Viets v. Union National Bank

Learned, P. J.:

The plaintiff was a depositor in the defendants’ bank. The defendants have never paid to him, or to anyone authorized by him to receive the money, the amount of the deposit. In the year 1878 the plaintiff made a demand of the money, which was refused, and he brought this action thereafter in the same year to recover the amount.

It is claimed that the action is barred for this reason: On February 19, 1869, the plaintiff gave John Banker two checks, amounting in the aggregate to $4,867. On the -21st or 22d of February, 1869, John Banker indorsed these checks to Ellen M. Houghtaling. On the 6th of March, 1869, one of these checks was pi’esented and payment refused. It does not appear for whom it was presented. On the 28th of August, 1871, the. other was presented and payment refused. John Banker did not present either of them. It does not appear by direct proof that they were protested and notice given to plaintiff. But it does appear that Ellen M. Banker (formerly Houghtaling), after the said presentations of the checks, recovered a judgment on each of them against the plaintiff, and in those judgment-rolls due notice of presentment is averred.

Without going over the evidence as to the so-called injunction-order, and the unauthorized payment made by the defendant upon a bond of indemnity, it seems to me that the question of the statute of limitations is the only one necessary to consider. That question is this: When it appears - that a depositor in a bank has drawn his check thereon to a payee, and that such check-has- been indorsed and presented, and payment refused, do those facts, without any other proof, constitute such a demand that the statute of limitations begins to run in favor of the bank and against the depositor.

The bank is bound to pay to the depositor. It is not bound to pay to anyone else. Therefore the holder of a check cannot sue the bank. The bank may voluntarily pay the payee named in the check, or an indorsee, and such payment will, to that extent, relieve it from liability to the depositor.

The check does not transfer a part of the funds to the payee; *486otherwise he could sue. The payee may sometimes be, but is not necessarily, the agent of the drawer. If not the agent of the drawer, then the payee, in presenting the check, does not make a demand for the depositor. And no one but the depositor has a right to make a demand of payment.

And just here it seems to me that the distinction lies. A demand of- payment must be made by the person to whom payment is to be made. I do not mean that such person may not employ an agent to make the demand. For on the familiar principle, that what one does by an agent he does himself, such a demand would be the depositor’s demand. But the payee of a check is not necessarily, and is riot ordinarily, the agent of the drawer. Still less is the indorsee of the payee. So that when the indorsee, or even when the payee, presents a check, he does not make a demand of payment for the depositor.

The defendant cites, as showing the contrary, Oddie v. National City Bank (45 N. Y., 735). But an examination of that case will show that it in no way involves the question here presented, viz., whether a refusal to pay a check makes the statute of limitations begin to run between the depositor and the bank.

The depositor should not be affected by a refusal, of which he has not, at the time, knowledge, either personally or through an agent. But the drawer has not necessarily notice of the presenting of a check by the payee at the time when the presentment is made. If it be argued that the check will be protested, and he will receive notice of payment, then does the statute of limitations begin to run from the day on which he receives notice, or from the day of presentment? If the former, then the drawer’s receipt of notice is construed to be a demand of payment; if the latter, then he is affected by a demand of payment of which he is ignorant.

It seems to me that the principle so often settled, that the payee of a check has no right of action against the bank for a refusal to pay, concludes this question.

The defendants have the money of the plaintiff on deposit. It must be held, on the proof, that they have not paid it to him, or to anyone whom he authorized to receive it. The statute ought not to run until the plaintiff has made his own demand (personally or through his agent) and has been refused. To hold that from the *487day that a check is presented, even by some endorsee of a payee, and payment refused, the statute begins to run in favor of the bank and against the drawer seem to me to be erroneous.

Still another consideration. Suppose a depositor draws a check for a part of the deposit and that check is presented by the indorsee of the payee and payment refused. Now if the depositor can thereupon at once sue the bank; for how much can he sue ? The amount of the check ? Then he can divide up his claim and subject the bank to several actions for one deposit. The total deposit? That has never been demanded.

I think the judgment should be affirmed, with costs.

Bordman, J., concurred.