Case Name: Planters Bank v. H. C. Merritt, Adm'r, et als.
Court: Tennessee Supreme Court
Jurisdiction: Tennessee
Decision Date: 1872-01-06
Citations: 7 Heisk. 177
Docket Number: 
Parties: Planters Bank v. H. C. Merritt, Adm’r, et als.
Judges: 
Reporter: Tennessee Reports
Volume: 54
Pages: 177–199

Head Matter:
Planters Bank v. H. C. Merritt, Adm’r, et als.
1. Bank Checks. Presentment. Cheeks fall within the definition of hills of exchange, and it is difficult to indicate with precision their differential feature; but they are recognized as a distinct species, and a less degree of diligence is required of the holder of a check than of an ordinary bill of exchange, to charge the drawer. The drawer of a check is not discharged by any delay of the holder to present it, unless he has been injured thereby; as by the failure of the drawer, change in the state of accounts, etc.
2. Same. Presumptions. A check is presumed to be drawn against actual funds, and if the holder is negligent in presenting it, the burden is upon him to show that the drawer has not been injured by the delay. But if he show that the drawer has himself drawn out the funds against which the check was drawn, or that the drawee was solvent when the cheek was presented, then the burden is shifted upon the drawer, to show that he has sustained damage.
3. Estoppel. In 1862, defendant’s intestate received from the Planters’ Bank its check upon the Union Bank of Louisiana, which was not presented until 1864, when it was dishonored. In October, 1863, the Planters’ Bank drew for its balance upon the Union Bank, and the draft being dishonored, in Dec., 1863, the former bank sued for the amount due on its books from the latter, and afterwards amended its declaration so as to embrace the amount of the check in question, among others, which had been credited to the Union Bank when drawn, but had not been paid. Held, that this was a distinct recognition by the Planters’ Bank of these checks as subsisting claims upon the deposit sued for by it.
4. Agency. A principal cannot set up his agent’s unfaithfulness, to avoid responsibility.
5. Check. Dictan. The holder of a check has no right of action against the drawee refusing to pay it. Citing 2 Par. on if. & B., 60-1; 10 Wal., 152.
FROM MONTGOMERY.
From the Circuit Court, May Term, 1871. Thos. W. King, J.
Thomas H. Malone for plaintiff.
Want of due presentment, etc., was fatal to the instrument in suit.
Even bank checks seem to fall within the letter of Code, ss. 1959-61.
Sec. 1959: “When any person by order in writing, signed by his proper hand, directs the payment of any money in the hands or possession of another person, to any person whatsoever, said money shall by virtue thereof be due,” etc.
Sec. 1961: “But no holder of such order shall prosecute any suit against the drawer, for the money therein specified, before the order shall have been first protested,” etc.
Sec. 50 provides that the word “person” in the Code shall include “corporation.”
If the reasoning of Harwell v. McOulloch, 2 Tenn., 275; Porter v. Dillahunty, 8 Hum., 570; Oooh v. Beech, 10 Hum., 412, etc., seems to tell against the application of these provisions to bank checks, or to the instrument in suit, these cases were before the Code, and the point not passed upon in either of .them.
Same strictness as to presentment, etc., required in cases of money orders as of bills: Porter v. Dillahunty, 8 Hum., 570.
If these provisions do not apply, then we have to inquire whether this is a bill of exchange proper or a bank check. Unless the latter, no question whatever but that want of due presentment was fatal.
Byles on Bills, side p. 10: “A check on a banker is in legal effect an inland bill of exchange drawn on a banker, payable to bearer, on demand.”
2 Par. N. & B., 57: “A check is a brief draft or order on a bank or banking house directing it to pay. a certain sum of money.”
Story on Prom. Notes, s. 487: “A check is a written order or request addressed to a bank, or to persons carrying on the business of bankers, requesting them to pay on presentment to another person, or to him or bearer, or to him or order, a certain sum of money specified in the instrument.”
Definition of Parsons obviously too broad. That of Byles excludes the instrument in suit, which is drawn payable “to the order of Thomas W. Wisdom.” That of Story adjudged faulty by himself, in ex parte Brown, 2 Story’s R., 502, where order dated April 18, 1841, payable May 18, 1841 (not “on presentment”), held to be a check.
In Andrew v. Blaehby, 11 Ohio St., 89, similar instrument, payable on day fixed, said to be only prima fade a bill of exchange.
In ex parte Brown, Judge Story said: “The characteristics of checks as contradistinguished from bills of exchange are, as it seems to me, that they are always drawn upon a bank or banker; that they are payable immediately on presentment (that in question was payable a month after date) without the allowance of any days of grace; and that they are never presentable for acceptance, but only for payment.” But said Johnson, J., in Bowen v. Newell, 4 Seld., 190: “Of all these characteristics, the only one that can serve any purpose in determining whether a particular instrument is a cheek or a bill of exchange, is that .it is drawn upon a bank or banker. The others may or may not be legal qualities which belong to checks after they are ascertained to be checks, but. do not aid in determining their character.”
In Morrison v. Bailey, 5 Ohio St., 13; Bowen v. Newell, 4 Seld., 190; and Brown v. Lusk, 4 Yerg., 210; orders drawn on banks, and similar to that pronounced a check in ex parte Brown, held to be bills entitled to grace.
So the being drawn on a bank will, not do for a criterion, nor the being payable on demand. For we see that bills may be drawn upon banks, and that checks may be payable on a day fixed.
The English cases uniformly hold orders on banks, if payable on a day fixed, bills; and if on demand,' checks. But the English cases rest on the stamp act, 55 George III.
Sometimes the being drawn against funds is mentioned as a criterion; but bills also may be drawn against funds, and indeed the very theory of a bill of ex change supposes an exchange of funds at points distant from each other, whence the name bill of exchange.
And of course bills may be drawn payable on demand, and then no need of presentment except for payment. And when no time for payment is specified, they are payable on demand like checks: 3 Kent, side p. 74; 1 Par. N. & B., 381, 532, 543, 548.
Checks are, no more than bills, an appropriation of the funds drawn against. In neither case can the payee sue the drawee: 2 Par. N. & B., 61, note.
Good morals require drawers of bills and checks alike not to withdraw funds drawn upon, and the same legal consequences attach in either case to such withdrawal, — dispensing with demand and notice: Rhett v. Roe, 2 How., 457; 1 Par. N. & B.,' 548.
The truth is, whether a bill or a check, frequently requires reference dehors the paper to extrinsic circumstances.
In ex parte Brown, Judge Story attached much importance to the fact that “ both parties intended throughout that they (the instruments involved) should be treated as checks.” Here we have seen he was moved to declare an instrument payable a month after date a check, in. the teeth of his own definition, postulating payment on demand. And in 11 O. S., 89, the court said that an order on a bank payable on a day fixed was only prima facie a bill, i. e. might be shown extrinsically to be a check — suggesting (p. 94) that the instrument should be “viewed in the light of the circumstances u/nder which it was given, and of the purpose it was designed to accomplish
Apply this test to present case. ’ Here the instrument drawn at Clarksville on bank at New Orleans, in which the drawer bank kept funds for purpose of dealing in exchange, and obvious that purpose of drafts was not to obtain a present payment, but precisely that for which bills of exchange said to have been originally invented — to remove funds from one point to another distant point, without actual carriage, with attendant risks. Federal troops were approaching Clarksville, and bank there notified customers to withdraw deposits, and payee of this instrument, instead of receiving payment, preferred to exchange his funds in Clarksville for equivalent funds in remote city regarded as firmly within Confederate lines, for which purpose a bill of exchange was strictly appropriate means.
Form of instrument received, while not conclusive, yet of itself significant of what is extrinsically shown to be its character:
$2,500. Plantees’ Bank oe Tennessee,
Office at Clarksville, Feb. 15, 1862.
Pay to the order of Thomas W. Wisdom twenty-five hundred dollars. W. P. Hume, Cashier.
To the Cashier of the
Union Bank of Louisiana, New Orleans.
Across face is printed in large characters “Original,” showing that was drawn in sets’. Complection of the paper, manner of address, being payable to order (a strong circumstance according to 11 O. S., 89), being drawn in sets, and drawee bank being many hundred miles away, in different sovereignty, hostile to the jurisdiction under which the drawer was about to pass, all combine to shed strong light on nature of instrument, in which clearly revealed as bill of exchange.
Instrument being a bill, is a foreign bill: Gardner v. Bank of Tennessee, 1 Swan, 420; 1 Par. N. & B., 642, and authorities cited. As such, must have been protested to bind drawer, without regard to tbe question of loss to him: Garter v. Union Bank, 7 Hum., 548; 1 Par. N. & B., 266; Byles on Bills, side pp. 230-1, note A.
As to the question of waiver by acts after maturity, see Swan v. Hedges, 3 Head, 251, and authorities cited; Otsego Bank v. Warren, 18 Bar., 290; 1 Par. N. & B., 594, and notes.
Jambs E. Bailey for defendants:
The instrument sued on is a bank check. It was drawn against funds, and was an appropriation of them, but the holder could not maintain any action against the drawee refusing to accept or pay: 2 Par. on N. & B., 57, 59, 60 and 61; 10 Wall., 152.
The holder of a check is ordinarily bound to present it for payment as if it were a bill payable on demand; but if the drawer has not been injured by the delay he is not discharged: 2 Par. on N. & B. 57, note c; Id., 71, 74, and notes; 2 Story’s R., 512, 513.
Before the suit was brought the Union Bank had refused to pay this and other checks of the Planters’ Bank; it had also refused to pay the balance claimed from it by the Planters’ Bank. This bank brought suit for this balance, and in 1868 amended its declaration so as to include these checks in the amount sued for. This was a waiver of the necessity of demand and notice. The requirement of demand and notice is not part of the contract, but a step in the legal remedy which may be waived at any time: 19 Penn., 396; 1 Par. on N. & B., 584, note i.
The eases in regard to promises to pay after default as to demand or notice, involve questions of evidence and questions of waiver. If the drawer or indorser admit his liability, the law, as a matter of evidence, presumes due presentment and notice; but this is a disputable presumption, and if it appear that demand was not made, or notice not given, a promise to pay includes a Avaiver: Story on Prom. Notes, 358, 359; Chitty on Bills, 501.
Any act of the draAver calculated to put the holder off his guard, or his stopping the payment, is a waiver of demand and notice: 1 Par. on N. & B., 581, 584.
So is the want, or the withdrawal, of funds: 2 Par. on N. & B., 71; Story on Prom. Notes, 498.
The same rules do not govern checks and ordinary bills in this regard: 6 Wend., 443; 2 Story, supra.
The drawer of a check is the principal debtor; the drawer of a bill may be a security. Checks are drawn against funds deposited, and the drawing is an appropriation, as between the drawer and drawee, of so much of the fund: 2 Par. on N. & B., 73, note h. A check is acknowledgment of a sum due: 2 Story’s B,., 502.
Want of presentment of a check will not avail the drawer unless he was injured thereby: Id.
The drawer impliedly engages to have at all times in the hands of the drawee enough funds to pay the amount: Id. 516.
True, there is a presumption of injury to the drawer when the check is not presented, but this is not absolute: 2 Par. on N. & B.., 71, note c.
In 1863 the Union Bank refused to pay the balance due the Planters’ Bank, for the same reason it refused to pay the check in question, — because the funds to the credit of the latter bank had been seized by the Federal authorities. The Planters’ Bank sued the same year to recover its balance. It alone had the right to sue the Union Bank. Unless the check holder may recover from the Planters’ Bank, he is without remedy, for he cannot sue the drawee. Thus the Planters’ Bank having received value for the check, will also receive and retain the very fund covered and appropriated by the check.
The Planters’ Bank has not been injured by the holder’s default in making presentment, and cannot resist his claim.
Anonymous brief for plaintiff.

Opinion:
Nicholson, C. J.,
delivered the opinion of the Court.
On the 2d of May, 1865, Thomas W. Wisdom, commenced his action in the Circuit Court of Montgomery county, against the Planters' Bank, claiming damages to the amount of $5,000. The declaration filed at the May Term, 1865, contained several counts, two on a bank check in the following words:
$2,500. Plantees' Bank oe Tennessee.
Office at Clarksville, February 15th, 1862. Pay to the order of Thomas W. Wisdom, Twenty-five Hundred Dollars. W. P. Hume, . Cashier.
To the Cashier of the
Union Bank of Louisiana, New Orleans.
Two other counts were for money deposited, and for money had and received, etc.
Defendant filed several pleas, putting in issue its liability on any and every ground.
At the May Term, 1871, of the court, the cause was tried by the presiding Judge, upon the facts as well as the law, the parties agreeing to dispense with a jury. The Judge rendered judgment against the bank for $3,572.90, it being the amount of the cheek, with interest from the 29th of March, 1864, the date of the presentation of the check for payment. From this judgment the bank has appealed in error to this court. The facts developed on the trial, as far as they are important to be noticed, are as follows:
On the 15th day of February, 1862, Thomas "W". "Wisdom had a deposit, in the Planters' Bank at Clarks-ville, amounting to $2,500. In anticipation of the fall of Fort Donelson and the occupation of Clarks-ville by the Federal military forces, the cashier of the bank had notified the depositors to come forward and withdraw their deposits. Accordingly, on that day Wisdom came forward,' and preferring exchange on New Orleans to Confederate treasury notes, the cashier gave to him the check sued on, at the same time balancing his account as a depositor, and crediting the amount to the Union Bank of Louisiana. At the date of the check, the Planters' Bank had a deposit to its' credit in the Union Bank of Louisiana, amounting to about $337,000. The check was not presented for payment at the Union Bank until the 29th of March, 1864, when payment was refused, because "the amount which was to the credit of the office of the Planters' Bank of Tennessee, Clarksville, was seized by Major-General Banks, and by his order paid over, ,10th of September, 1863, to A. Q,. M. Captain John McClure, U. S. A." The amount so paid over was in Confederate treasury notes. In October, 1863, the Planters' Bank drew checks on the Union Bank of Louisiana, for the balance then due it as shown by the books of the Planters' Bank.
The Union Bank refused to pay, upon the ground that it had been compelled to pay the amount due the Planters' Bank to the Federal military authorities. The Union Bank did not claim that the amount due the Planters' Bank was in Confederate treasury notes until the Federal authorities demanded the money belonging to the Planters' Bank and branches. Down to that time, the Union Bank had honored and paid all checks drawn by the Planters' Bank, among them. several drawn on the 15th of February, 1862, the same day on which the check of Wisdom was drawn, and it is shown that if Wisdom's check had been presented prior to September 10, 1863, it would have been paid.
In December, 1863, the Planters' Bank sued the Union Bank of Louisiana in New Orleans, for $86,-657, that being the balance due, as appeared on the Planters' Bank books. The declaration was afterwards amended so as to embrace the whole amount due as shown by the books of the Union Bank, leaving out the amount for which there were outstanding checks on the Union Bank.' And in February, 1868, the Planters' Bank again amended its declaration, so as to embrace the outstanding checks, for the benefit of the holders thereof. These outstanding checks amounted, to $11,000.
This was done without any knowledge or consent of the holders of the checks, of whom Wisdom was one. Upon the trial of the suit the Planters' Bank recovered a judgment against the Union Bank for $125,000. On a motion for a new trial, the same was granted, on condition that the Union Bank would pay the amount of $26,752, admitted on the trial to be due. This amount, with interest, making $31,391, was paid in July, 1868, and a new trial granted. On the next trial, at January Term, 1871, the Planters' Bank recovered a judgment for $26,773, from which judgment the Planters' Bank appealed to the Supreme Court of the United States, where the suit is now pending.
The proof shows, that the Union Bank resisted the claim of the Planters' Bank upon the ground that the amount claimed was in Confederate treasury notes, and that the same was paid over, under military orders, to the Federal authorities. It appears, however, that on the trial of the suit, the Union Bank admitted its liability $26,752. It appears, also, that down to the time when the military authorities demanded the money, to-wit, September 10, 1863, the Union Bank had never claimed that the deposit of the Planters' Bank was in Confederate money, but had paid all checks drawn by the Planters' Bank, without claiming the right to pay them in Confederate money. It appears that of the $26,752 admitted by the Union Bank to be justly due on the trial, $10,331 was due the branch bank at Memphis, for collections, before the existence of Confederate money, and $16,421.61 was due the branch at Clarksville, for collections in other than Confederate notes. It further appears that the Union Bank had special instructions from the Planters' Bank as to' receiving Confederate notes, nor was such money collected and held on deposit for the Planters' Bank.
It is further in proof, that on the 2d of May, 1863, the Planters' Bank requested the Union Bank to invest the amount due it, in New York exchange, and to remit to the Manhattan Co. Bank at New York, to the credit 'of the Planters' Bank, to which request the Union Bank acceded, and in June and July, 1863, did so invest and remit about $27,000. It is shown that the Union Bank of Louisiana has been at all times, and is now, solvent and in good standing.
It is in evidence, that Clarksville was taken possession of by the Federal military authorities on the 20th of February, 1862, and New Orleans in April, 1862, both of which places continued under Federal authority during the war.
Mail communication between Clarksville and New Orleans was restored about June 18, 1862, but was interrupted in August, 1862, for a short time, and was then restored again.
Upon these facts several questions arise for our determination.
1. Was the presentation of the check on the 29th of March, 1864, sufficient to fix liability upon the drawer thereof?
2. If the check was not presented within the time required by law, can the holder make the drawer liable, by showing that he sustained no injury in consequence of the delay in making the presentation?
3. If the drawee continued solvent until the check was presented, has the drawer shown such injury in consequence of the delay of the holder in presenting the pheck, as will release the drawer from liability.
We will examine these questions in the order stated.
But before proceeding to this examination, it is proper for us to remark, that we "have carefully looked into the several authorities to which we have been referred, on the question, whether the instrument sued on is a bill of exchange or a bank check. Mr. Edwards, p. 56, says that bank checks are in substance bills of' exchange payable on demand. They are sometimes said to resemble bills of exchange; but they are in truth a species of bills. He says it is essential to a check eo nomine, that it be payable on demand. It is generally made payable to bearer, but its character is not changed by the fact that it is made payable to the order of the person to whom it is given. While therefore it is true that the instrument sued on falls within the general definition of a bill of exchange, it is also true, that it falls within that species of bills known in commercial nomenclature as bank checks. It may be, and probably is, impracticable to lay down any one unerring test by which a bank check may be distinguished from a bill exchange; yet it is certain that the authorities recognize such a distinctive species of commercial paper, and lay down the rules of law and commercial usage which have grown up and become authoritative in determining the rights and liabilities of the parties to these instruments: Syracuse R. R. Co. v. Collins, 3 Lansing, (N. Y.) 29; 10 Wah, 152. Upon looking to the circumstances under which the instrument under consideration was given, we can not doubt that it was intended by the cashier of the Planters' Bank as a convenient mode of transfering so much of its deposits in the Union Bank of Louisiana as would pay the debt due to the depositor. The cashier in his testimony speaks of it as a check, and not as a bill of exchange, and in like manner, the depositor who received it denominated it a check, thus showing that the parties themselves understood the instrument to be a bank check, and not a bill of exchange.
The instrument sued on falls within the general definition of a draft or bill of exchange. It is a written order or request by the Planters' Bank to the Union Bank for the payment of $2,500, absolutely and at all events. But as it is drawn upon a deposit in a bank, it falls directly within that class of bills of exchange known in the commercial world as checks. Mr. Parsons defines a check to be a brief draft or order on a bank or banking house directing it to pay a certain sum of money: 2 Par. N. &. B., 57.
Mr. Edwards says: "Although the current decisions in this State seem to warrant a distinction between check and a bill, in regard to the effect of omitting to present the same to the drawer within a reasonable time, it is very clear that the drawer of a check, as well as the drawer of any other bill or draft, is discharged, if in consequence of unreasonable delay in presenting' the check an injury or loss is sustained by him. It is also clear that in an action against the drawer of a check, the holder can not in general recover unless he shows that it has been presented for payment and dishonored, and that notice of non-payment has been properly given. But the holder of a negotiable check, in order to charge the drawer, has not been generally held responsible for the use of the same degree of diligence as the law requires of the holder of an ordinary bill of exchange. Unless the bank on which the check is drawn fails before it is presented for payment, the drawer lose nothing by the delay:" Edwards on Bills, etc., 376; Little v. Phenix Bank, 2 Hill R., 425, S. C.; 7 Hill R., 539; Harkee v. Anderson, 21 Wend. R., 372; Murry v. Judah, 6 Cowen R., 484; Morrison v. McCarty, 30 M; 9 Jones, 183.
Mr. Parsons says: "A check must be presented in a reasonable time, in order to charge the drawer or indorser in case of the failure of the drawer." He adds: "Where there is no presentment of the check, or no notice, there is of course a presumption of injury to the drawer; but the presumption is not absolute, and may be rebutted by proof that the check was not drawn against funds,' or that the funds were removed by the drawer before presentment." And again: "As between the holder and the drawer, it seems well settled, although not without some dissent, that the drawer is not discharged by any delay of presentment whatever, unless he can show that he has been injured thereby,. as by failure of the drawer, or change in the state of accounts or otherwise:" 2 Parsons on N. & B., 72, 74. In his work on Mercantile Law, p. 90, Mr. Parsons says, "nor can the drawer complain of any delay whatever in the presentment, for it is an absolute appropriation, as between the drawer and the holder, of so much money in the hands of the banker; then it may lie at the holder's pleasure. But delay is at the holder's risk, for if the bank fail after he could have got his money on the check, the loss is his."
Where the parties all reside in the same place, the check should be presented the same or the next day after it is received. If payable at a different place, it should be forwarded the same or the next day: Edwards on Bills and Notes, 378; (note.)
Ifc^ffollows from the several authorities referred to, that unless there are unavoidable obstacles preventing it, the holder of a check is guilty of negligence if he fails to present it, or forward it, on the same or the next day. If the presentment be not thus made, the presumption of injury from the negligence of the holder arises, and the onus of showing that no injury has resulted from the delay to the drawer, rests on the holder. If the holder succeeds in showing that no injury has resulted from the delay, then the presumption of law is rebutted, and the drawer is responsible. In the language of Mr. Edwards, p. 378, "the cheek is always presumed to be drawn on actual funds, and if the holder has been guilty of laches, in not presenting it in due time, it is incumbent upon him to show that the drawer has not been, injured by the delay, and if he shows that the drawer has himself drawn out the fund against which he drew the check, the burden of proving actual damage is shifted upon the drawer:" Conroy v. Warren, 3 John. Cas., 259.
To this we think it may be added as a sound rule, that when the holder has rebutted the presumption of injury arising from laches in presenting the check in due time, by showing that the drawee was solvent when the check was presented, then the burden of proving actual damages is shifted upon the drawer. In the case before us the check was drawn on the 15th day of February, 1862, and was not presented until the 29th of March, 1864. The proof shows that the check could have been earlier presented, and that other checks drawn at the same time were so presented. No unavoidable obstacle is shown to have prevented the holder from presenting his check, and therefore he was guilty of laches, from which the presumption of injury to the drawer arises.
It follows that the presentment of the check on the 29th of March, 1864, was not sufficient of itself to fix liability upon the drawer.
But the plaintiff has shown that the Union Bank continued to be solvent from the time the check was drawn in February, 1862, until it was presented in March, 1864, and has continued solvent to the present time.
This proof rebuts the presumption of injury arising from the laches of the holder, in failing to present the check in due time. This proof was sufficient to raise the presumption that the drawer sustained no injury from the delay, and must fix the liability upon him, unless he has shown actual damage in consequence of the delay. Mr. Story, in his work on Promisory Notes, 497, lays down the rule, that "when in the intermediate time between the. drawing of the check, and the presentment thereof for payment, there has been a change of circumstances materially affecting the rights and interests of the drawer, in respect to the bank or banker on whom the check is drawn; the check must have been presented in the reasonable time required by law, otherwise the drawer will be released."
This brings us to the real question on which the case must be determined.
Has the drawer shown that he sustained actual damage by the delay of the holder of the check in presenting it, or which is the same thing, has he shown a change of circumstances materially affecting the rights and interests of the drawer? It is shown by the plaintiff that when suit was brought against the Union Bank in December, 1863, the bank insisted that it had handed over all the deposit of the Planters' Bank to the Federal military authorities, and that all of this deposit was in Confederate money. But that on the first trial of the cause, the Union Bank ad mitted that of the whole deposit there was $26,652, which was not Confederate money, and for which the bank was responsible. It further appears by the proof of the Planters' Bank, that of this $26,752, upwards of $16,000 was derived from collections in funds other than Confederate money, for the branch of the Planters' Bank at Clarksville. It follows clearly, that when the holder of the check in suit presented it in March, 1864, for payment, the Union Bank then had on hand a deposit of $26,752, of which upwards of $16,000 belonged to the branch at Clarksville, which had given the check. Yet, the Union Bank refused to honor the check, upon the false reason that it had no funds belonging to the Planters' Bank, and that it had all been handed over in Confederate money to the military authorities. It is further shown by the evidence of the Planters' Bank, that this $26,752 has been paid over to that bank, and it still has a suit pending for the balance of the deposit.
The Union Bank is resisting payment on the ground that the balance of the deposit was in Confederate money, and the Planters' Bank proves in this case that none of it was Confederate money.
Do these facts, proven by the Planters' Bank, show that it sustained any injury by the delay of the holder of the check in presenting it for payment? It can not be said that the failure of the holder of the check to present it before the 10th of September, 1863, had any influence in inducing the military authorities to seize the deposit; nor did the failure to present the check produce any change in the circumstances affect ing the rights or interests of the Planters' Bank in regard to the Union Bank; nor did this failure to present superinduce any injury to the Planters' Bank, unless it was an injury to the bank to have to prosecute its suit for that much more than it would have done if the check had been presented and paid.
The proof does show, inferentially, that if • the check in suit here had been presented before September 10, 1863, it would have been paid. This payment would have been made in good funds; for it is in proof by the bank that all the other checks had been paid in good funds, and that the Union Bank never claimed that the deposit was in Confederate money until September 10, 1863, when it was demanded by the military authorities. If then the cheek in suit had been presented, and paid it would have reduced the amount admitted by the Union Bank to have been in its hands from $26,752 to $24,202, and the Planters' Bank would have received this latter sum instead of the former. How then is the bank injured? The amount which would have been paid if the check had been presented, has since been paid by the Union Bank to the Planters' Bank. We are therefore unable to see what injury the Planters' Bank has sustained by the delay.
But the proof of the Planters' Bank shows.that of the amount paid to it by the Union Bank, after suit was commenced, upwards of $16,000 was admitted by the Union Bank to have been collected for the Clarks-ville branch. " It is difficult to comprehend the principle of justice or equity on which the bank can claim to hold on to this amount and resist the claim of the check drawn on this very fund.
It is further to be observed that during the pen-dency of the suit with the Union Bank, the Planters' Bank voluntarily amended its declaration so as to include in its claim the check now in suit, thus distinctly recognizing the check as a subsisting claim upon the deposit sued for, and virtually acknowledging its liability to pay the same. We cannot appreciate the force of the suggestion, that the holder of the check should wait until the termination of the litigation of the two banks, and if the Planters' Bank should be successful, then the check-holder may have a right to sue the bank for money had and received.
We think the bank has already received the fund out of which the check-holder has a right to have his claim satisfied.
Again, it is shown by the proof of the Planters' Bank, that when the plaintiff presented his check for payment in March, 1864, the Union Bank was guilty of a fraud in refusing to honor the check; that it had funds in hand belonging to the Planters' Bank, but they were withheld upon a false and fraudulent pretence of having paid them over under' military orders.
This is the case made out in the present suit by the defendant's proof; it is the case sought to be made out in the suit pending against the Union Bank. It will be observed that the Union Bank was the agent of the Planters' Bank, and the plaintiff took the check from defendant's agent under the implied legal guaranty that the' agent -would faithfully pay over the funds according to the order of the principal. This the agent has failed to do, and the principal now seeks to escape responsibility by showing that its own agent has wrongfully withheld the funds. The Planters' Bank repudiates and denies the sufficiency or • the truth of the reason given by the Union Bank for dishonoring the check, and proves clearly that in so doing the Union Bank, acting as its agent, was guilty of a fraud. It would be monstrous to allow a principal thus to avoid responsibility by showing that its agent had proved unfaithful in the execution of its trust: 1 Salk, 289; DeVoss v. Richmond, 18 Grattan, 338.
The check-holder has no remedy against the unfaithful agent of defendant. It is well settled that the check-holder has no right of action against a drawer upon refusal to pay the check: 2 Par. N. & B., 60, 61; 10 Wal., 152. His remedy is against the drawer alone. He loses this remedy by unreasonable delay, unless it is shown, as in this case, that the drawee is solvent, and that the drawer has sustained no damage. But if the drawer can escape by showing the unfaithful or fraudulent refusal to pay by his agent, then the drawer may sue and recover from the agent, and the check-holder is without any remedy.
We are therefore of opinion that the judgment of the Circuit Court was correct, and we affirm it.