendant the duty to present it to the bank for payment within a reasonable time and that was the only duty the plaintiff assumed in relation to the check. Counsel on both sides concede in their printed statement of the case that the check was forwarded for collection through the usual channel. By doing that, plaintiff discharged its full duty relative to the check and did nothing that could release defendant from his liability to pay the debt for which the check was given. As between the drawer and the holder of the check the check is merely an order on the bank to pay to the holder the amount of the check when presented for payment. The bank on which it is drawn owes this duty to the drawer of the check for that is what it contracted with the drawer to do when he deposited the money in the bank. Suppose that instead of the check being mailed to the bank on which it was drawn the plaintiff had endorsed it and sent it back to defendant and asked him to present it in person and defendant had presented the check in person to the bank for payment and the bank officials had marked the check paid and charged the amount of it against the...
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