GEORGE H. KING, Respondent,
BOWLING GREEN TRUST COMPANY, Appellant.
APPEAL by the defendant, the Bowling Green Trust Company from a judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of New York on the 14th day of February, 1910, upon the verdict of a jury on the first cause of action and upon a verdict directed by the court on the second cause of action, and also from an order entered in said clerk's office on the 18th day of February, 1910, denying the defendant's motion for a new trial made upon the minutes.
John Quinn, for the appellant.
Henry B. Twombly, for the respondent.
On June 20, 1907, the Congregational Church Building Society drew its check on the Mercantile Trust Company of New York for $2,500, payable to the Fourth Congregational Church of San Francisco. The latter opened an account with the California Safe Deposit and Trust Company on September 30, 1907, and on October 24, 1907, the treasurer deposited said check, together with $17.95 in currency, with the said trust company and was credited by the latter with the sum of $2,517.95. The check with other items aggregating $6,473.47 was sent 'for collection and credit' to the defendant and was received by it on the morning of October 30, 1907. The defendant forthwith credited said amount to the California Safe Deposit and Trust Company and on that day presented the check, with other items, to the Mercantile Trust Company and received in payment the latter's check, drawn on the National
Bank of Commerce, which on that day was deposited with the drawee and by it credited to the account of the defendant. At two-fifteen P. M. on said day, San Francisco time, and at five-fifteen P. M., New York time, after the close of banking hours, the California Safe Deposit and Trust Company closed its doors, but the defendant did not learn of that until the following morning. This suit is brought by the plaintiff as assignee of the Fourth Congregational Church of San Francisco to recover the amount of said check, with interest.
Said check, when deposited, was indorsed in blank and the person who deposited it in behalf of the payee testified that no instruction was given the California Safe Deposit and Trust Company at the time. On the pass book delivered to the treasurer of the said church society when the account was opened was the following: '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,' and on the deposit slip, upon which was entered the said deposit of $2,517.95, was the following: 'In receiving checks on deposit, payable elsewhere than in San Francisco, this bank assumes no responsibility for the failure of any of its direct or indirect collecting agents, and shall only be held liable when proceeds in actual funds or solvent credit shall have come into its possession. Under these conditions items previously credited may be charged back to the depositor's account. In making this deposit the depositor hereby assents to the foregoing conditions.'
There had been mutual and extensive dealings between the defendant and the California Safe Deposit and Trust Company for some time prior to the transaction in suit. The latter had a checking account with the former and was accustomed to send to it bills for collection and credit in two ways: a, by a so-called cash letter; b, by a so-called collection letter. The two differed only in this, that the latter contained the following, not found in the former, viz.: 'Credit only when paid and report by number or date. Deliver documents only on payment. Do not hold our collections, but return promptly if not honored.' The check in question, with others, was transmitted with a cash letter. Another cash letter was also
received by the defendant from the California Safe Deposit and Trust Company on October 30, 1907, containing an item on Chicago for $12,500, which, however, was not credited because of the fact that it was drawn on an out-of-town bank. Of course, the defendant, upon receiving bills for collection, whether transmitted with a cash or a collection letter, was not obliged immediately upon their receipt and before collection to credit them unless it chose to do so. The defendant did not maintain a checking account with the California Safe Deposit and Trust Company, but it sent bills to the latter for collection. On the morning of October 30, 1907, the checking account of the latter with the defendant was overdrawn $9,645.35. During that day the defendant, in due course of business, paid or certified drafts drawn on that account amounting to $8,392.54, and it sent bills for collection amounting to $293.80. The California Safe Deposit and Trust Company was indebted to the defendant on that day to the amount of $92,478.56 on bills which had theretofore been sent to it for collection, and at the close of business its checking account with the defendant was overdrawn in the sum of $7,069.08.
While the deposit of a bill or check in the ordinary course of business, the depositor receiving a credit against which he can draw, has the effect of transferring the title ( Briggs v. Central Nat. Bank of N.Y. ,89 N.Y. 182; Metropolitan Nat. Bank v. Lloyd, 90 id. 530; Cragie v. Hadley, 99 id. 131), I do not think that was the effect of the original deposit involved in this cases The words on the deposit slip must be read into the contract. If title had at once passed to the California Safe Deposit and Trust Company, it would have had recourse to the depositor only in case the paper was dishonored, but by its contract it assumed no responsibility until it had received actual funds or solvent credit. Up to that time it was, then, merely the agent of the depositor. However, the check was actually credited by the defendant and paid by the drawee during banking hours on the thirtieth of ...