and communicated them to appellants, but he states no facts, except that he had heard persons predict that Corning would break Burch in their litigation. It also appears that some depositors withdrew their funds previous to that time from Burch & Co.'s banking-house. But it does not appear that appellants were aware of the fact, nor that the withdrawal was occasioned by want of confidence in the solvency of Burch & Co. The appellants transacted their business through this banking-house and seem to have had confidence in its solvency. This evidence is not sufficient to establish the liability of the appellants.

"It was lastly urged that appellants were guilty of negligence in taking no steps to correct the mistake in passing the money to their credit. It does not appear that they had any notice of the mistake until they heard of the failure. But it is insisted that when the money failed to come by express, they should have written to have learned the reason, and that had they done so the money might have been saved. The draft was received by Burch & Co. on the 30th of May, and it was paid on the next day. On the 3d of June, three days afterward, Burch & Co. failed and made an assignment. There were, then, but two days between the collection and the failure, within which to receive the money. Suppose appellants had become apprehensive that something was wrong, by failing to receive the money by express on the 1st of June and had written on the second, does any one suppose the money could have been thus obtained, or information that would have led to its receipt? It will hardly be contended that because the money was not received on the 1st of June, appellants should have gone in person or sent a messenger the next day; and even if they had, it is not probable anything could have been obtained.

"We think the verdict is clearly against the evidence and that the court below erred in refusing to set it aside. The judgment is, therefore, reversed, and the cause remanded. Judgment reversed."

When the bank receives a collection, when presentment is necessary, it becomes the duty of the bank at the proper time

in order to charge the drawer and indorsers to present the same for acceptance or payment as the case may be. The absence of special instructions (which instructions if contrary to law) will not relieve it of liability.

The act of presentment is performed by exhibiting the paper and requesting its acceptance or payment; and when presented, the person presenting the same must be in possession of the instrument.

The reason for and requirement of an exhibit of the instrument is that the maker may judge of the genuineness of the same, and if paid, he may receive immediate possession of the bill.

If the drawee refuses to accept the bill when presented or refuses to pay, the bill is dishonored.

Where a note is payable at a particular bank and at a specified time, it is dishonored if, at the time it became due and payable, the instrument was in the possession of the bank for collection.

In such a case, the bank is not liable for not making a formal presentment of the instrument.

§ 275. Presentment of checks.

The rule as stated in a previous chapter, in discussing the law of checks relating to presentment or payment is, that when a check comes into the possession of a bank for collection it should be presented for payment with all dispatch and diligence.

It must be presented within a reasonable time after its receipt for collection. And as to what constitutes a reasonable time, depends upon the circumstances of each case.22

The court, in the case of Montelius v. Charles, 76 Ill. 303, says:

The general doctrine in each case must depend on its own peculiar facts and be judged accordingly."

Presentment should be made during usual and reasonable hours, with banks presentment at a bank should be during banking hours.

The Supreme Court of the State of Vermont says, that when a note is payable at a bank where its business is transacted.

22 Loyd v. Osborn, 92 Wis. 93.

during certain specified hours of the day, the note may be presented during any of those hours, and it is the duty of the maker to provide for its payment whenever the presentment is made. If the note is not paid when presented, the holder is at liberty to treat it as dishonored, and it is sufficient to charge the indorser.

In New York where a promissory note was made payable at a bank, it appeared that, upon the day the note fell due, the indorser being ready to pay it, sent the maker to the bank during banking hours to see if the note was there and to ascertain the amount.

In this case the note was not presented for payment until an hour after the close of the customary banking hours, then the holder was admitted into the bank and found the cashier and demanded payment. Payment was refused on the ground that no funds had been left with the bank to pay. The court held that the demand was sufficient to charge the indorser.

$276. Protest-Bank's duty.

The collecting bank is bound to protest paper when protest is necessary to preserve the owner's recourse against the parties liable to him.

The Statute of a State provides how, where, and when protest must be made.

Protest may be waived upon a foreign bill of exchange by language or words on the face of the instrument, waiving protest.

§ 277. Bank accepting payment for collection.

A bank is authorized to receive money only. If it receives checks, drafts, or other evidences of debt by doing so it takes them at its own risk and will be held responsible in money to the owner of the collection.23

This rule that the bank is authorized to receive money only is denied by the Supreme Court of the State of Kentucky, in the case of the Citizens' Bank of Paris, Ky. v. Houston, 98 Ky. 139.

23 Essex Co. Nat. Bank v. Bank of Montreal, 7 Biss. 193 Fed. Cas. Nos. 4532, 5359.

Judge Lewis delivered the opinion of the court:

"Joseph Houston, about September 22, 1891, delivered to, and Citizens' Bank of Paris, Kentucky, received for collection an order or check for $129, which one Griffith had drawn on the Cynthiana National Bank at Cynthiana, payable September 30, 1891, to his order. In proper time it was sent to the latter bank, but returned, duly protested for non-payment, of which fact written notice was immediately mailed to both appellee and Griffith.

"October 6, 1891, Griffith drew an order on the Bourbon Bank of Paris, for $131.66, being the amount of the original one and protest fees added, and payable to order of Brent, cashier of Citizens' Bank of Paris, which, upon representation that he had there deposited money to meet it, was accepted by the bank instead of the original, then canceled and given up. But payment of that check was likewise refused, although presented for that purpose to the Bourbon Bank of Paris, on the day it was given and other days.

"October 22, 1891, Griffith made a deed of assignment for the benefit of creditors generally, and March, 1893, Houston brought this action to recover of Citizens' Bank of Paris, amount of original check and interest, for which, under peremptory instruction of the court, the jury returned a verdict, followed by judgment now appealed from.

"The alleged cause of action is that defendant, without consent or knowledge of plaintiff, canceled and gave up that check and accepted in lieu of it a check from Griffith, the debtor, on another bank, made payable to the order of its own cashier.

"Up to that time defendant had performed its undertaking with due diligence and in good faith, and the original check was plainly worthless, for Griffith was, as seems to be conceded, insolvent. But, where strictly required to do or attempt to do more in an effort to collect the debt, it is plain defendant accepted the new and gave up the old check in good faith, and as the only then practicable or possible way of subserving the interest of plaintiff. And that it intended and could possibly profit by assuming ownership of the debt and becoming liable to Houston, therefor, is wholly unreasonable. We know of no rule of right that would, under such circumstances, make

an agent liable to his principal, for such was the relation of the parties throughout the transaction.

"It may be that when an agent acts without or beyond the line of his authority, and the principal incurs thereby an injury, he may be held liable; but here no injury was done to plaintiff by cancellation of one and acceptance in its place of another check, nor, according to the evidence, was the transaction either without implied authority of plaintiff or such as he would or could have reasonably objected to if present.

"The testimony of Griffith introduced by plaintiff, shows that after the check on National Bank of Cynthiana had been protested for non-payment, he, by letter, informed and promised plaintiff he would go to Paris and fix it up,' and that plaintiff after being notified of the protest and return of the check to the Citizens' Bank of Paris, remained away four or five days, making no effort to collect it himself, is convincing that he expected and intended defendant, as his agent, to attend to the matter of having Griffith fix it up.

"The fact of the new check being made payable to the cashier of defendant is no evidence of its intention to assume ownership of the check or become liable to plaintiff therefor, because, he being absent, it had to be drawn in that way order to procure proper presentation and payment.

in

"It seems to us, as this record stands, defendant incurred no liability to plaintiff, and the jury ought to have been so instructed."

It is held that a collecting bank is not authorized to receive in payment for collection, a claim against itself; and in the case of Francis v. Evans, 69 Wis. 115, the court holds that a bank is not authorized to receive in payment for a collection, its own certificate of deposit, but certificates of deposit by universal custom between banks are treated as cash; and where a custom becomes universal, it is recognized by the courts as a law and the courts will take judicial notice of a universal

custom.

In the State of Iowa (at least) the court has taken judicial notice of a custom prevailing where the banks have treated certificates of deposit as cash.