Wiley v. Bunker Hill Nat. Bank

• Decision Date: 17 June 1903
• Citation: 183 Mass. 495,67 N.E. 655
• Parties: WILEY v. BUNKER HILL NAT. BANK.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

183 Mass. 495

67 N.E. 655

WILEY v. BUNKER HILL NAT. BANK.

Supreme Judicial Court of Massachusetts, Suffolk.

June 17, 1903

COUNSEL

Blaney & Robinson and Chas. W. Bartlett, for plaintiff.

Lewis S. Dabney and Henry W. Bragg, for defendant.

OPINION

MORTON J.

This is an action to recover damages for the refusal by the defendant to honor certain checks drawn on it by the plaintiff against a deposit subject to check which he had with the defendant and which was more than sufficient to meet the checks so drawn when presented. The action is described in the writ as in contract and tort, it being doubtful to which class it belongs. The declaration contains eight counts. The eighth count was waived at the trial, and the case proceeded on the remaining counts, each count representing a different check. There was a verdict for the plaintiff, and the case is here on exceptions by the defendant to the refusal of the presiding judge to give certain rulings asked for by it, and to the giving by him of certain rulings requested by the plaintiff. There is also an appeal by the defendant from the overruling of a demurrer to the declaration. This has not been argued, and we therefore treat it as waived.

A bank is bound to honor checks drawn on it by a depositor if it has sufficient funds belonging to the depositor when the check is presented and the funds are not subject to any lien or claim, and for its refusal or neglect to do so it is liable to an action by the depositor. Nat. Mahaiwe Bank v. Peck, 127 Mass. 298, 34 Am. Rep. 368; Carr v. Nat. Security Bank, 107 Mass. 45, 48, 9 Am. Rep. 6; Dana v. Third Nat. Bank, 13 Allen, 445, 448, 90 Am Dec. 216; Marzetti v. Williams (1830) 1 B. & Ad 415; Rolin v. Steward (1854) 14 C. B. 495; Am. Nat. Bank v. Morey (Ky.) 69 S.W. 759, 58 L. R. A. 956; Hopkinson v. Foster (1874) L. R. 19 Eq. 74; 2 Parsons, Notes & Bills (1st Ed.) 62, 63; 2 Daniel on Neg. Instr. (3d Ed.) § 1642; 5 Am. & Eng. Ency. of Law (2d Ed.) 1059, 1060.

The cause of action, though sometimes spoken of as in the nature of a tort, arises out of a breach of the contract implied from the relation of the parties that the banker will honor the checks of the depositor, and the party aggrieved may recover, as in other cases of a breach of contract, for the damages that are the natural and reasonable consequences of the breach. Special damages may also be recovered if they are properly alleged. Marzetti v. Williams, supra; Rolin v. Steward, supra; Hopkinson v. Foster, supra; Prehn v. Royal Bank (1870) L. R. 5 Eq. 92; Larios v. Bonany y Gurety (1873) L. R. 5 P. C. 346; Fleming v. Bank of New Zealand (1900) A. C. 577; Patterson v. Marine Bank, 130 Pa. 419, 433, 18 A. 632, 17 Am. St. Rep. 778; Schaffner v. Ehrman, 139 Ill. 109, 28 N.E. 917, 15 L. R. A. 134, 32 Am. St. Rep. 192; James v. Cont. Bank, 105 Tenn. 1, 58 S.W. 261, 51 L. R. A. 255, 80 Am. St. Rep. 857; Svendsen v. State Bank of Duluth, 64 Minn. 40, 65 N.W. 1086, 31 L. R. A. 552, 58 Am. St. Rep. 522; Am. Nat. Bank v. Morey (Ky.) 69 S.W. 759, 58 L. R. A. 956; Robey v. Oriental Bank, 2 S. C. R. (N. S.) New So. Wales, 56, 63.

In the case of a trader, injury to his credit may be inferred from the fact that he is a trader, and substantial damages may be found and given upon proof of that fact, without anything more. In the case of a person who is not a trader, if no special damages are alleged or proved, nominal damages at least may be recovered. In the present case the declaration alleges that the plaintiff was and had been a trader engaged in the business of buying and selling coal and wood in Charlestown, and there was evidence tending to show that his business amounted to $150,000 yearly. It was competent, therefore, for the jury to find and award substantial damages, and the ruling requested, that the plaintiff could recover only nominal damages, was rightly refused, unless the rulings requested in regard to set-off should have been given. For reasons already given, the first request was also rightly refused, as was also that part of the second which sought to limit the defendant's liability to the amount of the plaintiff's funds in its hands, or to the amount of the check or checks that were refused payment. The rest of the second request was given.

The remaining question relates to the right in equity of the defendant to set off, by reason of the plaintiff's insolvency, against the deposit, two unmatured notes made by the plaintiff and discounted and held by the defendant. This is an action at law, and the defendant concedes that there is no right of set-off at law. But it contends that, the plaintiff being in fact insolvent at the time when the checks in question were drawn and presented, it had the right in equity to refuse payment, and to apply the deposit to the notes held by it against the plaintiff, notwithstanding they had not matured. No question is made as to the defendant's right to deduct the demand notes from the plaintiff's deposit, but the plaintiff contends that neither in equity nor at law had the defendant the right to set off the notes that were not due. It is to be observed that the answer does not, in terms at least, aver that the defendant had a right to an equitable set-off, and acted thereunder, though it alleges that the plaintiff was in fact insolvent prior to the presentment of the checks. But this objection has not been taken. At the time when the defendant refused to pay or honor the check in question, no proceedings had been instituted by or against the plaintiff to have him adjudged insolvent. He...