Saint Nicholas Bank v. State National Bank

McKinster, 11 Wend. 473 , where it was held that the bank, with Which a note was left for collection, was liable for the failure to give the notice of nonpayment, which was necessary to charge the indorsers. In the case of Allen v. Bank, 22 Wend. 215 , this liability was again affirmed, and so far extended as to render the collecting agent liable for the default of agents employed by it for the effectual collection of the debt. There the bank receiving the bill from the plaintiff sent it to the Philadelphia Bank, in the city of Philadelphia, for collection; and that bank delivered it to its notary, who presented it for acceptance, which was refused. He then noted the bill for non-acceptance, but omitted to give notice thereof to the indorsers. When the bill became due it was in like manner presented for payment, and payment refused, when the notary protested it for non-payment. The question there was whether the Merchants’ Bank-of Hew York, which received the bill from the plaintiff, was liable to him for this omission of the notary to protest the bill for nonacceptance; and the court held that it was, although the defaulting notary was not selected to act by it, and was not its own agent or servant. The conclusion arrived at by the decision was declared by a formal resolution, holding that when a bank, broker, or other money dealer receives upon a good consideration a note or bill for collection in the place where such bank, broker, or dealer carries on business, or at a distant place, the party receiving it for collection is liable for the neglect, omission, or other misconduct of the bank or agent to whom it is sent, either in the negotiation, collection, or paying over the money, by which it is lost, or other injury sustained by the owner, unless there be some agreement to the contrary, expressed or implied. Id. 243 . And this has been followed, although differing from the rule followed in several other states, in Montgomery Co. Bank v. Albany City Bank, 7 N. Y. 459 ; Commercial Bank v. Union Bank, 11 N. Y. 203 ; Ayrault v. Bank, 47 N. Y. 570 ; Exchange Nat. Bank v. Third Nat. Bank, 112 U. S. 282 , 5 Sup. Ct. Rep. 141 ,—and in cases also decided in other states. In this latter case, the bill was sent to the defendant, and under its authority presented to the drawee for acceptance, and he accepted it personally, when it had been drawn on him, as secretary of the Hewark Tea-Tray Company. Here, as well as in the other cases mentioned or referred to, there was a distinct act of misconduct or neglect producing the loss, on which the liability was directly placed; while in the present case there was neither wrong, inattention, nor carelessness, on which the liability of the defendant could be placed, but the prevailing mode of transmitting the funds collected was adopted and followed. This case also differs in a very material respect from Mackersy v. Ramsays, 9 Clark & F. 818, where the correspondent was held liable because it had received the money and afterwards omitted, by reason of their failure, to remit, or pay it over. The same result was reached after a very full examination of the authorities in Bradstreet v. Everson, 72 Pa. St. 124 . But the principle followed by these cases cannot logically determine the one presented by this appeal, for here the defendant did not receive or retain the money; neither was there any default in that respect on the part of its correspondents in Dallas, for they at once remitted the proceeds of the collection by the means usually taken for that object, and they were lost, not by any misconduct at either place, but by failures in business, which will at times occur, but which ordinarily cannot be expected or anticipated. They are the misfortunes of business, entailing losses without fault or misconduct, which must be sustained by the parties upon whom they fall. In the case of Indig v. Bank, 80 N. Y. 100 , the important facts were like those now presented. The plaintiff delivered a note for collection to the defendant. It was payable at the Bank of Lowville, to which the defendant sent it for payment. The maker was a depositor in that bank, but resided about 30 miles therefrom. His balance was sufficient within $30 to pay the note, and the bank thereupon sent back its draft on Hew York for the amount of the note, but before it could be pre

sented the bank at Lowville failed, and payment of the draft was refused, and the action there was to recover the loss. But the court held that the defendant was not liable, as the ordinary course had been followed, and there was no fault or negligence in selecting and using the means adopted for remitting the money. And the principle followed in deciding that case has also been sanctioned in Massachusetts, (Buell v. Chapin, 99 Mass. 594 ,) and that seems to be likewise the law in the state of Tennessee, (Bank of Louisville v. First Nat. Bank, 8 Baxt. 101 .) The case of Faulkner v. Hart, 82 N. Y. 413 , justifies the application of no different rule to the decision of this case. That relates to a different subject, in no way including the present controversy. It is true that it is to be disposed of'under the general rules of the commercial law. But there is no authority for holding the rule necessarily invoked for this case to be in any respect at variance with that which was declared and followed in the cases last mentioned. There is no well-sustained principle declaring the liability of the defendant under the facts now appearing, and the judgment should be reversed, and .a new trial ordered, with costs to the defendant' to abide the result. All concur.