Court Opinion

ID: 6736875
Source: CourtListenerOpinion
Date Created: 2022-07-20 23:19:09.168549+00
Date Added: 2024-06-11T16:01:48.897903
License: Public Domain

Spalding, Ch. J.
(dissenting). Although not certain that the bank was not the agent of the defendant, on the assumption that it was plaintiff’s agent, I am impelled to concur in the dissent of Mr. Justice Bruce. The question of payment seems quite simple, and rests upon a few elementary principles. No refinement of reasoning is necessary *565to reach a conclusion. It is conceded that an agent may accept nothing except cash in payment of a debt to his principal, unless authorized to receive a substitute. It is also conceded that a check is not payment, in the absence of an agreement that it shall be received as payment. The plaintiff never ratified the acts of the bank. The bank never charged Baird’s check to his account, and never transmitted either money or a draft to the plaintiff. It is also conceded that the burden of proving payment is upon the defendant. In view of all these conceded propositions I am unable to understand how the facts can shift the burden to the plaintiff and require him to prove that the bank was possessed of funds with which to pay it. The fact that no remittance was made to plaintiff during the eight days the bank remained open must, at least, tend to show a lack of funds with which to make a remittance. Cases in which it was shown that the money was actually in the bank do not sustain the majority opinion, and such are most of those cited, and the checks were charged to the drawer by the banks. To make the check good, two things are vitally necessary: First, that the drawer have credit at the bank; and, second, that the bank have funds with which to honor the check. Both of these elements must be proved, wherever necessary, or payment is not shown. Payment means something besides the delivery of a piece of blank or worthless paper. It means payment in truth, and no substitution of obligations is payment unless accepted as such by the creditor. For authorities in addition to those cited by Judge Bruce bearing upon this subject, see: 2 Bolles, Bkg. 557 (f), 625; Randolph, Com. Paper, §§ 1550, 1551, 1553, 1554; Graham v. Sykes, 15 La. Ann. 49; Devlin v. Chamblin, 6 Minn. 468, Gil. 325; Olcott v. Rathbone, 5 Wend. 491; Born v. First Nat. Bank, 123 Ind. 78; 7 L.R.A. 442; 18 Am. St. Rep. 312, 24 N. E. 173; McMullen v. People’s Sav. & L. Asso. 57 Minn. 33, 58 N. W. 820.
In several of the authorities cited in the majority opinion, the holding that the giving of a check and its acceptance hy the collecting bank constituted payment is based upon the proposition that it would be am idle ceremony to hand to the owner of the check the money and immediately receive it back, but in such cases the reasoning rests upon the proved or admitted fact that the bank had the money. This proof is lacking in the case at bar. In Devlin v. Chamblin, 6 Minn. 468, Gil, *566325, the supreme court of Minnesota says: “The taking of the note or security of a person other than the debtor is not prima facie evidence that the same was taken in payment of a precedent debt. There must be evidence of an express agreement to take such note in payment, in order to give it that effect; and the burden of proof is upon the debtor to show such agreement.” And again: “But the whole question would appear to be one of fact for the determination of a jury, rather than of law for the court; and, as the ordinary understanding in contracts of sale is that the vendor shall, in some way or other, get his money, the burden of proof ought to lie on those who seek to show that he agreed to be satisfied with something less.”
In Olcott v. Rathbone, 5 Wend. 491, it is said: “Nothing is considered as an actual payment which is not in truth such, unless there be an express agreement that something short of the payment shall be taken in lieu of it. . . . The defendant who has got possession of it (the check) without fraud . . . but without payment, cannot defend himself against a suit on it by showing that fact, unless he shows also an actual payment or an agreement that the small note and check should be taken in full and absolute satisfaction.” McMullen v. People’s Sav. & L. Asso. 57 Minn. 33, 58 N. W. 820, is on all fours with this case, and the court there held that the collecting bank was the agent of defendant.
In Sutherland v. First Nat. Bank, 31 Mich. 230, it is held that where the maker, instead of attending to the payment of a note himself, intrusts the money to his bankers to do it for him, he thereby makes them his agent; and if they fail to carry out his instructions he cannot saddle the loss upon the holder of the note, who has simpN sent the note forward indorsed for collection, and for whom such bankers have performed no act of agency in the premises. And the Michigan court there expressly declines to pass upon the question as to how far the owner would have been bound had the bankers, having the note for collection and the money of the maker to pay it with, canceled the note or changed the credit on their books from the maker to the owner.
In Aultmann v. Lee, 43 Iowa, 404, it was held that a receipt of wheat by an agent for the collection of a note, with an agreement to indorse the amount upon the note, which agreement he failed to carry put, did not constitute payment, in the absence of authority by the *567agent to accept wheat, as the payment should have.been made in money to discharge the debtor from liability.
The defendant pleaded payment. He started to prove payment, and as a step in that direction proved that he delivered the check of Baird to the bank, and that on Baird’s deposit account there was a credit due him of $8,000 from the bank. Here his proof of payment rested, and it is now in effect said that the burden, by this incomplete proof of payment, shifted to the plaintiff, and that it devolved upon him to supply the lacking evidence. There is no pretense that the plaintiff either agreed to receive the check in payment, or that he authorized the bank to do so, or that, in fact, it was ever credited to his account or charged to Baird’s account. In fact he knew nothing whatever of the check, and no claim is made that any proceeds of the check were ever sent him. The majority admit that had the plaintiff proven there was no money in the bank with which to honor the check the judgment should be affirmed, but I am unable to see how this series of unauthorized and illegal acts on the part of the defendant and the bank shifts the burden to the plaintiff, which, except for such illegal and unauthorized acts, would remain with the defendant. The burden of proof was at all times on the defendant under his plea of payment, and pajrment was not made unless there was money in the bank with which to honor the check of Baird. How, then, does the proof of part of the acts necessary to constitute payment, without proof of the other fact necessary, shift the burden? In 2 "Wharton on Contracts, § 854, under a discussion of the law of novation, this subject is covered, and it is said that it must be shown from all the facts that it was the intention of the creditor that there might be substituted one debt for the other. And it seems to me that the majority opinion is in direct conflict with provisions of §§ 5273 to 5276, both inclusive, of Rev. Codes 1905. Might it not as well be held that the burden is on the plaintiff in the first instance to negative payment ? In fact, I think the bank was the depository of an escrow, and as such the agent of both parties, unless the request of Olson’s agent, Baird, for Olson’s convenience, that the deed be deposited in the bank, constituted the bank sole agent of Olson, as is held in the McMullen Case, supra. While there could be no question of the correctness of the judgment if the-bank was Olson’s agent only, yet in view of the conclusion I reach this *568is immaterial. To restate tbe.proposition in a sentence, bow can tbe fact that tbe bank delivered a deed wbicb it bad no right to deliver, and received a check wbicb it bad no right to receive, overcome tbe burden cast upon tbe defendant by bis plea of payment, and cast it upon tbe plaintiff, and compel him to prove that there were funds in tbe bank with wbicb to make this check, received without authority, good?