Case Name: WINTHROP S. GILMAN and Another, Plaintiffs, v. FIRST NATIONAL BANK OF THE CITY OF NEW YORK, Defendant
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1892-03
Citations: 70 N.Y. Sup. Ct. 480
Docket Number: 
Parties: WINTHROP S. GILMAN and Another, Plaintiffs, v. FIRST NATIONAL BANK OF THE CITY OF NEW YORK, Defendant.
Judges: Yan Brunt, F. J., concurred.
Reporter: Supreme Court Reports (Hun)
Volume: 70
Pages: 480–487

Head Matter:
WINTHROP S. GILMAN and Another, Plaintiffs, v. FIRST NATIONAL BANK OF THE CITY OF NEW YORK, Defendant.
Mils and notes — payment by mistake — right to recover — protest is necessary to hold the drawer.
In an action brought to recover money paid by mistake on a foreign bill of exchange, it appeared that a Mrs. Cockran had deposited with a bank in Cadiz, Ohio, a Kansas bond for collection; that the Cadiz bank forwarded the bond to a Kansas bank, which collected it; that the Kansas bank, on or about January twenty-third, drew a sight draft on the plaintiffs, their New York correspondents, in favor of the Cadiz bank for the amount thus collected, and sent it tó that bank; that the latter bank received the draft on February eighth; that, in the meantime, on February sixth, the Cadiz bank had notified the plaintiffs of the existence of the draft and requested them to hold moneys sufficient to pay it; that, on February ninth, the plaintiffs telegraphed the Cadiz bank that the Kansas bank had( not sufficient funds to meet the draft; that the Cadiz bank replied requesting the plaintiffs to apply to the payment of the draft such moneys of the Kansas bank as it had; that the draft was forwarded, and was, on February tenth, paid in full by the plaintiffs to the defendant.
JBeld, that a case of mistake was not made out, and that there could be no recovery, for the amount paid beyond the funds of the Kansas bank in the. plaintiff s’ hands.
That the draft was paid in full, in the usual course of business, when the plaintiffs knew that they had not sufficient funds of the Kansas bank to enable them to make full payment.
That a protest was necessary in order to enable the defendant or the Cadiz bank to hold the drawer, and that the payment by the plaintiffs prevented protest. (O’Brien, J., dissenting.)
Exceptions of the plaintiffs, Winthrop S. Gilman and Theodore Gilman, directed to be heard in the first instance at General Term, the complaint having been dismissed after a trial at the New Yorlc Circuit before the court and a jury.
The action was brought to recover an amount claimed to have been paid by mistake upon a draft.
This draft the Cadiz bank received on February 8,1891, was dated January 23,1891, and was in the following form:
FARMERS’ STATE BANK OF AUGUSTA.
$638.60. Augusta, Kansas, Jan. 23d, 1891.
Pay to the order of D. B. Welch, Pres., six hundred and thirtyeiSht tVt dollars. e. R GRANT,
Gashier.
To Gilman, Son & Go., New York.
Written across face: “ Gilman, Son & Co. Paid Feb. 10, 1891. 62 Cedar St., N. Y.”
Indorsed: Pay E. Scofield, cashier, or order, for collection account of First National Bank of Cadiz, O. I. C. Moore, Cashier. First Natl. Bank, N. Y. Feb. 10, 1891. Paid.
II. B. Glosson, for the plaintiffs.
Fisher A. Baher, for the defendant.

Opinion:
Patterson, J .:
This is an appeal from a judgment entered on the dismissal of the complaint at circuit. The action was brought to recover back a sum of money which the plaintiffs claim was paid by mistake on a draft or bill of exchange presented to them by the defendant and paid on the 10th day of February, 1891. There is no dispute as to the facts, which are, in brief; that a Mrs. Cockran, living at Cadiz, in Ohio, deposited for collection, with a bank located and doing business at that place, a bond of a Kansas township. That bond was sent by the Ohio bank to a Kansas bank, which collected its amount on the 23d of January, 1891. The plaintiffs were the New York correspondents of the Kansas bank, and on the day last named that bank, by its cashier, drew a sight draft on the plaintiffs, which was, after some delay, received by the Cadiz bank, and was forwarded by that bank to the defendant for collection. Meantime, and on the sixth of February, the Cadiz bank notified the plaintiffs of the existence of the draft and requested them to hold moneys of the Kansas bank sufficient to meet it. On the ninth- of February the plaintiffs telegraphed the Cadiz bank that the drawer had not sufficient funds to meet the draft. On the same day the Cadiz bank, in reply to the telegram last referred to, requested, by telegraph, the plaintiffs to apply to the draft what funds they had of the Kansas bank. There is nothing in the case to show the exact state of the account between the drawing bank and the plaintiffs, but there were several transactions had between them, intermediate the twenty-third of January and the tenth of February. On the last-named day, and, as appears from the letter and telegrams above referred to, the plaintiffs, with full knowledge of the fact that there was not enough money in their hands to the credit of the account to which the draft was to be charged, paid it in full to the defendant. The next day the plaintiffs made reclamation, not of the whole amount-paid, but only of the amount of the deficiency in the account of the Kansas bank. There is nothing in the testimony to establish mistake of the plaintiffs. The only witness who testified on that subject is Burnham, the-plaintiffs' cashier, and he says he did not know what the balance on hand was to pay the draft until after the payment was actually made. His principals did, however. In the absence of any other testimony, it is quite clear this draft was paid-in the usual course of business, and notwithstanding the plaintiffs knew it was not good in full on the day preceding its payment. We do not think a case of mistake was made out, such as would entitle the plaintiffs to recover, and more especially as it is clear that by reason of the payment a protest of the paper was prevented. It was a foreign bill. (Commercial Bank v. Varnum, 49 N. Y., 275 ) The act of payment, of course, prevented the protest, and before an action- could be maintained against the drawer on the draft protest was necessary. (2 Daniel on Neg. Inst., § 926.)
We think the complaint was properly dismissed and that the judgment should be affirmed, with costs.
Yan Brunt, F. J., concurred.