Jefferson County Savings Bank v. Hendrix

Neither the deposit of a check with a bank for collection, nor the entry on its books of the amount of the check as a deposit of money in favor of the owner of the check, nor yet the negligence of such bank in and about the collection of the check from tlm drawee bank whereby there is a failure to collect it, no-' all these facts combined makes such (‘heck the property of the collecting bank, nor the owner of the. check a depositor of the money entered to his credit, in such sense as gives him a right of. action for money had and received, or otherwise, for the amount of the face of the check as money due him from the bank. A bank which receives a check for collection and enters the face value of it as a deposit credit to its owner, becomes the agent of the owner to collect it. If the collection is made, the relation of depositor and banker is consumated. If the collection is not made, the bank’s right to charge off the deposit arises. If the bank fails to -collect the check through fault of its own, it is liable to' the holder for damages sustained by him through such failure; and this liability may be enforced by an action of assumpsit sounding in damages for the breach of the bank’s implied undertaking to use due care and diligence to collect the check, or by an action in case for damages resulting from negligence of the duties in respect of collection imposed upon it by law upon the fact of its receiving the check for collection. But the damages recoverable-are by no means necessarily the amount of the check. It by no means follows from the negligent failure of the bank to collect the check, or its negligent failure to give the owner timely notice of the dishonor of the paper whereby he is denied fruitful opportunity to collect it .himself, that the owner loses the demand'for which the check was given, or even *676any part of it. To the contrary, it is frequently, if not generally, true that the owner of the paper secures some part or all of the debt for which it was given in some other way, as by subsequent voluntary payment by, or suit against the drawee "bank, when it is solvent, or by dividends upon its being wound 'up as an insolvent concern. It will, therefore, not suffice for the owner to hail the collector bank into court and implead that “von took this check to collect it, you did not do your duty in that regard and of consequence the check was not collected, therefore, the check is yours, and the amount of it in money is mine and in your hands for me, and you must pay me that amount.” It does not follow from the facts the owner thus puts forward that the bank is liable to the-extent he seeks to hold it, or to .any extent in fact. The mere failure of collection of the check does not demonstrate the loss to the owner of the demand for which it was given, or any part of such demand. The owner should say to the bank: “You took this check for collection. Certain duties were thereby devolved upon you in respect of efforts to collect, or in respect of notice to me of its dishonor. You failed to perform those duties. From such failure resulted the non-payment of the check. Because of its non-payment I have suffered damages in ■ the sum of so many dollars. For these damages vou are liable to me, and must account in this action.” In other words, a complaint in the common counts; or for money deposited; or for the amount of the check, averring rue bank’s unwarranted failure to collect it, or negligence operating to deprive the owner of opportunity to collect it — averments which, if proved and this theory of liability were sound, would entitle the plaintiff to recover the full face value of the check though his demand may have been satisfied in whole or in part from other sources, though he had suffered no damages or only nominal damages from the defendant’s derelictions — would either not, by intendment- or expressly, present the facts of this case — which is true of the common counts and of special counts 5 and 6 — or claim a recovery on the facts of this case upon an inadmissible theory and in an amount which those facts do not justify — which is true of counts 7 and 8. Hence it is that we deem it unnecessary to discuss rulings below bearing upon the first six counts of *677the complaint: None of them is supported by the evidence. Hence it is also that we hold that the demurrers to counts 7 and 8 should have been sustained. These counts not only claim a sum of money, to-wit: the amount of the check, which the plaintiff by their averments is not shown to be entitled to; but they are so wanting in averments of damages suffered by plaintiff as to state no cause of action. It will not do to say. that they aver facts which warrant a recovery of damages and that they are not rendered bad by the form and amount of the claim they make, because if they are held good against the demurrer a recovery would follow proof of their avei ments though no proof of damages should be made since neither of them contain any allegations that plaintiff has suffered any damages from defendant’s failure to collect the check; non constat, but that his demand has been otherwise paid, as above suggested, and non constat, but that though not paid, the demand is collectible in whole or in part out of the assets of the drawee bank. — Bank of Mobile v. Huggins, 3 Ala. 206; Morris v. Eufaula National Bank, 106 Ala. 383; Sahlien v. Bank, 90 Tenn. 227; Farmers’ Bank & Trust Co. v. Newland, 97 Ky. 464; Zane on Banks & Banking, § 184.

The different doctrine which prevails where a creditor receives the check of his debtor to pay the debt may be referable to the distinctive consideration that in such case the creditor being the payee in the check or unqualified indorser is the legal holder and owner of it for the purpose of realizing upon it and applying its proceeds to his own debt; and upon this theory the case of Watt v. Gans & Co., 114 Ala. 264, is not opposed to the views above expressed.

Abstractly, and prima facie at least, it is negligence in a collecting bank to send the check to be collected by mail or otherwise directly to the drawee bank for payment, especially when the paper is a cashier’s check, i. e., drawn officially byr the cashier of the drawee bank.

Of course it is the duty of a collecting bank to give the' depositor prompt notice of the dishonor of a check deposited for collection.

Beversed and remanded.