Herider v. Phoenix Loan Ass'n

ELLISON, J.

The plaintiffs reside and do business at Slater, Missouri, while defendant is a corporation doing busi*430ness at St. Joseph, Missouri. Plaintiffs were agents for defendant at Slater, and claiming the sum of $174.93 as due them, they sued defendant for that amount. The judgment in the circuit court was for defendant.

The reason defendant refused to pay plaintiffs the sum stated is that it claim plaintiffs owe it the same amount. Plaintiffs claim they paid defendant that amount by check on the Slater Savings Bank, a banking institution doing business at Slater. Defendant claims that such check was received by it and forwarded to Slater in due and customary course for collection; but that before it reached Slater the Savings Bank upon which it was drawn, closed its doors and was utterly insolvent. The. whole controversy relates to the question of negligence or. diligence in presenting the check for payment.

In the various dealings between the parties plaintiffs had customarilyremitted to defendant bytheir check on their local bank. The check in question was dated December 11, 1894, and was received by defendant on December 13, and was deposited with the German American Bank at St. Joseph for collection for defendant on the same day. And on the same day the German American Bank mailed it to the Metropolitan Bank at Kansas City, Missouri, for collection. It was received by the latter bank on the fourteenth, and on the same day mailed to the bank of Wood & Huston at Marshall, Missouri, a city about twelve miles from Slater. It was received by Wood & Huston on the morning of the fifteenth and on the same day mailed back to the Metropolitan Bank at Kansas City, and the sixteenth being Sunday, was received by the latter on the seventeenth. It was then, on the seventeenth, by a later mail, sent by the Metropolitan to Slater, it does not appear to whom. It reached Slater late on the seventeenth or on the eighteenth and was on the latter date presented for payment to the assignee of the Savings Bank, that bank having closed its doors finally at the end of business hours (5 o’clock) on Saturday the fifteenth.

*431Defendant had customarily collected plaintiffs’ checks by placing them in the German American Bank at St. Joseph, and that bank would transmit to the Metropolitan at Kansas City, and the latter would transmit to the Citizens’ Stock Bank at Slater (the only other bank there) for presentment and collection. The reason the Metropolitan did not send to the Citizens’ Stock Bank in this instance was that it suspicioned the solvency of that bank and it in fact did cease to do business on the same day with the Savings Bank. Slater is a town of about three thousand inhabitants and it is conceded that it had an express office doing business therein.

From the foregoing facts it is clear that the German American Bank at St. Joseph and the Metropolitan National Bank at Kansas City, each in turn, became the agents of defendant in the process of collection. Bank v. Bank, 71 Mo. App. 451; Daly v. Bank, 56 Mo. 94. If, therefore, the check was not paid through the negligence or lack of diligence of either of these banks, the loss should fall on defendant, since it was occasioned by the neglect of its agent.

It being the usual course, it was the duty of the bank at St. Joseph to promptly transmit to the bank at Kansas City which it did. It being the usual course, it was also the duty of the Metropolitan at Kansas City to diligently transmit to Slater for presentment and collection, and the decisive question in the case is whether it did fill the measure of its duty. If it did not, the loss, as just stated, is defendant’s loss.

Instead of sending the check direct to Slater it sent it first to Wood & Huston at Marshall, a city twelve miles distant from that town. This, in the absence of directions to send a special messenger to Slater, involved at least one day’s delay, in this case a fatal delay, for the check was received at Marshall, on the morning’ of the fifteenth, the day the Savings Bank quit business at the close of business hours. If the check had been sent to Slater direct, it being on a railway line just beyond Marshall, it would have reached there nearly *432as earlyas it didMarsball, and the-remainder of that day would have remained for presentment and payment. The ease concedes that the Metropolitan had theretofore sentchecks received from the St. Joseph bank direct to Slater. But in this instance, as we have stated, its reason for not following the usual custom was that it had a well grounded suspicion of the solvency of the Citizens’ Stock Bank, its correspondent at Slater.

That may have been reason enough for not sending to that bank, but it was no excuse for not sending to some other person or institution at that town with directions to collect. It was shown that there was an express office there and doubtless in a town of that size more than one collecting agent. We, therefore, hold that the Metropolitan Bank was negligent in sending the check to Marshall instead of direct to Slater.

But defendant seeks to avoid the error of the Metropolitan Bank in sending the check to Marshall instead of Slater by the contention that it did not result in any more delay than the law permitted. The argument is based on the law that the holder of a check drawn on a bank at a distant place may place it in a bank for collection and that such bank, if it has no correspondent in the place where the check is payable, may on the day of receiving it or on the next day, transmit it to a correspondent at some other place, who in turn can wait until the next day after receiving to transmit to a correspondent at some other place, if it have none at the place where the check is payable, and so on, until it reaches a bank which has a correspondent at the place of payment; provided the route of transmission is not unreasonably circuitous;

It is contended that under this law the German Bank at St. Joseph which received and mailed the check to the Metropolitan on the thirteenth of December could have waited until the fourteenth to forward it to the Metropolitan at Kansas City. That the latter would then have received the check on the fifteenth and could have waited until the next secular day, which was Monday, the seventeenth, to forward to Slater, *433and that the correspondent at Slater could .have waited until the next day, the eighteenth, to demand payment which would have been two secular days after the bank closed its doors, too late for payment, and consequently plaintiffs were not harmed. That line of argument is tantamount to this proposition : That if there should be three banks connected with the transmission, the first and second transmitting the day of receipt and not waiting until the next day, as they might have legally done, the third could wait three days after receipt for presentation, since that would be no more time than would have elapsed had each of the other banks taken the full limit of time to act. We think that that is not a correct view. In such case it is not what might have been, but what was. In this case, conceding that the German American Bank at St. Joseph might have retained the check until the day after its receipt before sending to the Metropolitan, it.did not do so, and the latter’s diligence must be judged by its own action, after receipt of the check, without regard to the action of the German American at St. Joseph. Bank v. Bank (Civil App. Texas January 29, 1896), 34 S. W. Rep, 458. It received the check on the fourteenth and mailed it the same day to its correspondent at Marshall instead of sending direct to Slater as it had customarily done. If it had sent to Slater it would have been received there several hours before the payer bank quit business. It elected to transmit the cheek the day of its receipt but negligently sent it to an improper place. Having committed this act of negligence it will not be permitted to speculate on the possibility of its not being presented if it had been sent to the proper place. Bank v. Bank, 71 Mo. App. 458; Bank v. Bank (Civil App. Texas, January 29, 1896), supra. In order to exonerate the Metropolitan it should appear that if it had sent the check to Slater, instead of sending it to Marshall, it still would not have been presented in time for payment and been paid before the closing at five o’clock on the evening of the fifteenth of December. Whether a *434collecting agent for the Metropolitan, as a person of ordinary prudence, would have presented it after its receipt on the ■fifteenth before the bank closed or waited until the following Monday is a question of fact to be determined by testimony and circumstances.

In this connection it may be of. service at another trial to state that while generally an agent receiving a check on a local bank for collection may delay presenting it until the next day, yet if he knew the bank upon which it was drawn was in failing condition and likely to close business at any time, it would be his duty to proceed at once to present the check for payment, and not wait the time the law would ordinarily allow for presentation.

We have been cited to Bank v. Bank, 80 Md. 481, as giving a general support to defendant’s contention. That case properly states the general law that though a bank may be guilty of negligence or lack of diligence in sending a draft for presentment and collection, yet if no injury results to the other party no liability is incurred. As if proper diligence had been used the check still would not have been paid. In stating that lack of diligence alone is not sufficient to fasten a liability, but that it must be the cause of an injury that court only stated what has been declared to be the law in this state. Morrison v. McCartney, 30 Mo. 183. But whether the Maryland court made proper application of the law declared to the facts of that case we need not inquire.

The case can be relieved of some of the questions with which, as we judge by the briefs, it was burdened at the trial.

The drawer of a check is not in many respects governed by the law applicable to the endorser of a negotiable promissory note. To discharge the drawer of a check there must be an actual injury result from the neglect of the payee or his agent. Morrison v. McCartney, 30 Mo. 183; Selby v. McCullough, 26 Mo. App. 66. So, it being shown that these *435plaintiffs customarily sent checks to defendant and that it placed them in bank at St. Joseph which transmitted to bank at Kansas City which transmitted to correspondent at place of payment, defendant had a right'to so treat the check in controversy. Taylor v. Sip., 30 N. J. L. 284.

In this case it is-admitted that the drawee bank is under assignment and hopelessly insolvent, and the case shows the check is worthless. In such state of case it is not necessary that the check should be returned to the drawers. Nor does its not being returned indicate an intention on the part of defendant to appropriate it as payment in fact of the debt.

The judgment will be reversed and the cause remanded.

All concur.