Mr. Chief Justice Walker
delivered the opinion of the Court:
This was a sight draft drawn by Strong & Wiley Brothers on the Ohio Life Insurance and Trust Company, in favor of Williams & Bro. The last named firm indorsed the draft to It. K. Swift, Brother & Johnston, who indorsed the same to appellee. It was negotiated on the day of its date to B. 3L Swift, Brother & Johnston, who, on the same day, sent it to Swift, Bansom & Co., of New York, for collection, and it reached them on Saturday, August 22, 1857. On that day Swift, Bansom & Co. indorsed upon the draft “received payment,” and wrote their name under the indorsement, and sent it by a messenger to the Trust Company for payment. He received a check for the amount, drawn upon the American Exchange Bank, and left the draft in the possession of the company. This check was placed in the bank with which Swift, Bansom & Co. transacted their business, to go through the clearing house. On the next Monday the check was thrown out, at the clearing house, and on that day the Trust Company had suspended and did not open for business.
The check was on that day returned, but the assets and papers of the Trust Company were then in the hands of the sheriff, who, notwithstanding the Trust Company were willing to return the draft, was unwilling to surrender it to Swift, Bansom & Co. Payment of the draft was demanded and refused, and the draft was then protested, and notice, by mail, was given to Strong & Wiley Brothers. On the same day Swift, Hansom & Co. telegraphed to Swift, Brother & Johnston that the Trust Company had. failed, and that the draft was unpaid. It is likewise insisted that after notice of protest appellants agreed to pay and take up the draft.
The first question presented is whether the protest for nonpayment was in time so as to hold the drawer and indorsers. It may safely be stated as a rule that the holder of a sight bill, in order to charge the drawer and indorsers, must put it into circulation or present it for payment, at the farthest, on the next business day after its reception, if within reach of the person upon whom it is drawn. Chit, on Bills, 382. Such an instrument matures when presented for payment; and if presented on the day of its reception it.is thereby matured, and if not then paid it must be protested for non-payment on the.same day, and due notice given in order to charge the drawer and indorsers, precisely as if it had been made payable on a specified day. And such a bill, like all others, should be presented for payment by the holder or his agent during the business hours of the day.1 And after a bill has been presented by the holder or his agent for payment, it may be again presented by a notary public, for the purpose of making a protest for non-payment, after business hours on the same day. Chit. on Bills, 458.
But if the holder of a sight bill presents it, and finds no one at the drawee’s place of business to- honor it, he may elect to consider the bill as not presented for payment, but any act evincing an election to consider it as presented for that purpose will bind the holder, and he cannot, after such election, claim that the bill was not presented for payment. Mitchell v. Degraud, 1 Mason C. C. R. 176.
The bare reception of a check from the drawee for the amount of the bill will not, ordinarily, be considered as a payment, but only as a means of payment, and this is. the rule, whether the bill is surrendered to the drawee at the time of receiving the check, or is retained by the holder until payment is consummated. It may be imprudent to surrender the bill before actual payment is made, but such improvidence does not change the rule.
Although the bare reception of a check will not, usually, be considered as a payment, but simply as a means of obtaining payment, still it may be shown that the check was, in fact, received as absolute payment. That fact may be established by showing an express agreement to that effect, or by showing such circumstances as will satisfy the mind that such was the understanding of the parties at the time the check was taken. If the holder of the check appropriates it to his own use, by putting it into circulation, it then becomes a payment of the bill for which it was received. Or when the holder of a check, received for the amount of a bill, deposits it with his banker, it becomes a question of fact whether such deposit was made as and for so much money to the credit of the depositor, or whether the check was deposited for collection merely. If deposited in the usual course of business, the presumption would be, that it was for collection merely, and not as money. By the usage of bankers, the teller, with whom such deposits are generally made, has no authority to receive them as and for money, and this is known to the depositor; but the teller has authority to receive checks for collection, and, therefore, the presumption is, that they were received for that purpose until the contrary is shown.
If, however, a banker receives a check as and for so much money, and gives the depositor credit therefor, such an act is an appropriation of the check by the holder, and operates as a payment of the bill for which it was received, from the moment the deposit was made. And from that time the check becomes the absolute property of the banker with whom it is deposited, and the bill ceases to exist, and cannot be revived, except by the agreement of all the parties who would be affected thereby.. But the holder of a check may as well employ his-banker as an agent to collect it, as any other person. And if the holder deposits the check with his banker for collection; such deposit is precisely the same in its legal effect, as handing the check to a messenger for the same purpose. Such a deposit will not operate as a payment of a bill for which a check was taken. In such a case, if the check is duly presented and not paid, the depositor must receive it back from the messenger or banker acting as such. In order to avoid loss by the failure of the drawer, the holder of a check ought to present it for payment before expiration of the next business day after it is received. But the time within which a check must be presented, to charge the drawer, in nowise regulates or fixes the time when a protest must be made, in order to charge the drawers or indorsers of a bill for which the check was received as a means of payment.
If a check is received as a means of payment, the party receiving it must procure its payment on the day of its reception, or return it for non-payment on that day, so as to have the bill for which it was received protested for non-payment on that day. The person receiving a check for such a purpose, has no more right to send it through a banker for collection on the next business day, than he has to put it in his safe and send it by his clerk on the next business day. Whilst a presentment on the next business day is sufficient to charge the drawer of the check, it is no excuse for the non-protest of the' bill on the day of its presentation for payment. The negligence of the holder of the check in not procuring payment of the bill on the day of its presentation, by the means he receives for that purpose or otherwise, discharges the drawers and indorsers of the bill if protest is not made.
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Mr. Chief Justice Walker
delivered the opinion of the Court:
This was a sight draft drawn by Strong & Wiley Brothers on the Ohio Life Insurance and Trust Company, in favor of Williams & Bro. The last named firm indorsed the draft to It. K. Swift, Brother & Johnston, who indorsed the same to appellee. It was negotiated on the day of its date to B. 3L Swift, Brother & Johnston, who, on the same day, sent it to Swift, Bansom & Co., of New York, for collection, and it reached them on Saturday, August 22, 1857. On that day Swift, Bansom & Co. indorsed upon the draft “received payment,” and wrote their name under the indorsement, and sent it by a messenger to the Trust Company for payment. He received a check for the amount, drawn upon the American Exchange Bank, and left the draft in the possession of the company. This check was placed in the bank with which Swift, Bansom & Co. transacted their business, to go through the clearing house. On the next Monday the check was thrown out, at the clearing house, and on that day the Trust Company had suspended and did not open for business.
The check was on that day returned, but the assets and papers of the Trust Company were then in the hands of the sheriff, who, notwithstanding the Trust Company were willing to return the draft, was unwilling to surrender it to Swift, Bansom & Co. Payment of the draft was demanded and refused, and the draft was then protested, and notice, by mail, was given to Strong & Wiley Brothers. On the same day Swift, Hansom & Co. telegraphed to Swift, Brother & Johnston that the Trust Company had. failed, and that the draft was unpaid. It is likewise insisted that after notice of protest appellants agreed to pay and take up the draft.
The first question presented is whether the protest for nonpayment was in time so as to hold the drawer and indorsers. It may safely be stated as a rule that the holder of a sight bill, in order to charge the drawer and indorsers, must put it into circulation or present it for payment, at the farthest, on the next business day after its reception, if within reach of the person upon whom it is drawn. Chit, on Bills, 382. Such an instrument matures when presented for payment; and if presented on the day of its reception it.is thereby matured, and if not then paid it must be protested for non-payment on the.same day, and due notice given in order to charge the drawer and indorsers, precisely as if it had been made payable on a specified day. And such a bill, like all others, should be presented for payment by the holder or his agent during the business hours of the day.1 And after a bill has been presented by the holder or his agent for payment, it may be again presented by a notary public, for the purpose of making a protest for non-payment, after business hours on the same day. Chit. on Bills, 458.
But if the holder of a sight bill presents it, and finds no one at the drawee’s place of business to- honor it, he may elect to consider the bill as not presented for payment, but any act evincing an election to consider it as presented for that purpose will bind the holder, and he cannot, after such election, claim that the bill was not presented for payment. Mitchell v. Degraud, 1 Mason C. C. R. 176.
The bare reception of a check from the drawee for the amount of the bill will not, ordinarily, be considered as a payment, but only as a means of payment, and this is. the rule, whether the bill is surrendered to the drawee at the time of receiving the check, or is retained by the holder until payment is consummated. It may be imprudent to surrender the bill before actual payment is made, but such improvidence does not change the rule.
Although the bare reception of a check will not, usually, be considered as a payment, but simply as a means of obtaining payment, still it may be shown that the check was, in fact, received as absolute payment. That fact may be established by showing an express agreement to that effect, or by showing such circumstances as will satisfy the mind that such was the understanding of the parties at the time the check was taken. If the holder of the check appropriates it to his own use, by putting it into circulation, it then becomes a payment of the bill for which it was received. Or when the holder of a check, received for the amount of a bill, deposits it with his banker, it becomes a question of fact whether such deposit was made as and for so much money to the credit of the depositor, or whether the check was deposited for collection merely. If deposited in the usual course of business, the presumption would be, that it was for collection merely, and not as money. By the usage of bankers, the teller, with whom such deposits are generally made, has no authority to receive them as and for money, and this is known to the depositor; but the teller has authority to receive checks for collection, and, therefore, the presumption is, that they were received for that purpose until the contrary is shown.
If, however, a banker receives a check as and for so much money, and gives the depositor credit therefor, such an act is an appropriation of the check by the holder, and operates as a payment of the bill for which it was received, from the moment the deposit was made. And from that time the check becomes the absolute property of the banker with whom it is deposited, and the bill ceases to exist, and cannot be revived, except by the agreement of all the parties who would be affected thereby.. But the holder of a check may as well employ his-banker as an agent to collect it, as any other person. And if the holder deposits the check with his banker for collection; such deposit is precisely the same in its legal effect, as handing the check to a messenger for the same purpose. Such a deposit will not operate as a payment of a bill for which a check was taken. In such a case, if the check is duly presented and not paid, the depositor must receive it back from the messenger or banker acting as such. In order to avoid loss by the failure of the drawer, the holder of a check ought to present it for payment before expiration of the next business day after it is received. But the time within which a check must be presented, to charge the drawer, in nowise regulates or fixes the time when a protest must be made, in order to charge the drawers or indorsers of a bill for which the check was received as a means of payment.
If a check is received as a means of payment, the party receiving it must procure its payment on the day of its reception, or return it for non-payment on that day, so as to have the bill for which it was received protested for non-payment on that day. The person receiving a check for such a purpose, has no more right to send it through a banker for collection on the next business day, than he has to put it in his safe and send it by his clerk on the next business day. Whilst a presentment on the next business day is sufficient to charge the drawer of the check, it is no excuse for the non-protest of the' bill on the day of its presentation for payment. The negligence of the holder of the check in not procuring payment of the bill on the day of its presentation, by the means he receives for that purpose or otherwise, discharges the drawers and indorsers of the bill if protest is not made.
The consequences of a neglect to protest may be waived by the person entitled to take advantage of it, and a promise to pay the bill, made by the person insisting upon the want of protest, after he is aware of the laches, to the holder amounts to a waiver of such laches, and admits the holder’s right of action. Chitty on Bills, 501.
When tested by these rules, it will be seen that there have not been proper steps to charge the drawer and indorsers in this case. The bill was received for collection by Swift, Ransom & Co., on the twenty-second day of August, and notwithstanding they might have delayed presenting it for payment until the twenty-fourth, which being Monday, was the next business day, they saw proper to present it for payment on the same day it was received. By so presenting it, the bill became due on that day, and to have held the drawer and indorsers, precisely the same steps should have been taken as if the bill had in terms been payable on that day. And for that purpose it was necessary to have had it protested, and due notice given to the drawers and indorsers of the bill. Had it been specifically payable on the twenty-second, it would not be contended that-a protest and notice of non-payment on the twenty-fourth would have been in time; and yet there is no difference in principle in the two cases.
The evidence of usage is not sufficient to establish a general custom, that checks may be received as a means of payment for a bill, and the bill be held over until the next day without protest, for the purpose of ascertaining whether the check will be. paid. It can hardly be supposed that such a usage could alter the general commercial usage of the world, however long or well established. If such a custom did obtain in Hew York it. could not affect the law of other places.
We have not deemed it necessary to consider the effect of an agreement, express or implied, on the part of Strong and Wiley, with the Ohio Life Trust Co., that drafts drawn upon funds deposited with it should be paid through the clearing house, according to a usage of paying them in that manner. It will be time to consider that question when such an agreement is shown, and it shall also be shown that Strong and Wiley must have known, in drawing the draft, that such agreement would be acted upon by the Hew York correspondent of Williams & Bro., and that it was so acted upon.
The instructions contravened these rules, and were therefore erroneous.
It was contended, that the appellants, after notice of the protest, agreed to pay and take up the draft. If such a promise was made in view of all the facts, attending the presentation of the draft for payment and its subsequent protest, there can be no question that their liability was revived. But if such a promise was made in ignorance of any material fact, it would be otherwise. And it is for the jury, in view of all the evidence in the case, to say whether such a promise was made. And as the case will be passed upon by another jury it would not be proper to pass upon the evidence in this record, bearing upon that question.
The judgment of the court below is reversed, and the cause remanded.
Judgment reversed.