Case ID: mass_3/html/0063-01.html
Source: Caselaw Access Project
Author: {"author": "Parsons, C. J.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

* The President and Directors of the Union Bank versus the President, Directors and Company of the Bank of the United States.
    If A. confiding, though improperly, in the mistaken affirmation of B., pay mm money, A. shall recover it back in an action for money had and received.
    This was an action for money had and received, which the parties submitted to the opinion of the Court, upon the following facts.
    It has been the custom of the Branch of the United States Bank in Boston, to receive payment for checks on other banks in Boston, in the following manner:—There are two correct lists of each kind of checks made out, one of which remains in the Branch Bank, and the other is carried with the checks to the other banks by the messenger of the Branch Bank; in return for which he receives of the tellers of the several banks checks on the Branch Bank, sufficient for payment, without knowing whether the checks so received are good or not; these'checks are immediately compared with the list that accompanies them, by the teller of the Branch Bank, and then delivered to the book-keepers for examination, to see if they are good; and if they are found not good, they are immediately returned, and always have been received without hesitation.
    On Monday, August 5, 1805, the proceeds of the exchanges of the several banks in Boston were brought to the counter of the Branch Bank at the same time, by the hands of the Branch Bank , messengers, in several parcels. In one of the parcels thus brought, were two checks drawn by Stephen Bawson on the Branch Bank, for 550, and 300 dollars, which were instantly pronounced to be bad, and sent to the Union Bank, from which they were supposed to have been received, though in fact they were brought from the Boston Bank. The teller of the Union Bank received them, presuming that they had been sent from that bank, and sent their amount in money. On Tuesday, the 6th, they were again sent by the Union Bank to the Branch Bank, in part of the payment of that day, and were returned and paid for, as before. On Wednesday, the 7th, Bawson, the drawer of- the checks, was known to [ *75 ] have * failed. On Thursday, the 8th, the teller of the Union Bank first discovered that, these checks had been originally sent on Monday, from the Boston Bank, of which he immediately gave information to the Branch Bank.
    On Sunday, August 4th, Bawson embarked in a vessel for Gibraltar, and sailed the next morning, for the purpose of avoiding his creditors. But his absconding was not generally known until the Wednesday following, on which day the property in his store in Boston was attached by his creditors: which- property exceeded in value the amount of the said checks.
    If upon these facts it should be the opinion of the Court that the plaintiffs have a right to recover of the defendants the amount of the said checks, judgment to be entered for 850 dollars ; if otherwise, the defendants to recover their costs.
    
      Gray, for the plaintiffs,
    contended that they should recover on the common principle, that money paid by mistake was recoverable by this form of action. The plaintiffs paid this money under a mistaken apprehension that the checks had been sent from their bank; and to make their case still stronger, he observed that the mistake was occasioned by an untrue averment on the part of the defendants. The rule of pleading, that he who commits the first fault shall be the sufferer, applies equally well to the common transactions between man and man. Here the defendants unquestionably made the first mistake, and in doing so, occasioned all the subsequent errors and misfortune . It was their duty to have ascertained from whom they had received the checks, and to have returned them accordingly. As accuracy is very essential in all bank transactions, and as these transactions are intimately connected with commerce in general, the Court will not countenance this gross negligence of the defendants, by throwing the loss, which has arisen out of it, on innocent persons.
    
      Otis, for the defendants,
    objected to this demand, that the plaintiffs had been guilty of gross negligence in keeping the checks by them so long. It was unreasonable to charge the * defendants with this money now, whereas, if they had [ *76 ] immediately ascertained, as they might and ought to have done, that the checks had not been sent by them, they would have been carried to the Boston Bank in season to have had their amount secured from Rawson, whose property it appears was subject to attachment for two days after the first error took place. But by retaining them as they did, they had deprived the defendants of their remedy against the Boston Bank, and against the drawer .
    
      
       2 Wils. 100.—Palmer vs. Stone & Al., 1 Mass. Rep 468.—Ilsley vs. Knight Peake's N. P. 94.—Robinson vs. Anderton.
      
    
    
      
       2 Wils. 353. Chamberlyn vs Delarive.
      
    
   The opinion of the Court was delivered by

Parsons, C. J.

It appears from the case that on the 5th day of August, 1805, the Union Bank, being indebted to the Branch Bank paid their debt to the messenger of the Branch Bank, who had sen him to the Union Bank to receive it. On the return of the messenger to the Branch Bank with the payment he had received, the officers of that bank supposing, by mistake, that the two checks drawn by Rawson were received in payment from the Union Bank, and those checks being bad, they sent them to the Union Bank, who, crediting the affirmation of the Branch Bank, received the checks, and paid the Branch Bank for them. This payment was made by mistake; and the Union Bank may well maintain an action to recover back the money, unless they have lost their right of action by their own loches, in not seasonably detecting the mistake, or in not collecting the money due from Rawson on those checks.

In considering the facts in the case, it appears that the messenger was the servant of the Branch Bank only, and that if he committed any error in his returns of payment from the several banks, the Union Bank is not responsible for those errors. Whatever delay there was m that bank, in not collecting the checks, arose from their confiding in the mistaken affirmation of the Branch Bank ; and although this confidence might be improper, yet the Branch Bank, whose affirmation was the occasion of it, cannot take any advantage of it, they committing the first fault.

Let judgment be entered for the plaintiffs, according to the agreement of the parties . 
      
      
        [Milnes vs. Duncan, 6 B. & C. 671.—9 D. & R. 731.—Wilkinson vs. Johnston, 5 D. & R. 403.—3 B. & C. 429.—Cox vs. Prentice, 3 M. & S. 344.—Gomery vs. Bond, 3 M. & S. 378.—Shaw vs. Picton, 7 D. & R. 201.—4 B. & C. 715.—Skyring vs. Greenwood, 6 D & R. 401.—4 B. & C. 281.—1 Car. & P. 517.—Ed.]