Union & New Haven Trust Co. v. Thompson

• Decision Date: 19 May 1948
• Citation: Union & New Haven Trust Co. v. Thompson, 134 Conn. 607, 59 A.2d 727 (Conn. 1948)
• Court: Connecticut Supreme Court
• Parties: UNION & NEW HAVEN TRUST CO. v. THOMPSON et al.

134 Conn. 607

59 A.2d 727

UNION & NEW HAVEN TRUST CO.

v.THOMPSON et al.

Supreme Court of Errors of Connecticut.

May 19, 1948.

Appeal from Court of Common Pleas, New Haven County; Pickett, Judge.

Action by the Union & New Haven Trust Co. against John R. Thompson and others, to recover the amount paid by the plaintiff to the defendants upon a check contrary to a stop payment order, brought to the Court of Common Pleas and tried to the court. Judgment for defendants and plaintiff appeals.

No error.

D. C. Gordon and Joseph D. DiSesa, both of New Haven, for appellant.

James F. Rosen, of New Haven (Armen K. Krikorian, of New Haven, on the brief), for appellees.

Before MALTBIE, C. J., and BROWN, JENNINGS, ELLS and DICKENSON, JJ.

BROWN, Judge.

The plaintiff bank sued to recover $105, the amount of a check drawn upon it payable to the defendants' order and paid by mistake, upon presentment for collection, after the bank had received a stop payment order from the drawer. The court rendered judgment for the defendants and the plaintiff has appealed. It is undisputed that the bank was negligent in honoring the check. The question is whether upon the record the court was warranted in denying it recovery.

The facts found by the court, in so far as material to our decision, are not subject to correction and may be thus summarized: On November 15, 1946, the Pascale Manufacturing Company, which had a checking account in the Hamden branch of the plaintiff bank, drew a check thereon to the order of the defendants for $105, and at all times maintained a balance in excess of that sum. The defendants indorsed the check and deposited it in the Colonial Trust Company of Waterbury, which credited it to their account and forwarded it for clearance through the Boston clearing house. It was presented to the plaintiff and honored by it November 22, 1946. On November 19, 1946, the plaintiff had received from the Pascale Company a written stop payment order on this check, but by oversight the check was paid in due course, as stated above, and the payment credited on the defendants' account in the Colonial Trust Company. In December the mistake was discoverd and the plaintiff reimbursed the Pascale Company by crediting its account with $105.

Prior to September 28, 1946, the Pascale Company had engaged a contractor, Ierardi, to build a factory building requiring special size steel window sash, which he ordered of the defendants. Because of lack of satisfactory information as to his credit rating, they refused to supply the sash without payment in advance. In consequence of this, after several weeks of negotiation and delay, the Pascale Company issued its check of November 15, 1946, to the defendants. On November 20, 1946, the company cancelled its order for the steel sash, but the defendants refused to accept the cancellation. The sash was manufactured and at the time of trial was on hand ready for delivery, but was not readily marketable because of the fact that it was of the special size ordered. On January 10, 1947, the plaintiff wrote the defendants either to deliver the sash to the Pascale Company or to reimburse the bank in the sum of $105. The defendants did neither, though the sash was on hand for delivery. There was no evidence that the Pascale Company would have accepted delivery at any time after its attempted cancellation. The defendants first learned of the stop payment order by a letter from the bank dated January 10, 1947. There was no evidence of fraud or bad faith by the defendants in negotiating the check or otherwise. No act of the defendants misled the bank or induced its error in honoring the check, but it was negligent in disregarding the stop payment order.

In urging that the court erred in rendering judgment for the defendants, the plaintiff rests its appeal upon a rule of law which is thus quoted in its brief: ‘It has been held that banks paying out money by mistake may recover even though they were negligent in making the mistake, provided no damage has been suffered by the party receiving the money.’ Turetsky v. Morris Plan Industrial Bank of New York, Sup.App.T., 22 N.Y.S.2d 514, 515. Other authorities cited in support of the rule are National Loan & Exchange Bank v. Lachovitz, 131 S.C. 432, 128 S.E. 10, 39 A.L.R. 1237; Foster v. Federal Reserve Bank of Philadelphia, 3 Cir., 113 F.2d 326; note, 39 A.L.R. 1239, 1240; 9 C.J.S., Banks & Banking, page 724, § 354c. This is but an application to the particular situation of a general rule of law supported by the weight of authority. 40 Am.Jur. 848. We have stated the general principle in this way: ‘Where money is paid under a mistake of fact, it is no defense to an action brought to recover it that the mistake arose through the...