Court Opinion

ID: 3987499
Source: CourtListenerOpinion
Date Created: 2016-07-06 10:43:38.474537+00
Date Added: 2024-06-11T13:43:29.158125
License: Public Domain

The proper disposition of the case, in some particulars at least, is dependent upon the findings of the court below, of which no complaint is made. The court, by finding 15, found:
"(15) That, when said check was deposited by plaintiff in the Bank of Tomah, said bank issued and delivered to plaintiff in payment therefor its draft drawn upon a Chicago correspondent."
The court further found:
"(17) That the Bank of Tomah, in accepting said check from the plaintiff, did so under the following agreement: `This bank, in receiving out of town checks and other collections, acts only as your agent, and does not assume any responsibility beyond due diligence on its part the same as on its own paper."
"(18) That the Marine National Bank, in accepting said check from the Bank of Tomah, did so under the following agreement: `In accepting items payable outside of Milwaukee, this bank acts only *Page 323 
as your agent and beyond due diligence assumes no responsibility until final returns are received. The right is reserved to forward items direct to the drawee bank.'"
Substantially the same kind of a finding was made as to the defendant bank by finding 22, and wherein the court further found:
"That the remitting bank authorized the defendant and its subagents to forward such checks direct to the banks on which the same were drawn for collection and remittance, that such remitting bank assumed full responsibility and liability for any loss through, or occasioned by or as a result of, such direct routing of checks, and that such remitting bank authorized the defendant to charge back any item for which it did not receive final payment."
Upon the fact as found in finding 15, I think it clear that the plaintiff had no cause of action against the defendant. Upon that finding there was no relation of agency between the plaintiff and the Tomah bank nor between plaintiff and defendant. Such finding shows that the title to the check passed from plaintiff to the Tomah bank when plaintiff indorsed the check over to the Tomah bank and received its draft "in payment" thereof, and that the relation between them was that only of indorser and indorsee. In such case, if because of negligence of the Tomah bank or any of its transmitting agents the check was not presented in due course, and as the result thereof was not paid, or if the failure of its collection was due to negligence of the Tomah bank or any of its transmitting agents, such negligence in no sense was chargeable to plaintiff, and the Tomah bank had no legal right to charge the loss to plaintiff; and the fact that the loss was charged to plaintiff gave it no right to hold defendant liable for alleged negligence on its part. In such case its rights in the premises were to resist the action of the Tomah bank charging the loss to plaintiff. When plaintiff received the draft direct from the Tomah bank *Page 324 
"in payment of the check indorsed over to it by plaintiff, the plaintiff no longer had any interest in the check. Its concern after that was only with respect to its liability in case of dishonor of the check on due presentation. In such view the judgment of the court below in favor of defendant was right.
But finding 17 is somewhat in discord with finding 15. I do not well see how both may be true. However, no complaint is made of either finding. Thus, what principle of law should be applied to findings 17, 18, and 22, assuming them to be uninfluenced by finding 15, or as though the fact as found by finding 15 was not in the case? Finding 17 shows, not that the title to the check passed to the Tomah bank, not that it became its property, not that anything was given "in payment" of it, but that the Tomah bank received the check only as an agent of plaintiff for collection and to be responsible to the plaintiff for a want of diligence, or for negligence, or for breach of duty, in acting for plaintiff in the collection of it. Upon about the same terms and under about the same conditions the Marine National Bank received the check from the Tomah bank and the defendant bank from the Marine National Bank. In such case, if the loss of the check was occasioned through negligence or want of diligence of the Tomah bank, or of the Marine National Bank, or of the defendant bank, I think plaintiff had a cause of action against the Tomah bank, unless its agreement with plaintiff restricted its liability merely to its own personal, and exclusive of any imputed, negligence, or against either of the other banks whose negligence occasioned the loss. Whether the agreement as found between plaintiff and the Tomah bank so restricted the latter's liability I need not consider, as the action is not against it. Thus, because of the relation as found, if the defendant bank was negligent which negligence occasioned the loss, I think the action was maintainable against the defendant bank. On such theory the question then is whether or not on the facts as found the defendant bank was so clearly guilty of negligence which *Page 325 
occasioned or caused the loss as to require a finding or conclusion to the contrary to be vacated or disapproved as being not sufficiently supported. Mr. Justice GIDEON has considered the case from that viewpoint, and reached the conclusion that on the facts as found by the court below the defendant bank was not so clearly or conclusively guilty of negligence or want of diligence as to require a finding to the contrary to be vacated. In that view and in that result I concur.
As pointed out, it is claimed that the defendant bank was negligent in two particulars: (1) In presenting the check direct to the drawee bank, the Citizens' State Bank of Buhl; and (2) in not demanding money in payment thereof, and accepting a draft or an exchange on the Twin Falls bank.
As to the first, it is enough to say that, as found by the court below, the defendant bank received the check for collection on the condition that the check could be or was to be presented direct to the drawee bank. That was the defendant's contract. In receiving the check for collection, it had the undoubted right to impose such condition.
As to the second, the matter is not so clear. The court below found that the defendant bank was not negligent in such particular. We are asked to overthrow such finding chiefly on the ground that the defendant bank, in payment of the check, was unauthorized to accept anything but money, and, when it accepted the draft on the Twin Falls bank in payment thereof, it did so at its peril, and in such respect was especially guilty of negligence because of its knowledge, as found by the court, that the banks in Southern Idaho, and particularly the banks at Buhl and vicinity, were in an extended condition, that fifteen banks had failed in Idaho in 1921, and that an unusual and unprecedented situation existed in Idaho with respect to the financial condition of banks doing business therein, but that the defendant bank had no knowledge as to the financial condition of the Citizens' *Page 326 
State Bank of Buhl. However, also as pointed out by Mr. Justice GIDEON, the court further found that there was a well-established, prevalent, uniform, and continuous custom and usage in banking business in Utah and Idaho, of which the plaintiff had knowledge, that in such case, as here, instead of demanding and accepting only money, to take drafts or exchange upon correspondent banks and that banking business in making collections could not well be conducted on any other basis; that to have pursued any other course would have aggravated the banking conditions in Southern Idaho, inasmuch as it was not usual nor customary, nor the practice of banks, to carry in their vaults cash to meet out of town collections, and in such respect kept reserves or made provisions with corresponding banks for such purpose. That such custom or usage is unreasonable or repugnant to law, or to the terms of any shown contract, may not successfully be asserted. When I say repugnant to or inconsistent with law, I mean something more than a mere rule or doctrine of law, for customs and usages sometimes of necessity are repugnant to mere rules or doctrines of law, nevertheless for such reason are not regarded as invalid or unreasonable. While an agent acting for his principal in collecting a note or check, in the absence of evidence to the contrary, is not authorized to accept in payment of the note or check anything but legal tender and thereby bind the principal, as is contended by the plaintiff, yet such generally is a mere rule or doctrine of law which by agreement may be modified or waived, and so too may it be modified or waived by a valid, reasonable, and relevant custom or usage known to the parties concerned or of such notoriety as to presume knowledge. Valid and reasonable customs and usages concerning the subject-matter of a contract of which the parties are chargeable with knowledge or by implication incorporated therein, unless expressly or impliedly excluded, of course, not to contradict, add to, or take from the contract, or to vary its terms, but on the theory that the usage or custom forms a part of the contract *Page 327 
when not in conflict with it. As applied to negligence, the commission or omission of an act or the doing of it in a particular way, in accordance with a general and usual custom or usage, may not be conclusive against a charge of negligence, for the test in such case is the doing or failure to do what prudent men under similar circumstances would do. The custom or usage may itself not be prudent; hence the doing of an act in accordance therewith my nevertheless constitute negligence. So while the doing of an act in accordance with custom and usage, doing it as such an act under the same or similar circumstances usually and generally — customarily — is done by those skilled and experienced in the business, is in most jurisdictions not conclusive against a charge of negligence, nevertheless when so performed has great evidentiary or probative value against a charge that the act as so done was negligence. An act performed in a way that it generally and usually is performed by those skilled and experienced in the business at least is prima facie or some proof that such was not a negligent way, and sufficient to support a finding against negligence. And then the finding as to the defendant bank's knowledge as to the financial condition of banks in Idaho, and the claim made that by reason thereof due care required the defendant bank to demand and accept only money in payment of the check, are, to some extent at least, minimized by the further finding that banking business, in making out of town collections, could not well be conducted in such way and that to have here pursued such a course would have aggravated the banking condition in Southern Idaho for the reason stated in such further findings. I therefore, think the finding or conclusion against negligence is sufficiently supported. I deem it proper to say what I have, lest it be assumed that the affirmance of the judgment on the ground stated in the main opinion implies a holding that the action was maintainable by the plaintiff, if the defendant bank was guilty of negligence, even though the facts be as found in finding 15. *Page 328