Page images
PDF
EPUB

57486

Copyright, 1888,
BY JOHN T. MORSE, JR.

UNIVERSITY PRESS:
JOHN WILSON AND SON, CAMBRIDGE.

$ 420.

§ 421.

§ 421 i.

CHAPTER XXXI.

PRESENTMENT OF CHECKS FOR PAYMENT.

ANALYSIS.

NOTICE OF DISHONOR, § 428. See a condensed statement of the gen eral law of presentment, §§ 258, 259.

A. PERIOD OF PRESENTMENT.

§ 421 a.

§ 423.

§ 424.

B.

§ 421.

§ 421 d.

The fundamental rule is, that presentment must be made within a reasonable time under all the circumstances.

In the absence of agreement or special circumstances, usage, now recognized as law, has fixed the rule that presentment must be made within banking hours of the first business day Standard following the delivery of the check, if the bank is in period. the place where the payee lives or does business; if not in the same place, then the check must be forwarded for collection upon the business day following the day of receiving the check. If a check is received on Sunday, or other non-secular day, then the business day following is considered the day of receipt. SPECIAL CIRCUMSTANCES

(1) Hastening.

(a) If the payee knows that the drawee bank is in a failing
condition, it is his duty to present as soon as, by ordinary
diligence, is possible, and not to wait till the next day.
(b) An agent for collection must present the check the same
day it is received, not in order to hold the drawer of the
check, but to hold the indorsers, &c. on the paper col-
lected. See § 428.

(2) Excusing delay.

Infrequent mail.

Draft intended to circulate.

Distance from bank.

Clearing-house usages, and a usage of merchants to do business with reference to the clearing-house.

HOLDER v. DRAWER.

In order to hold the drawer absolutely, presentment must be made
within the period set forth in A above, unless circumstances
dispense with demand altogether; and it makes no difference
through how many hands the check may go, the presentment
must be made within this period in order to hold the drawer,
whether it be made by the first or the hundredth holder.
But delay in presentment will only discharge the drawer so far as
he is actually damaged by it.

[blocks in formation]

At some time before suit against the drawer presentment must be made, unless dispensed with.

Circumstances dispensing with presentment altogether before suit.

(1) Agreement to waive formalities, express, or implied from conduct or words.

(2) Part payment by drawer before or after check is due.

(3) Bank's insolvency, or stoppage, or an injunction upon it.
(4) If drawer had no funds. § 421.

(5) When check is given as evidence of loan.

The first presentment for payment will be a discharge of the drawer,
if the bank offers to pay and the holder refuses; but presentment
for inquiry as to signature merely will not have this effect.
HOLDER v. INDORSER.

As between each indorser and subsequent parties, the same period for
presentment is allowed, measured from the contract of indorsement,
but with the difference that unexcused failure to present within the
standard time absolutely discharges the indorser, whether he is in-
jured by the delay or not (Massachusetts, however, holding that
an indorser, like the drawer, is bound if not prejudiced by delay).

§ 427. D. PRESENTMENT BY MAIL.

Business

§ 421. Period of Presentment. Holder v. Drawer. In the absence of agreement or special circumstances it is the right of the drawer of a check to expect it to be presented hours of day for payment at latest within banking hours on the following receipt. day following the day of its delivery to the payee, if the bank on which it is drawn be in the same place where the payee lives or does business; if the bank be not in such place, then the check must, within the same time, be put in due course for presentment, either by being sent by mail to the drawee, or by being deposited for collection with a banker, according to the ordinary custom of such business in that place.1 But the holder does not gain an extra day for presentment by depositing the

1 § 421. Simpson v. Pacific Mutual Life Ins. Co., 44 Cal. 139; Cromwell v. Lovett, 1 Hall, (N. Y.) 56; Veazie Bank v. Winn, 40 Me. 62; Boddington ». Schlencher, 1 Nev. & M. 540; s. c. 4 B. & Ad. 752; Moule v. Brown, 4 Bing. N. C. 266; Smith v. Janes, 20 Wend. 192; O'Brien v. Smith, 1 Black, 99; Smith v. Miller, 43 N. Y. 171, 176; Taylor v. Sip, 1 Vroom, 284; Ritchie v. Bradshaw, 5 Cal. 228; Bickford v. First National Bank of Chicago, 42 Ill. 238; Strong v. King, 35 Ill. 9; Wear v. Lee, 87 Mo. 358; Cawein v. Browinski, 6 Bush, 457; Himmelmann v. Hotaling, 40 Cal. 111; Schoolfield v. Moon, 9 Heisk. 171; Kelty v. Second National Bank, 52 Barb. 328; Syracuse, Bing, & N. Y. R. Co. v. Collins, 57 N. Y. 641.

check in his bank for collection. If the payee of the check receive it on Monday and deposit it in his bank, presentment must still be made in the same place, or the check forwarded to any other place where the drawee bank is, by the payee's bank (as by himself) during banking hours on Tuesday.2

An agent check must present the if possible

taking a

same day,

by reasona

ble diligence.

(a) When a check is taken instead of money by one acting for others, a delay of presentment for a day, or for any time beyond that within which by reasonable diligence it can be presented, is at the peril of the party so retaining the check, as between him and the true owners and parties in interest represented by him. Thus where the payee of a draft took from the drawees their check for the amount, which during banking hours on that day would have been honored, but which was retained by the payee until the day following, when it was dishonored, it was held that the payee could not have any remedy against the drawer. As between the payee and the drawee the presentment of the check had been made with due promptitude; but as between the payee and the drawer there had been laches by reason of the payee not having presented the check and reduced it to money on the same day on which he received it. The payee had in fact, so far as the drawer was concerned, given to the drawees an extension of credit for one day, and the payment had been lost directly in consequence of such unauthorized extension. (See § 428.)

Reasonable

tion of fact

time a ques

(b) 1. All drafts foreign or inland must be presented to the drawee within a reasonable time, and in case of nonpayment prompt notice must be given to the drawer and indorsers. What is a reasonable time depends on the circumstances of each case, and is sometimes in each case. a very difficult question. The relations of the parties, the time, mode, and place of receiving the check, must be considered, and whether the check is post-dated or not.

2 Alexander v. Burchfield, 1 Carr. & M. 75; s. c. 7 Man. & Gr. 1061. 3 Smith v. Miller, 43 N. Y. 171; Chouteau v. Rowse, 56 Mo. 65. Montelius v. Charles, 76 Ill. 303; Stevens v. Park, 73 Ill. 387; Mohawk Bank v. Broderick, 10 Wend. 307; Allen v. Kramer, 2 Brad. 209. 'Woodruff v. Plant, 41 Conn. 344.

Period of

drawer's absolute

liability.

6

(e) 2. The drawer cannot (except by agreement or under special circumstances as above) be held absolutely beyond the business hours of the day following his delivery of the check, if the bank is in the same place, or if the bank is an another place, the period of his liability will be until the close of business hours on the first secular day following the receipt of the check by some one in the bank's locus, the check having been mailed upon the day following its delivery by the drawer. This period of absolute liability cannot be extended by circulating the paper; the tenth holder cannot hold the drawer unless he presents within this period measured from the delivery by the drawer, and not from his own receipt of the check, any more than the first holder.

(d) But failure to present within this period does not release the drawer entirely, but only so far as damaged.8 The drawer Though the drawer has the right to expect presentis discharged by delay ment for payment to be made within the period only so far aforesaid, yet his obligations will be affected by a as damaged breach of this duty only under peculiar circumThe check which he delivers is only a means whereby

by it.

See Collection, § 213, and cases below.

7 Werk v. Mad River Valley Branch Bank, 8 Ohio St. 301; Bickerdike v. Bollman, 1 Term, 405.

8 Syracuse, Bing., & N. Y. R. Co. v. Collins, 3 Lans. 32; 57 N. Y. 641; Scott v. Meeker, 20 Hun, 161; Beeching v. Gower, 1 Holt, 313; Church v. Farnham, 1 Sheld. 393; Woodin v. Frazee, 38 N. Y. Super. Court, 190; Warrensburg Co-operative Building Association v. Zoll, 83 Mo. 94; Cogswell v. Rockingham Ten Cents Savings Bank, 59 N. H. 43.

Where the bank suspended payment on the day following delivery of the check, the holder recovered from the drawer, though the check was not presented until nearly five months after date. Morrison v. McCartney, 30 Mo. 183.

No negligence of holder is a defence if the drawee made no provision to meet the check or has withdrawn his funds. Linville . Welch, 29 Mo. 203; Adams v. Darby, 28 Mo. 162; Moody v. Mack, 43 Mo. 210.

The burden is on the holder to show that the drawer has suffered no loss by the delay. Little v. Phoenix Bank, 2 Hill, 425. See Stevens v. Park, 73 Ill. 387; Griffin v. Riblet, 6 N. Y. Leg. Obs. 421; Gregg v. George, 16 Kans. 546; Mordis v. Kennedy, 23 Kans. 408; Jones v. Heiliger, 36 Wisc. 149 (1874); Henshaw v. Root, 60 Ind. 220 (1877); Griffin v. Kemp, 46 Ind. 172.

« PreviousContinue »