Case Name: William Pack v. John H. Thomas
Court: High Court of Errors and Appeals of Mississippi
Jurisdiction: Mississippi
Decision Date: 1849-01
Citations: 13 S. & M. 11
Docket Number: 
Parties: William Pack v. John H. Thomas.
Judges: 
Reporter: Mississippi Reports
Volume: 21
Pages: 11–22

Head Matter:
William Pack v. John H. Thomas.
It is not competent to prove by parol that a check, purporting on its face to be for so much money, was designed by the drawer to be payable in the notes of a depreciated bank, and was received with that expectation by the payee; to permit the proof would be to vary a written contract by parol.
Checks, upon their non-payment, are not governed by the same rules which regulate negotiable paper ; the drawer of the check is not released for want of notice of its non-payment, even though he had reasonable ground to believe it would be paid, or had funds deposited for its payment; it is only when there is proof that the drawee has failed, that the presumption of injury to the -drawer arises, which would be rebutted by proof of notice of the dishonor; and when a check is drawn without funds to meet it, both demand and notice may be dispensed with.
Where the drawer of a check not paid on presentation, has been injured for want of notice of such non-payment, he is not thereby discharged from the payment of the whole check, but only to the extent of the actual injury he has sustained by the want of notice.
In error from the circuit court of Madison county; Hon. Robert C. Perry, judge.
William Pack sued John H. Thomas, in assumpsit, on the following writing, viz: —
“No. — . May 29, 1838. Branch of the Commercial Bank of Natchez, at Canton, pay to William Pack, Esq., or bearer, thirteen hundred and thirty-five dollars. John H. Thomas.”
The plea was the general issue. The plaintiff read the check, and introduced John Munn, who stated that at the time the check was drawn, the defendant had not, nor had he at any time since, had in the bank on which it was drawn, any money in cash or other funds, except that he had at the time the check was drawn, deposited in that bank, and yet had a sufficient sum in Brandon bank notes, with which to pay the' check, in. that paper; when the check was drawn witness was, and yet is, cashier of said bank. That when Thomas, the defendant, made the deposit in Brandon money, witness informed him, that it would only be received on deposit, to pay out the same funds as a kind of special deposit, and that they would not pay cash. That he so informed all depositors of that kind of money; at the time the deposit was made, Brandon money circulated in payment of debts, and that he received it in payment of discounts. That the bank had failed, and its paper was of no value. That the check was presented to him and he refused payment in cash, but would have paid in Brandon money. He also stated that the bank furnished blank checks, and persons who had deposited Brandon or Citizens’ bank notes, usually filled up and drew their checks in the form of the one sued on.
The defendant then called Edwin Stephens as a witness, who stated, he had had a conversation with Pack, the plaintiff, in which Pack stated, that he had met with the defendant in the Streets of Canton, when the defendant informed him, that he had collected for him a debt as attorney, for which he had received Brandon bank notes, and inquired of him, Pack, if he would receive the Brandon notes; Pack answered that he would not; that they then separated and again met, when Thomas again inquired of Pack, what he, Thomas, ought to do with the notes. Pack replied, that his advice would be to deposit the money in the Commercial bank. That they met a third time, when Thomas informed him that he had made the deposit, and offered him a check on the bank, which Pack received without saying whether he would or would not receive Brandon money. That bis reason for receiving the check was, that he thought the bank would use the Brandon money, and pay him in cash. That Pack also said, he believed that if Thomas had not received Brandon notes, he could not have collected the debt. This was all the evidence. The plaintiff objected to Stephens’s evidence as inadmissible. The objection was overruled, and the plaintiff excepted.
The plaintiff moved the following instruction, viz : —
If the jury believe from the evidence, that at the time Thomas, the defendant, drew the check sued on, he had not funds in the bank with which to pay the same in cash, nor any part of it, but only had Brandon notes deposited by way of special deposit, to be paid out in the same notes, and that he knew that cash would not be paid by the said bank, on account of such deposit, they ought to find for the plaintiff; which the court refused to give.
On motion of the defendant, the court instructed the jury —
1. If they believe from the evidence, that the defendant had, at the time of drawing the check, any reasonable ground ¡¿o believe that the check would be honored by the bank on which it was drawn, he was entitled to due notice of dishonor, if the check was dishonored, and the law is for the defendant.
2. If they believe from the evidence, that the defendant had reasonable ground to believe, that the check would be paid and that the check was dishonored by the bank; and that the defendant sustained damage or injury by not receiving notice in due time, of non-payment by the bank, the plaintiff cannot recover in this action, and they must find for the defendant.
3. If the jury believe from the evidence, that the Brandon money was deposited by the defendant in the Commercial bank of Natchez, in consequence of the advice or authority of the plaintiff, and that afterwards the plaintiff took of the defendant the check declared on; and that the said plaintiff then knew that the said check was drawn on the faith of the Brandon money, so deposited by the defendant, then the defendant was entitled to due notice, if the check was not paid, and if no such notice Was given, the plaintiff cannot recover.
To the refusal to give plaintiff’s instruction, and to giving de-fendant’s, the plaintiff excepted; and upon the rendition of a verdict for defendant, sued out this writ of error.
D. Mayes, for plaintiff in error, maintained,
1. The court erred in not ruling out the evidence of Stephens, as it was evidence to vary the legal effect of the check, as it read on its face. The legal effect was, that if Thomas drew it, not having funds to meet it, presentment and notice were unnecessary. The effect which the evidence of Stephens was intended to have, and which it was made to have on the trial, was to make presentment, and notice of non-payment necessary. The legal effect of a writing cannot be varied by verbal agreements or understandings, preceding or accompanying its execution. 3 Phillips, Ev. 1470; Com. Bank of Lake Erie v. Norton, 1 Hill’s N. Y. R. 509.
2. The court should have instructed as asked by the plaintiff.
If the drawer of a check has not funds in the hands of the drawee, no notice is necessary. 1 Mann. & Grang. 757; Kemble v. Mills, 39 Eng. C. L. R. 655; Judge Story, In the matter of Brown, 2 Story’s R. 519; Walwyn v. St. Quintín, 1 Bos. & Pull. 655. See also True v. Thomas, 16 Maine, 4 Shepl. R. 36; Franklin v. Vanderpool, 1 Hall’s R. 78; Mohawk Bank v. Broderick, 10 Wend. R. 308; Story on Prom. Notes, 624, § 492; lb. 629, § 497. “The reason is, that if he drew the check without having funds, he had no right to expect payment of the check, and his conduct amounted to a fraud and imposition upon the payee.”
3. But another fact is worthy of consideration. Thomas was the attorney of Pack; he drew this check for money due from him to his client, knowing the check would not be paid. The relation of client and attorney still continued. When he gave the check, even if he believed it would have been paid, it was his duty to have informed his client that he must present it, and if not paid give him notice. Instead of doing this, he draws the check, knowing it will not be paid, and then seeks to shelter himself under want of notice, and throw the loss on his client, whom he was bound by law, by duty, and by honor, to guard against loss, and advise with fidelity and learning. Will the law help him I
4. The court erred in the first instruction, asked by defendant. According to that instruction, if Thomas had drawn the check without having deposited Brandon notes, or any thing else, and never had any means in bank to take up the check, or any part of it, and did not lose any thing by want of notice; yet if he had reasonable ground to believe that it would be honored; for example, if the cashier had promised to pay without funds, or if he had formerly funds, and had checked all out, but by mistake believed he had funds; the law was for him, and the jury should find for him. The authorities before referred to, abundantly prove the contrary.
5: Nor should the second instruction, asked by defendant, have been given. By that instruction, if the defendant sustained damage, no odds to how small an amount, the plaintiff could recover nothing. Whereas, if he sustained damage, he should only be discharged to the extent of that damage, to be ascertained by the jury. Story on Prom. Notes, 630, sec. 497, and authorities there cited.
6. The court also erred in the third instruction given.
It conveys the idea, that if defendant knew that plaintiff drew the check on faith of the Brandon money, the plaintiff was bound to give the notice, although defendant knew when he drew the check that it would not be paid, and concealed from the plaintiff, his client, a knowledge of that fact. It also goes on the idea that there was evidence conducing to prove the state of fact, to which the instruction has reference. If, by the words, “ in faith of the Brandon money,” is meant, in faith that the check would be paid, therp was no evidence that tended to establish such an hypothesis. If that was not meant, then the. instruction was not law. If it was correct as an abstract proposition, its tendency was to mislead. No instruction should be given, but upon evidence in the case. Chesapeake 6p Ohio Canal Co. v. Knapp et al., 9 Peters, 568.
A. H. Handy, for the defendant in error.
He insisted that the evidence of Stephens was competent and properly admitted.
1. It did not contradict the check, nor vary its import. It had reference to the question of notice and damage. 20 John. R. 146; French v. Bank of Columbia, 4 Cranch, 153; Campbell v. Pettengill, 7 Maine, (Greenl.) 126; Chitty on Bills, 356-468, edit. 9th American from 8th London. As to the strictness required on checks, as to demand and notice, see 10 Wend. 306 ; 6 Cow. 490; Story’s Prom. Notes, § 492; 2 Hill (N. Y.) 425. The onus of showing no damage on account of non-presentment and failure of notice, is onjhe plaintiff. Story’s Prom. Notes, § 498 ; 2 Hill (N. Y.) 428.
2. The evidence was competent, because it went to show a failure of consideration for the check. 6 S. & M. 358; 2 lb. 258-514.
3. Even if the evidence did explain the legal import of the check, by showing that the funds referred to in the check were a particular kind of money, it is by no means clear that this is incompetent. Many modifications of the rule, as to the inadmissibility of parol evidence, to explain a written instrument, have been made. 3 Phil. Evid. (Cowen & Hill,) 1473; Campbell v. McClenachan, 6 S. & R. 171.
It is also held that bank notes are considered money for many legal purposes. Miller v. Race, 1 Burr. 452; 9 Johns. R. 120; 1 Ohio Rep. 81.' Hence, when a written contract merely states an amount in dollars and cents, it is held that it may be shown by parol that it- was agreed at the time to be paid in bank bills. Morton v. Wells, 1 Tyler, 381, cited in 2 United States Digest-, 304, pi. 2325; lb. pi. 2317.

Opinion:
Mr. Chief Justice Sharkey
delivered the opinion of the court.
This action was brought on a check for f1335, drawn on the branch of the Commercial Bank, of Natchez, at Canton, by Thomas in favor of Pack. There was a verdict for the defendant, and it is now insisted, that the court erred in admitting testimony, and also in its charges to the jury.
The first point raised relates to the admissibility of Stephens's téstimony, which was to this effect: in conversation, Pack stated to the witness, that he (Pack) had met defendant, Thomas, in. Canton, who informed him, that he had collected a debt for him as attorney in notes of the Brandon Bank, and asked Pack if he would receive them in payment; Pack replied that he would not, and they separated. They met again, when Thomas asked Pack what he ought to do with the Brandon notes; the latter replied that his advice would be to deposit them in the Commercial Bank. They met a third time, when Thomas informed Pack that he had deposited the notes as advised, and offered Pack the check in question, which he received, without saying whether he would or would not receive the Brandon notes. His reason for doing so was, that he thought the bank might use the notes and pay him in money.
The cashier of the bank was examined, who stated that Thomas had no money in the bank at the time the check was drawn, or afterwards, except in Brandon notes, which had been received as a kind of special deposit, and that Thomas was informed when he made the deposit, that money would not be paid on it. Payment of the check was demanded and refused, though the cashier states that he would have paid it in Brandon notes.
Under these circumstances, it must be very clear that Stephens's testimony was improperly admitted. It was an effort to prove, from circumstances, an agreement to receive the Brandon notes in payment of the check. This was the effect of the testimony, and,,beyond all doubt, the object of its introduction. Then the question is plainly this : if one give a check for so much money, is it competent for him to prove by oral testimony, that it was agreed, either expressly or impliedly, at the time the check was given, that it should be payable, not in money, but in something else? Is it competent to show that it was not intended as a check for money, although it calls for money on its face 1 This is too clearly varying the legal effect of the instrument; it is changing the contract. And the objection is not obviated by the circuitous method of arriving at the fact. The competency of evidence is to be determined by its legal effect. It is immaterial how long or circuitous the chain may be by which the end is reached. It would have been just as free from objection, if the witness had said in so many words, Mr. Pack agreed to receive Brandon notes for the check. By the face of the instrument it is one thing, a check payable in money; by the proof offered it is a different thing, it is a check payable in depreciated bank notes, which are not money. It might as well have been con verted into a check for any other commodity. And the object was not to defeat the instrument Iqr matter subsequent, which operated as a discharge or a new contract; but to vary its effect by showing facts which transpired before and at the time it was delivered.
The rule is very distinctly laid down, that where the law requires a written instrument, or where parties adopt that mode of contracting, it is a matter of principle and policy to exclude inferior evidence from being used, either as a substitute for, or as an alteration of, the written contract. The operation of an instrument cannot be varied by showing, that a different intention existed at the time it was made. Its legal effect must be preserved, and all contemporaneous expressions or circumstances which tend to vary it, must be excluded, unless established by proof of the same character. 3 Starkie on Evid. 994-1008. Oral evidence is inadmissible to prove that a general acceptance of a bill of exchange was intended to be conditional only. Heaverin v. Donnell, 7 S. & M. 244. It is inadmissible to prove that a promissory note was intended to be payable at a particular time, when no time of payment was expressed, as that would alter its legal effect; Thompson v. Ketchum, 8 Johns. 189; or to prove that one who had engaged in writing to become surety on a promissory note, was only to be held liable in case of the insolvency of the principal; Hunt v. Adams, 7 Mass. R. 519; or to show that a note payable at a day certain, was to be payable on a contingency only. 3 Starkie's Evid. 1008. The law presumes, that parties mean exactly what they have said in writing, and that they have said all that was intended, and it is dangerous to relax the rule which holds them to their written contracts.
It is also insisted, that the court erred in refusing to instruct the jury, that if they believed from the evidence, that when Thomas drew the check he had not funds in bank for its payment in cash, or any part of it, but only Brandon notes placed there as a special deposit, to be paid out in the same notes, and that he knew cash would not be paid by the bank on account of such deposit, they ought to find for the plaintiff. This charge should have been given. A check for cash is not payable in depreciated bank notes, or other specific thing. If it was the agreement of the parties, that Brandon Bank notes should be received in payment, the check should have been so drawn. Such an agreement Avould have justified the refusal of the charge, and the court Avas influenced, no doubt, by the consideration, that Stephens's testimony might establish such an agreement, but Ave have shorvn that it was incompetent for. that purpose. The propriety of the charge is made manifest by the testimony of the cashier.
At the request of the defendant, the court gave three charges, which Avere also made the ground of objections. The first was, that if the defendant, when he drew the check, had any reasonable ground to believe it would be paid, he was entitled to due notice of dishonor, and the law was for the defendant.
Some of the decided cases have held this doctrine applicable to checks, on the ground of their resemblance to inland bills of exchange. Whilst there is a resemblance in form, they are still very different things; they differ in their origin and object, and it may be very questionable, Avhether notice of dishonor is necessary in any case, except as rebutting evidence. If the defendant should show, that the bank in which the deposit was made had failed, then a presumption Avould arise, that he had sustained an injury, Avhich would be rebutted by proof of notice. But if the bank continues solvent, no injury can result for want of notice. A check is supposed to be drawn on an actual deposit of money, which has been made for the convenience and safety of the depositor, in a bank of his own selection, which acts as his agent in making payments. It is not drawn on a commercial transaction, past or future, but it is a means of making a cash payment. The debtor answers the call of his creditor by saying, "I have deposited the money Avith my banker for you; call and get it on this voucher, which transfers the amount to your use." If the check be receiAred by the creditor, he thereby impliedly agrees to make demand ; but as a notice is required on commercial paper to protect the drawer, its object must be the same as regards checks. If, therefore, no injury can result from want of notice of the non-payment of a check, then of course notice may be dispensed with. If a check be drawn without funds to meet it, the drawer cannot be injured by a failure to give notice; he has nothing at stake to lose, and to draw a check under such circumstances is a fraud. Both demand and notice may be dispensed with, where the drawer has no funds in bank. True v. Thomas, 16 Maine R. 36; Mohawk Bank v. Broderick and Powell, 10 Wend. 304. If, on the other hand, there are funds in bank, and payment be refused, they, of course, remain there still as the funds of the depositor. They are just where he placed them, and he loses nothing. If he gets clear of the check for want of notice, he is evidently a gainer that much, as he still has the money on deposit. The law there would not presume an injury until it be shown, or until some circumstance be established, such as the failure of the bank, from which it might be inferred. This view is in accordance with the opinion of Judge Story, In the matter of Broion, 2 Story's1 R. 516. It is the doctrine, too, of the case of Murray v. Judah, 6 Cowen, 484, in which it was decided tQ be incumbent on the holder of a check to present it, but that a demand at any time before suit brought, was sufficient, unless it appeared that the drawer had failed, or that the drawer had in some other way sustained an injury. The plain import of this case is, that it is sufficient for the holder, in the first instance, to prove demand, and this will entitle him to recover, unless the defendant has sustained an injury for want of notice of dishonor. That proof must, of course, come from him, either by showing it directly, or by establishing circumstances from which the law would infer an injury, as the failure of the bank. And then, again, the plaintiff may negative the injury. The holder of a check takes the risk of the failure of the bank by holding it up, but that is the only risk he does take. Conroy v. Warren, 3 Johns. Cas. 259; 3 Kent, 88, 5th ed. The charge then was wrqng. It was an application of a rule of commercial law, which prevails as to bills of exchange, to a check which is a thing not subject to the rule. According to the common understanding as to the object of a check, it is a fraud to draw it without money in deposit. He who gives a check, gives with it also a guaranty that he has the money in bank, and he can have no reasonable ground, in a legal sense, to expect that it will be paid, when he has no funds in bank.
The second charge given was this: " If the defendant had reasonable ground to believe the check would be paid, and sustained damage or injury by the failure to notify him of the dishonor in due time, the plaintiff cannot recover." This charge was manifestly wrong, not only for the reasons above given on the preceding charge, but for the further reason, that if the defendant was even injured by the failure to give notice, he was only thereby exonerated to the extent of the injury. A mere partial injury would not entitle him to be exonerated from the whole debt. Story on Prom. Notes, 650, § 492.
The third charge given the jury, was, that if they believed from the evidence, that the Brandon, notes were deposited in bank by the defendant, in consequence of the advice or authority from the plaintiff, and that the plaintiff afterwards took the check, and then knew that it was drawn on the faith of the Brandon notes, which had been deposited, then the defendant was entitled to notice of dishonor, if the check was not paid, and if no such notice was given, they must find for the defendant.
Enough has been said already to show the impropriety of this charge. The " advice or authority of the plaintiff," as to the propriety of making the deposit, can have no influence on the question, unless they amounted to an agreement to receive the Brandon notes, and it was not competent to prove such agreement in the manner attempted. The check should have been drawn payable in the Brandon notes. It may be, that in good faith the plaintiff should have received the Brandon notes, but with that question we have nothing to do. But the'charge was moreover wrong in another respect. Even if notice was necessary, the failure to give it only entitled the defendant to be discharged to the amount of injury he actually sustained. He may have suffered a loss, but it may have been inconsiderable. If he lost a fourth, a third, or half the amount of his deposit, such loss would not entitle him to be discharged from the whole debt.
Judgment reversed and cause remanded.