Case Name: Gilman et al. v. First Nat. Bank of City of New York
Court: New York Supreme Court, General Term
Jurisdiction: New York
Decision Date: 1892-03-31
Citations: 18 N.Y.S. 495
Docket Number: 
Parties: Gilman et al. v. First Nat. Bank of City of New York.
Judges: 
Reporter: West's New York Supplement
Volume: 18
Pages: 495–499

Head Matter:
Gilman et al. v. First Nat. Bank of City of New York.
(Supreme Court, General Term, First Department.
March 31, 1892.)
Voluntary Payment—Recovery.
Plaintiffs notified the payee of a bill of exchange drawn on them that they had not sufficient funds of the drawer to meet it, whereupon the payee notified them to honor it to the extent of the funds in their hands. The draft was presented by defendant, to whom it had been sent for collection, in the due course of business, and paid in full by plaintiffs’ cashier, who had no knowledge of the balance on hand to pay the draft. Held, that such payment was not such a mistake as would entitle plaintiffs to recover from defendant the excess paid, especially where, by reason of payment, protest was prevented. O’Brien, J., dissenting.
Appeal from circuit court, New York county.
Action by Winthrop S. Gilman and another against the First National Bank of the City of New York to recover the amount of a draft paid by mistake. The complaint was dismissed on the trial before a jury, and plaintiffs’ exceptions were ordered to be heard in the first instance at general term.
Affirmed.
Argued before Van Brunt, P. J., and O’Brien and Patterson, JJ.
Parsons, Shepard <& Ogden, (H. B. Closson, of counsel,) for appellants. Peabody, Baker & Peabody, {Fisher A. Baker, of counsel,) for respondent.

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 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 6th 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 9th 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 23d January and the 10th February. On the last-named day, 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 Burn-ham, 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 ease 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. Bank v. Varnum, 49 N. Y. 276. 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, Keg. Inst. § 926. We think the complaint was properly dismissed, and that the judgment should be affirmed, with costs.
Van Brunt, P. J., concurs.