
    Lewis Johnson et al. plaintiffs and respondents, vs. The Bank of North America, defendants and appellants.
    1. In an action to recover money alleged to have been paid by tho-plairitiffs, the ■ drawers of a draft, or by others for them, in consequence of a fraudulent imposition upon them by the defendants, who were agents of the holders, after the draft had been already paid by a check of the drawees; the onus of proof lies on the plaintiffs to establish their whole case, and not only that the draft was paid by such check, but that the defendants induced them to believe it not paid, and therefore not only that any condition upon which such check was taken as payment, had been complied with, but was known to the defendants to be so.
    2. The plaintiffs, drawers of a bill of exchange drawn on G. & B., having been notified by telegram by the holders, of the protest thereof, wrote and telegraphed to them, to send the bill to the Park Bank for payment, and to the Park Bank requesting protection for any drafts of theirs on- G. & 1. “ which might not have been paid,” meaning thereby to confine the bank to unpaid drafts. Held that upon such a confined authority the drawers could not be made liable to the bank by its paying the draft in question, the same having been already paid, marked as. paid and cut with a cancelling iron; nor was the Park Bank thereby authorized to use any funds of the plaintiffs for the purpose. .
    3. Held, also, that the voluntary payment by such bank of a draft previously paid and then mutilated by the cancelling iron, after having received a direction from the drawers, without taking any steps to ascertain from the drawees wh'at drafts upon them had been paid, could give it no rights against the drawers. That if any artifice had been practiced by the defendants or their principals upon the Park Bank to induce its officers to believe the draft was . not paid, it might make them liable to the Park Bank, but not to the plaintiffs, who had fully protected themselves by special and limited instructions.
    4. It is fully settled in this state, that the acceptance of one negotiable instrument in place of another and the surrender of the latter, is not a satisfaction of it, unless specially so agreed; and the burden of proving such agreement rests on the party claiming its benefit.
    6. No case has ever implied that the surrender of a draft for a check is any thing more than a conditional acceptance of the latter as payment; and that such condition is that the check will be good if presented in proper time in-payment, provided there is no valid legal excuse for not presenting it.
    6. The same diligence is not necessary in presenting a check received conditionally in payment of a draft, in order to prevent a discharge -of the parties to the latter as is requisite in an agent to collect such draft; and the principle of the cases wherever the latter is sought to be charged with negligence in not presenting in due time, are not applicable to the former.. The cases of The Commemal Sank of Pennsylvania v. Union Sank of New York, (11H. Y. Sep. 214,) and Unnemaker v. Zmier, (48 Barb. 234,) only pass upon the liability of agents. The case of Kobbie v, Clark, (4 Seld. K. Appeal cases, 11,) apparently an adverse authority commented on and explained.
    7. In order to hold the drawer of a check, payable in the place' where drawn, it is only necessary to present it the next day for payment. There is no reason why any greater diligence should be used by the holder of a check who. has taken it for a draft, in order to retain the liability of the parties to such draft, and such a presentment is in time for that purpose.
    8. The holder of a draft who has taken a check of the drawees in exchange therefor is entitled to be excused from presenting it for the same reasons which would justify his not doing so if he sought to hold the maker.
    9. The evidence in regard to the probability of a check being paid which requires a holder to present it, is not left to conjecture from every circumstance which may bear upon it; it is confined to want of funds in the hands of the drawees; of any reason to believe from the previous course of dealings between the drawers and drawees, and of any agreement between them that it should be paid.
    10. Prima facie want of funds of the drawer of a check in the hands of a drawee renders its presentment unnecessary, and the mere fact that the drawer has had funds in the hands of the drawee from which it might have been paid, does not affect the validity of the excuse for not presenting it, where the drawer has constantly overdrawn his account on the day the check should have been presented and leaves it overdrawn after bank hours. The holder of a check has all of the day in which the check ought to be presented, in order to present it; he is not bound to engage in a race of diligence with other persons holding similar drafts.
    11. An arrangement with the paying teller of a bank, made by the drawer of a check, by telling him the intended to overdraw heavily, but to make his overdrafts good, to which the teller agreed, is not such a provision for the payment of such check, where the drawer remains overdrawn until after bank hours, as to require the holder to present it, in order to secure the liability of the drawer.
    12. An allegation and finding that a check would have been “ paid or certified,” in the alternative, on the day it was made, is not sufficient to discharge the maker. Certifying a check is not equivalent to paying it, nor is a presentment for the former purpose equivalent to one for the latter.
    13. Mere agents of the holders of a draft, who have collected the amount from an agent of the drawers, pursuant to instructions from such holders, given in consequence of directions by such drawers, are not liable to pay the amount to the latter, if they have paid the same when collected to their principals, although they knew that the draft had been previously surrendered to the original drawees, when due, in exchange for their check on a bank, which had not been presented until next day, and wholly omitted to disclose to such drawers or their agent the fact of such surrender for the check.
    14. The keeping of running accounts for several years between the holders of a draft and their agents, which are balanced and rendered monthly, in which items of debit and credit on each side are constantly entered, and a credit in such accounts by such agent of money collected by them on such draft, with a subsequent balancing of such accounts, and an excess of credit at a subsequent period in their favor, is equivalent to paying over the money received for such draft, so far as it exempts them from all liability to third persons for such money as paid by mistake.
    (Before Robeetson, Oh. J., and Monem, and Gabvih, JJ.)
    Heard June 22, 1867;
    decided. July —, 1868.
    This was an action brought in August, 1859, to recover back the amount of a draft drawn by a firm in Washington, (D. C.) consisting of the plaintiffs and a Mr. Purdy, (known as The Washington City Savings Bank, upon a firm in New York, (Griggs & Lothrop,) in favor of a firm in Baltimore, (Josiah Lee & Co.,) paid by a bank in New York, (The Park Bank,) to the defendants, as agents of the Baltimore firm, after, as was claimed, the same had been previously satisfied by a check of the drawees.
    Such draft was for $2000, dated in August, 1857, (11th,) signed by one plaintiff, (Johnson,) only, as treasurer, payable forthwith, (being known as a check,) and remitted by the payees to the defendants for collection. Two days after its date, (August 13th,) the latter presented it for payment to the drawees, (Griggs & Lothrop,) who gave their check for it on the American Exchange Bank, cut it with their cancelling iron, wrote on it the figures 8/13, retained it, and charged the amount against the plaintiffs on their books. The drawees had on the morning of that day, $15,000 deposited with the bank, but announced their intention to its paying teller to overdraw, and contemplated over drafts. Once such account was made good after an over draft of $42,000. The drawees drew checks on such bank for every draft presented to them on that day, amounting to $100,000, and every one of such checks presented was paid. Just before three o’clock, however, being disappointed in the receipt of $25,000 which they expected, they could not make their account good, although they did so after three o’clock, for all that had been presented. The check given by Griggs & Lothrop to the defendants, was sent with the other exchanges of the latter to the clearing house the same day, and returned to them the next day, (the 14th,) unpaid after demand. Other checks of theirs on the same bank, drawn on the 13th, amounting to over $9000, also went to the clearing house, and were returned unpaid after demand. The president of the defendants, on that day obtained the draft back from the drawees, upon the ground that the check had not been paid, and returned them their check. The draft was again presented on that day to the drawees, by a notary, who, on a refusal to pay, protested the same, but ante dated his protest the 13th, and also sent notices of protest as of that day to the drawers, (who never received the same,) and the payees. The plaintiffs being informed on the morning of the 15th of August, by a telegram from Lee & Co., that the draft had been protested, on the same day dispatched a telegram to the Park Bank of blew York, requesting them to protect any checks drawn by them on Griggs & Lothrop, “ which might not have been paid by them," and also wrote to them announcing that they had telegraphed 6 requesting ’ protection for their checks on Griggs & Lothropat noon, they telegraphed to the payees of the draft, (Lee & Co.,) to send it to the Park Bank for payment; who, on the same day, enclosed it in a letter to the defendants, for collection, directing it “ to be presented to the Park Bank for payment.” Subsequently, (on the 17th August,) such draft was presented to that bank, by the defendants, certified by them, came in next day in exchange, and was paid. The amount was charged to the drawers, who subsequently accounted with that bank, therefor. The defendants had an account with Lee & Co. in which the amount received by the former for such draft was credited by them to the latter. On the subsequent 26th of August, the balance due to them from the latter, was nearly $3000, ($2971.11.)
    The complaint set forth' the following as facts: The partnership of the plaintiffs and Purdy as bankers in the city of Washington, under the name of The Washington City Savings Bank. The organization of the defendant as a corporation under the laws of the state of Eew York. The .drawing of the draft in question hy the plaintiffs, signed hy the plaintiff Johnson as treasurer, its delivery to and indorsement by the payees, (Lee & Co.) The demand of the payment of such draft on the 13th, its payment by a check given by Griggs & Lothrop on the American Exchange Bank, and its surrender to the payees. ' The payment, or certification by such bank of all checks drawn by such payees on that bank presented that day. . The certainty that such check would have been “paid or certified,” if presented that day. The stoppage of its makers on the 14th, and the delay in presenting it until that day and its non-payment. The re-exchange by the defendants on that day with Griggs & Lothrop of the check for the draft. The second demand of payment of such draft on the same day, its protest, and sending of notices of protest dated on the 13th to the drawers and indorsers thereof. The first intelligence to the plaintiffs on the next day, (15th,) of the dishonor of such draft, and their request to the Park Bank “to protect their checks ” on Griggs & Lothrop, in order to protect their credit.- Their belief of the regular demand of such draft, and of their liability produced by the acts previously detailed. The hearing by the defendants of the request of the plaintiffs to the Park Bank; and their presentation of the draft to the bank,, concealing from them the fact of the prior payment of it, and its non-protest until the day after, and inducing them to believe that it had been protested on its first presentation, and the payment by the bank of such draft, relying upon such “representations and concealments.” The release by Purdy of his interest in the claim to the plaintiffs, in December, 1867, and a subsequent demand on the defendants of the amount of such draft and their refusal.
    The answer took issue upon most of the material allegations of the complaint. It denied the receipt of the check of Griggs & Lothrop in payment of the draft in question; their inducing the redelivery of such check to them; the discharge of the drawers from liability; knowledge of any request by the plaintiffs to the Park Bank to pay their checks; any concealment from the Park Bank of any thing or any pretence to them, or any inducing them to believe any thing,-or their payment of such draft by believing in any concealment or representation of the defendants, and generally any misrepresentation or concealment by them. Such answer averred that the defendants received the draft from Lee & Go., for collection, held, presented and collected it, and did all other acts in relation to it, solely' as the agents of that firm, and paid over the amount collected by then! to it, without any knowledge that the Park Bank had paid such bill under a mistake, or that the plaintiffs claimed that it had been so paid, or any right to recover it back. •
    An order was made referring all the issues in the action to a referee, (W. E. Curtis, Esq.) to hear and determine the same. The following facts were found as such by him, in his report: The drawing and indorsement of the draft in question. The receipt by the defendants of the check of Griggs & Lothrop on the American Exchange Bank, “ in payment” for such draft, which was delivered to them. The payment or certification by such bank on that day of all other checks issued by them, and that such check would have been “paid or certified” by them, if presented on that day. The non-presentation of such check until the next day (14th.) Its non-payment and re-exchange for such draft. Its protest on the 14th, and notice of protest as of the 13th. The request by the plaintiffs to the Park Bank “to protect their checks on Griggs & Lothrop.” -Their ignorance, until after the payment of such draft, of its previous payment, and of their discharge from liability thereon; and their belief of their liability founded upon the previous proceedings in regard to such check. The presentation by the defendants of such draft to the Park Bank for payment, after hearing of the request of the plaintiffs, and its payment by such bank. The failure of the defendants to inform such hank of the first presentation of such draft; or its protest the day after it was presented, and its ignorance of the facts relating to such presentment and protest; the i release by Purdy-of his interest in the claim of the plaintiffs, and their demand of the defendants of the amount of the draft, and their refusal to pay. He did not find" any fraud, misrepresentation or concealment by the defendants, except their omission to inform the Park Bank of any thing in relation to the previous presentment of such draft.
    The only evidence on the trial as to any receipt of the check in payment for the draft, was the- testimony of G-riggs, who deposed that, on the 13th of August!,' 1857, the defendants presented such draft, and they gave them the check for it. On his cross-examination he stated, “ when I said we paid such draft, I meant we gave our check for it.” * * “Of course, we did nothing else, and gave nothing else ” to the defendants in payment of it. “We paid them in that way by a check on the American Exchange Bank.” They charged it to the drawers on the same day.
    The only evidence as to the probable payment or certification of such check on that day, was, also, that of Griggs, who related the nature of the arrangement before mentioned with the paying teller of the American Exchange Bank, the amount of his checks that day, his contemplation of over drafts on that day, their actual over draft of their, account, the certification or payment of all other checks of theirs presented on that day, their disappointment in the receipt of $25,000, leaving their account overdrawn at 3 o’clock, and their making their account good after that time. The exchange teller of the American Exchange Bank (DeBaum) proved the non-payment- of six or eight other checks, amounting to over $9000, next day, (14th,) drawn by Griggs & Lothrop on the 13th, and passing in the ordinary course of business through the clearing house.
    The only evidence of a request by the plaintiffs to the Park Bank to protect their checks on Griggs & Lothrop, was the testimony of one of the plaintiffs, (Johnson,) who stated that he heard of the non-payment of the draft on the 15th of August, 1857, by a telegraphic dispatch from Lee & Co. and sent one himself to the Park Bank the same day, requesting it to protect any checks drawn by him on Griggs & Lothrop, “ which might not have been paid by them.” He also sent a letter to it, on the same day, referring to such telegram. The only evidence that either the defendants or the holders of the draft (Lee & Co.) heard of any such request, before the draft was presented to the Park Bank for payment, was proof of a telegram sent to Lee & Co. by the plaintiffs, dated the 15th of August, 1857, directing them to send such draft “ to Park Bank for payment,” and a letter from Lee & Co. to the defendants, dated the same day, enclosing such draft for collection, and directing it to be presented to the Park Bank for payment. There was no evidence that the notices of protest sent by the notary ever reached the plaintiffs. Or of any conversation having passed on the presentation of the draft to the Park Bank for payment, or of any thing being then done, except such presentation and certification of the check. It was afterwards paid on such certificate. When so presented, it had the figures -8/13, written by Griggs & Lothrop, on it, meaning the 13th day of the eight month of the year, and been cut by the cancelling iron of Griggs & Lothrop, as before stated. There was no other evidence of any other knowledge on the part of the Park Bank of any other fact, or their belief upon any matter connected with such draft.
    The referee gave judgment for the plaintiffs for the amount of the draft and interest; from which the defendants appealed.
    
      Jas. P. Sinnott, for the appellants, defendants,
    I. If the referee’s finding of facts does not sustain his legal conclusions, the judgment, which is based thereupon, must be reversed. (Nelson v. Ingersoll, 27 How. Pr. 4. Buckingham v. Payne, 36 Barb. 87.)
    1. In this ease there is no express contract; the action, is in the nature of assumpsit for money had and received, and the right to recover depends upon the ownership of the money. The foundation of a such an action is well stated by Addison, in his work on contracts. (Add. on Cont. 2d Am. ed. 62.) The question is, to which party does the money justly belong. (Buel v. Boughton, 2 Denio, 91.) It is a question of title to the money itself, and the party seeking to recover money back must show that he is both the legal and equitable owner of it. Of course it is not sufficient for him to show that the defendant was not entitled to receive the money. The plaintiff must show that it is his money.
    2. In this case, the referee merely found that the Park Bank paid this bill of exchange, in pursuance of instructions from the plaintiffs, and as their agents. He does not find that it paid the same, out of moneys belonging to the plaintiffs, or that the bank had in its hands any such moneys. Their right to recover does not depend upon the authority for the act of payment, but upon the title to the money paid. If the Park Bank was authorized to pay by the plaintiffs, and 'did so, that may have created a liability to them on the part of the plaintiffs; but it did not make the money paid .by the Park Bank the money of tlie plaintiffs. A mere liability to pay, will not give a right of action to recover money, as if it had actually been paid.
    3. The referee has not found either that this money was the money of the plaintiffs, or that any money whatever of theirs has ever been used in the transaction. Upon his findings, the liability of the defendants to repay this money, is to the Park Bank, and the Park Bank only; it is they who held this supposed cause of action. They have neither assigned nor transferred the same to the plaintiffs, nor relinquished their claim against the defendants, so far as appears; and the defendants certainly cannot be liable to both parties. It is essential in this action that the plaintiffs should establish a claim to some particular and specific sum of money as received to his use. It is necessary that the money should originally, or at the time of the action brought, have belonged to the plaintiffs. (Chitty on Cont. 603, 609. Thurston v. Mills, 16 East, 274.) Here the money paid never belonged to the plaintiffs either actually, or by any fiction of law.
    4. If the plaintiffs had been depositors in the Park Bank, which the referee does not find them'to have been, it would make no difference, in respect to the ownership of the money, or the right to sue for it. “ Money paid into a bank ceases altogether to be the money of the party paying it in; it is the money of the banker, who is bound to return an equivalent by paying a similar sum to that deposited with him, when he is asked for it. To all intents, it is the money of the banker, to do as he pleases with. * * * The legal relation of banker and customer, in their ordinary dealings in money, is.purely and simply that of debtor and creditor respectively. Money paid into a banker’s is merely a common law debt.” (Grant’s Law of Banking, ’ll Law Lib.N. S. 2.) There is nothing of a fiduciary character in the relation between banker and customer. (Id.) In this state it has been repeatedly held, that a depositor in a bank is a general creditor merely. He has no property whatever in the money deposited; that is the money of the banker. (Matter of Franklin Bank, 1 Paige, 249. Chapman v. White, 6 N. Y. Rep. 412. Commercial Bank of Albany v. Hughes, 17 Wend. 94. Downes v. The Phoenix Bank, 6 Hill, 297. Marsh v. The Oneida Central Bank, 34 Barb. 298.)
    5. The referee finds as a matter of fact that the Park Bank paid this draft as the agents of the plaintiffs ; whether they paid as agents or not is obviously not a qu'estion of fact in this case, but of law. The referee finds that the plaintiffs gave certain instructions to the Park Bank, and further that the Park Bank paid the money. These are matters of fact; but whether the act of payment was in pursuance of those instructions, is clearly a question of law, and of law only; because, the instructions themselves are before the court, and their purport is reported by the referee. This being so, the court can judge for itself, as well as the referee, whether the act done was or was not, in pursuance of the instructions given, (a.) The instructions given by the plaintiffs to the Park Bank were simply “to protect their checks on Griggs & Lothrop.” The act done by the’ Park Bank was, to pay, without any inquiry whatever, a bill'of exchange, cut across-its face with a canceling iron, and marked with the figures 8/13, indicating its presentment previously. The payment of this draft was not in pursuance of such instructions given by the plaintiffs, and the latter were not bound by it at all. The plaintiffs knew that they "were not so bound; for one of them (Simms) testified that, to the best of his belief, he was informed of all the facts by which it is now claimed the drawers of the draft were discharged, by “ both Mr. Griggs and Mr. Lothrop,” on “ either the 17th or "18th of August-, 1857;” and that, afterwards, he went to the Park Bank, and went into the president’s (Macy) room, and said to him, “ You have paid a draft that has already been paid and canceled,” and then requested the president to show him the draft. The draft was, therefore, in the hands of the Park Bank, at that time, and has only come into the hands of the plaintiffs since, if it be in their hands. (6.) The legal aspect of the case is, therefore, this: The Park Bank pays $2000 of its own money for this bill of exchange, and as it does so without authority from the plaintiffs, the transaction is upon its own account. The result, therefore, simply is, that the Paris Bank becomes the holder of the bill; and thereupon, the plaintiffs, although knowing every thing, which they know now, in regard to their alleged discharge as drawers, although claiming that the bill had been already paid by the drawees, voluntarily adopt as their own the previously unauthorized act of the Park Bank. The knowledge of the plaintiffs, at the time of the adoption of the unauthorized act, binds them just as much as the same knowledge would at the time of doing it, and as the adoption was voluntary, the payment is the same, and therefore cannot be recovered back. ( Wyman v. Farnsworth, 3 Barb. 369. Mutual Life Ins. Co. v. Wager, 27 id. 354. N. Y. and Harlem, Railroad Co. v. Marsh, 2 Kern. 308. Bilbie v. Lumley, 2 East, 469. Clark v. Dutcher, 9 Cowen, 674. Mowatt v. Wright, 1 Wend. 357, 365. Brown v. Mackinally, 1 Esp. 279.)
    II. The preceding observations, assume, for the sake of' argument, that the drawers of this bill had been discharged, previously to its payment by the Park Bank. They had not, however, in fact, been so discharged. (Russell v. Hankey, 6 T. R. 13. Ridley v. Blackett, Peake’s Additional Cases, 62.)
    1. The check, even of a third person, is not payment, unless expressly agreed to be received as such ; and the onus of proving such agreement is upon the debtor. (Olcott v. Rathbone, 5 Wend. 490. Kobbi v. Underhill, 3 Sand. Ch. 277. Russell v. Hankey, 6 T. R. 13. Ridley v. Blackett, Peake's Additional Cases, 62. (Robson v. Bennett, 2 Taunt, 387. Pearce v. Davis, 1 M. & Rob. 365. Barnet v. Smith, 10 Foster, N. H. 267. The People v. Baker, 20 Wend. 602. Houston v. Schindler, 11 Barb. 36. Cromwell v. Lovett, 1 Hall, 56, affirmed, 6 Wend. 369. The People v. Howell, 4 John. 296. 9 Rich. Law, S. C. 318.)
    
      More evidence even is required, to show that a check was received in payment than that a note was. (5 Wend. 492, per Marcy, J.) Checks are constantly received and receipts given by persons having no discretion whatever, to agree to accept them in payment. They are taken merely for the convenience of business and the accommodation of the drawer. The acceptance of a note is a more deliberate matter. The note of the debtor himself, (and for the same reason his cheek,) is not payment, even if expressly agreed to be received as such, unless it proves to be good. (Frisbie v. Larned, 21 Wend. 450. Cole v. Sackett, 1 Hill, 516. Waydell v. Luer, 5 Hill, 448, and 3 Denio, 410. Elwood v. Deifendorff, 5 Barb. 398.)
    
      2. The check was presented with due diligence. It was not necessary to present it the same day it was received. (Kobbi v. Underhill, 3 Sand. Ch. 277. Veazie Bank v. Winn, 40 Maine, Rep. 60. Merchants’ Bank v. Spicer, 6 Wend. 443. Robson v. Bennett, 2 Taunt. 387.)
    3. Indeed, so far as the debtor himself is concerned, presentment at any time is good, unless damage has resulted to him from the delay'by the failure of the bank in the meantime. Griggs Lothrop, were not discharged by giving-this check, and if they had not given up the draft on the 14th, they could have been compelled to do so by a bill in equity. (3 Sandf. Ch. 277.)
    . IH. The acceptance of the check and surrender of the draft did not discharge the drawers of the draft.
    1. The check was not payment, and therefore did not extinguish the liability, of the acceptor. It was not the acceptance of a new security for and in place of the old. It was taken, without a new consideration, and the bank could at any time return it and demand the draft. If the drawer of the check suffers no damage by the omission of .the person receiving it, that is to say, if it appears that nonpayment does not arise from the insolvency of the bank, the action is maintainable. (Bradford v. Fox, 39 Barb. 205, per Clerke, J. Gallagher’s executors v. Roberts 2 Wash. C. C. R. pp. 191, 193. Downey v. Hicks. 14 How. U. S. 240.)
    2. The acceptance of the check was not an extension of time given to the acceptor; and the check being presented the next day, there was no unreasonable delay. Such presentment would have bound an indorser upon the check, who would be in quite as good a position to insist on diligence in presentment as these plaintiffs are.- [See the cases before cited.)
    
    - 3. It would be unreasonable to hold in this case that the drawers were discharged; because these defendants did not receive the draft at all until the 13th. They/might have omitted altogether to present this -draft on that day, and permitted it to lie in their banking house until the next day, under well settled decisions, and the failure of the drawees during that time would not have discharged the drawer. (Byles on Bills, 45 Law Lib. 63, marg. p. 13, citing Rickford v. Ridge, 2 Camp. 537.)
    
    
      4. English cases cited by the counsel for the plaintiffs to sustain a different view of the rights and liabilities of the holder of negotiable paper from that taken in Russell v. Hankey, (6 T. R. 13,) and Ridley v. Blackett, (Peake’s Additional Cases, 62,) were nearly all decided before and not after the two latter cases. They do not lay down any different rule. There is no later English decision reported, to sustain the view taken in this case by the plaintiffs, and no decision in this state which would be so, unless Kobbe v. Clark, (4 Seld. N. C. Ct. of App. 11,) be so. In Hayward v. The Bank of England, (decided 9 Geo. I,) the note was left without any security for its payment, or evidence of an intention to pay being given, canceled by the maker, allowed to remain in his possession, and a new note accepted. The action was by the owner of the canceled note against the bank for their n egligence as hi s agents. In Howe v. La Costa, the note was surrendered without any check being given, yet the chief justice left it to the jury. (Decided 5 Geo. I.) In Vernon v. Boverie, (Decided 34 Ch. II,) a check given by a merchant in payment of a bill was presented at the banker’s, and part of its amount at the request of the holder, and for- his convenience, paid, in bank bills, which were taken in preference to the coin. The bank failing, it was held that the merchant had paid his bill. In Gillard v. Wise, (5 Barn. & Cress. 134,) notes of one bank ’ deposited in another as cash, and received as such, were presented to the bank which had issued them, not for payment, but simply for credit on account of the bank which had received them, and credited according to the request. Held, that the party depositing the notes was not liable. The case reported in 9 Wend. 122, merely lays down a general rule about extension of time, and has no application; because, although it may not be material whether the security taken be payable in six months, or in one day, it is very material that it was payable immediately, for then there is no presumption that the original demand is suspended. (See Fearn v. Cochran, 4 C. B. 274. Colburn v. Tollis, 14 Conn. R. 341. Crofts v. Beale, 11 C. B. 172. Mecarney v. Stanley, 8 Cush. 85.)
    
    
      5. Mere text writers are not, of course, of sufficient authority to overrule the decisions in Russell v. Hankey and Ridley v. Blackett, even if they expressed a difference of opinion. But Mr. Byles merely says that “ it is doubtful whether the holder of a bill would be sustained in giving it up, upon receiving a check. Hot because those decisions were erroneous, or that they have been overruled, but simply because in his time he did not think it usual to receive a check and give up the bill, and that to do so would be contrary to the usual course of business; for he says: “If a creditor, however, in payment of any other debt than a bill or a note, takes a check, and the banker fails, or the check be dishonored, the creditor’s remedies remain entire.” The plaintiffs, therefore,- are bound to establish that it is contrary to the usual course of business to take checks upon the presentment of bills or notes in order to show that the rule as to them is exceptional and different from that applicable to all other demands. The remarks of text writers quoted upon the subject, have no application to this case, because here the draft was recovered and presented within the time allowed for its presentment by law, and when payment was demanded of the drawers, the draft was ready to be delivered up to them, so that they could not object that they had a right to demand the draft before paying.
    TV. The plaintiffs cannot recover in this action on the ground that the draft should have been protested on the 13th of August, 1857. If the rules of law in respect to protest be not purely arbitrary, it was unnecessary. -
    1. The object of a protest is merely to furnish evidence of the presentment and demand; as in the case of a foreign bill no other evidence is eorbpetent or admissible, it has been said that a protest is indispensable to charge the drawer of a foreign bill. But in this case the reason of the rule ceases, because the plaintiffs themselves proved the presentment and demand.
    2. If the presentment on the 13th was not sufficient to charge the plaintiffs, and if nothing done or omitted in pursuance of it could be alleged or proved for that purpose, it would be clearly inequitable to hold it sufficient to discharge them, if not followed by a protest; and this is an equitable action, and any equitable defense will defeat it.
    3. The -necessity for diligence in protesting rests upon the necessity for notice of non-payment; consequently, where the protest is made iii sufficient season to be the foundation of a notice given within the prescribed period, there can be no ground of complaint on the part of the drawer, the fact of demand being admitted.
    4. Whatever be the rule in regard to protest, the plaintiffs cannot recover back this money upon that ground, because there is no omission to protest alleged or proved; it is not made a ground of recovery in this action; nor have the plaintiffs either alleged or proved that they were ignorant that the draft had not been protested, &c. on the 13th. The only proof offered is, that they were ignorant that it had been protested on the 14th.
    V. An attempt was made to show that the check given by the drawees (Griggs & Lothrop) would have been paid or certified if- presented on the 13th, in order to bring this case within the charge of the judge in Kobbe v. Clark.
    
    1. The only rational construction to be given to the charge in Kobbe v. Clark is, that if the jury should find that the check would have been paid, if presented at any time during banking hours on the day when received, the drawer of the bill of exchange, was discharged; not that he was discharged, if there was a particular instant of time when it would have been paid. The parties receiving it had, at least, the whole, day to present it. In this case, there is no evidence that the check would have been paid, if presented at any time on the 13th. The referee does not find that it would have been, but only that it would have been paid or certified. The certification of a check, which is the mere acceptance of a bill of exchange drawn upon a bank, would not be payment.
    2. But in fact the account was overdrawn, and therefore there was no obligation upon the bank either to pay or certify. The “ arrangement ” made with the paying teller was that Mr. Griggs told him, beforehand, he would probably overdraw; it does not even appear that he assented to this. There being, therefore, neither funds of the drawers of the check in the bank, nor any binding obligation or agreement to permit an overdraft, the testimony on this point has no element of certainty sufficient to entitle it to consideration. Whether the check would be paid depended altogether upon the whim or caprice of the paying teller, who had a right to refuse, but no right to pay. The referee should not have found, upon such testimoney, that this check would have been paid or certified; by so doing he abandoned all judicial inquiry, and entering upon mere speculation, conjectured that the paying teller would have acted contrary to his duty. The evidence in question furnished no basis for the judgment of a court.
    VI. The defendants having acted merely as the collecting agents of the holders of the draft (Lee & Co.) and having paid over the money to their principals, before notice of any claim to recall it, are not liable to refund.
    1. The expression quoted from Story (on Agency) to the effect that if the authority of the agent to receive the money “ was known to himself to be utterly void,” the fact that he has paid it over will not be a good defense, has no application here. It refers to a case where the principal directs an illegal act.
    But there is nothing- illegal in the holder of a bill of exchange demanding or receiving the amount from the drawer, even though it turn o,ut that the demand could have been legally refused. The discharge is a matter in personal exoneration of the surety, which he may either waive or avail himself of. His contract is not thereby made void; it is voidable only at his election. A sufficient moral or equitable'consideration remains, to support a promise to pay,, without any new consideration. In an action of this kind, brought to recover back the money (in which action the plaintiff may be defeated by any equitable consideration) the authority given by the holder of a draft, to ask payment of the drawer, cannot be held to be utterly vóid. In this case the authority was given to the holders of the draft (Lee & Co.) by the plaintiffs themselves, and by Lee & Co. to the defendants. It could not emanate from any source more capable of conferring a valid authority in the premises.
    2. It does not appear that the defendants were aware, for what account the draft was to be paid, when presented to the Park Bank; that is, to whom the payment would be charged by that bank, or whether to any one but themselves. Por all that the defendants could know, the payment by the Park Bank might have been on account of the drawees (Griggs & Lothrop.) If the defendants had known, which is not proved that they did, that the payment by the Park Bank was on account of the plaintiffs, they could not know but that the latter had waived their supposed discharge; and the legal presumption in such a case would be that they had done so. Neither is it shown that the defendants knew that the plaintiffs were ignorant of the existence of the facts upon which they now rely to establish their discharge.
    3. The presumption of law is that when the defendants remitted money to Lee & Co, by the payment of drafts drawn by the latter or otherwise, they did so, not as an advance upon some possible future transaction, but in payment of an antecedent debt.. (Greenl. Ev. § 112, and cases there cited.) (a.) The defendants having acted as collecting agents, it was their duty to pay over the money received upon the specific security sent them for collection; and the court must consider the very next payment made to Lee & Co. as being on that account. (5.) Where the latter overdrew their account, the amount actually overdrawn only is to be considered as an advance, and the rest on account of the collections already made, or of a debt due. The fact that the parties subsequently had other transactions, and that sometimes balances stood to the credit of Lee & Co. cannot make any difference, because the transactions out of which the balances arose had no connection ; they were entirely separate and independent of each other and of it, although, of course, entered in one account. (Addison on Contracts, p. 650. Story on Agency, § 300. Horsfull v. Handley, 2 Moore, 5. Mowatt v. McLelan, 1 Wend. 173. Morrison v. Currie, 4 Duer, 79. La Farge v. Kneeland, 7 Cowen, 457.)
    VII. To meet this defense of agency and payment over, it is contended, that the defendants were wrongdoers, and that it was illegal for them to receive the money. The plaintiffs, if they intended to rely upon any wrongful act or omission on the part of the defendants, were bound to say so; and the referee, if he intended to base his judgment thereupon, was bound to find something of the kind. As there was no force or duress in this case, there can have' been no wrongdoing except fraud; but the burden of charging as well as proving fraud is on the party claiming to have been defrauded. (Fisher v. Fredenhall, 21 Barb. 84. Bailey v. Rider, 10 N. Y. Rep. 363. Robinson v. Stewart, Id. 189. Chautauqua Co. Bank v. White, 2 Seld. 237. Tyler v. Canaday, 2 Barb. 164.)
    1. This omission in the complaint is not covered by. the provision of the Code, (§ 168,) that new matter in an answer, not constituting a counter-claim, is to be considered as controverted as upon a direct denial or avoidance as the case may require. The case of a plaintiff is made by his complaint; all evidence in the cause on his part is to sustain that, never any thing other or different. There must be no departure from the complaint. That section would apply here, in this manner. The defendants allege as a defense that they were merely collecting agents, and have paid over the money. The plaintiffs are considered by law as so far denying or avoiding this, that they might show that the defendants were not agents, or had not paid over the money, or that the money had again come into their hands. But such section -does not operate to subject a party to be convicted of a fraud in an action on contract, where he can have no notice that he is charged with it.
    2. The referee finds, with great particularity, all the facts upon which the claim of fraud is founded, but he does not find any fraudulent intent. Intention is an essential element of fraud, and ought to be alleged, because it is the gist of the plea, and would have been traversable. (Moss v. Riddle, 5 Cranch, 571. Van De Sande v. Hall, 13 How. Pr. 458. Devendorf v. Beardsley, 23 Barb. 666.) A mere misrepresentation, without a fraudulent design, is not sufficient. (Wakeman v. Dalley, 44 Barb. 502.) Fraudulent intent is always a matter of fact. (Id.) Although, undoubtedly, what representation will amount to a fraud, is a matter of law.
    3. The counsel, and the referee in his opinion, confound two matters very different in their nature; namely, collecting a claim which, if resisted, could not be legally enforced, and obtaining money in violation of law. It is the latter only which is wrongful or illegal. A claim barred by the statute of limitations cannot be legally enforced, and yet it is perfectly right for a party to demand its payment.
    YUI. In this case, upon the evidence, there was no fraud on the part of the defendants. To establish fraud, it should be shown that the misrepresentation or concealment was made with á fraudulent design ; that it was material; that it was acted upon, and that the injury complained of was the direct result of it. (2 Parsons on Cont. 771, and cases there cited. Willard’s Eq. Jur. 149, and cases there cited. Corbet y. Brown, 5 Craig & Phillips, 363.) In the next place, it must appear, not only that the injured party did in fact rely upon the fraudulent statement, but had the right to rely upon it in the full belief of its truth. (2 Parsons on 
      
      Cont. 773.) Applying these principles to this case, no fraud is established here.
    1. The date of the protest or notice is not at all material, nor is the notice itself any evidence of fraud. Neither the notice nor its date had any thing whatever to do with the payment of this draft.
    . 2. There was no fraudulent intent on the part of the bank. The misdating was the notary’s own act, not concurred in by, or communicated to the bank, (it.) A notary is not a private agent, but a public officer. The act of protesting is the official act of a public officer, and for any thing done, in connection with it that officer is responsible. So that the date does not show any fraudulent intent on the part of the defendants, because if such intent .existed, the idea would have proceeded-from the defendants in the first instance. And as for the notary, he frankly stated that the idea was his own. (5.) The notices were not sent through the bank, and their attention was no.t called to the date of the certificate. An act of A, emanating from himself, dictated by his own sense of propriety, is no evidence of an intent in the mind of B.
    3. Eraud in judicial proceedings can never be predicated of a mere emotion of the mind disconnected with an act occasioning an injury. (The People v. Cook, 4 Seld. 67.) Therefore, if' the misdating of the notice of protest was not the cause of the supposed injury in this case, that is, if it was not the cause of the payment of the draft, it furnishes no basis for inferences of fraudulent intent. It would not in any case be sufficient for the plaintiffs to show that the protest was misdated by the notary, and in that condition returned to the bank. They must, as one of the first steps in their case, show that when sent to Josiah Lee & Co. it bore such erroneous date, and that it was so sent with a view of deceiving them.
    4. It is not to be assumed that the defendants acted fraudulently, even supposing, for the purposes of the argument, that it would have been a fraud in the defendants to transmit the protest misdated. The presumption is that they performed their duty to their principals, and this presumption has to he rebutted by strong and cogent testimony.
    5. The presumption against fraud is so strong, that even when the wrong can only he established by proving a negative, that negative must be proved by the party alleging the fraud; notwithstanding the general rule of law, which devolves the burden of proof on the party holding the affirmative. (Grreenleaf on Evidence, 935, citing Williams v. East India Co., 3 East, 192; see also Rex v. Howkins, 10 id. 211; Powell v. Milburn, 3 Wils. 355, 366 ; Sissons v. Dixon, 5 Barn, & Cres. 758; Rodwell v. Ridge, 1 Car. & Payne, 220.) This arises from the obvious necessity of the ease, for the plaintiffs must show, not only that false representations were made, but that they were believed and acted upon, and that the wrong was the direct result of their having been believed and acted upon. The actual deception resulting in injury must be shown. (See the numerous cases before cited.)
    
    6. Again, this draft was, in point of fact, protested. It was not false to say that. Fraud arises from the misrepresentation of a matter of fact; here, th'e fact supports the alleged representation. As to what was the legal effect of the protest, that is another matter. The plaintiffs have the affirmative here, yet they cannot show any case where the implied assertion of the legal effect of an instrument, or of its legal validity, was held to be an actual fraud. The maxim, ignorantia juris non excusat, has no application here. Courts must necessarily recognise the existence of doubtful points of law, since the compromise of claims involving them is allowed to be a good consideration for a promise, and to sustain an agreement between litigating parties. (Broom’s Legal Maxims, 75 Law. Lib. N. S. 186. Martindale v. Falkner, 2 C. B. 719, 720, Eng. Com. Law. Rep. Wade v. Simson, 1 C. B. 610, Eng. Com. Law. Rep. 50.)
    7. The mere act of protest, disconnected with the communication of the information of it, which is the subject just considered, is of no consequence; for if we caused this protest to he made, but never communicated that fact to any one, no question of fraud could arise.
    8. If Lee & Co. were deceived, that would be no fraud upon the plaintiffs, even though the former communicated the intelligence of the protest, relying upon the information received by them from the defendants, (a.) The defendant's were in no relation of trust, confidence or duty to the plaintiffs; neither were Josiah Lee & Co. The latter had rights upon the dishonor of the draft, and to protect them, notice to the plaintiffs may have been necessary; but it was entirely optional with them whether they would or not, seek to hold the plaintiffs upon the draft. (5.) Lee & Co. being themselves the holders and owners of the draft,"did not convey the notification to the plaintiffs in order to secure themselves against a' claim upon it; the notification was not in consequence of any claim of the defendants upon the bill. Whatever may be the rule where the holder notifies a party liable, and that party notifies the next,- it has no application here.
    9. If Lee & Co. had a right to rely upon information communicated by the defendants, that right did not arise upon the bill itself therefore, the plaintiffs had no privity with Lee & Co. in respect to it. Lee & Co. being themselves the owners of the bill, the notification of its protest was given by the defendants to' them, simply because the defendants were their collecting agents, not in consequence of any right or contract founded upon the bill itself. It follows, that the supposed deceit being in the execution of a contract with which the plaintiffs had no concern, and under which they had no right, any notification hyLee & Co. came from them as the first and principal parties, and that they only are responsible to the plaintiffs for it. In Hamilton v. Cunningham, (2 Brock. 350,) it.was held that an agent appointed to collect a bill of exchange does not hold the same relation' to his principal as the holder of a bill of exchange does to the drawer.
    10. In fine, J. Lee <f> Co. in this matter were the principals 
      and the defendants were only their agents. Although the principal may in a proper case be liable for representatipns made by the agent, there is no rule which makes the agent liable for representations made by the principal. The defendants would be the agents of Lee^ & Go. for the purpose of notifying the plaintiffs, but of course it does not follow that Lee & Go. would be the agents of the defendants for that purpose. The stream does not run backward.
    11. The payment by the Park Bank was made without any representation whatever, but simply upon presentation of the draft. Mr. Worth says explicitly, that nothing was said by the person who brought the draft; it was merely presented for payment;" he noticed nothing to indicate either that it had been paid or protested. Mr. Macy says, that he had no recollection whether he saw the person, who brought the draft or not, and that he knew nothing about the protest.
    IX. The plaintiffs cannot recover in this action, because they have brought it without returning or offering to return the draft which they received for the money. They should at least offer to do so in their complaint, but they have not done so.
    1. If the draft were a liability of the defendants themselves, the plaintiffs might be entitled to return it upon the trial; but being the liability of a third person, it is property delivered by the defendants to the plaintiffs as the consideration for this money, and the plaintiffs cannot recover back the money without first returning or offering to return that which they received for it.
    2. It makes no difference whether this draft is of value to the plaintiffs or not; it is sufficient that it is to the defendants. Nor can this court consider the question of how much or of what value it is to the defendants; for the plaintiffs cannot dispute, nor the court try as part of thé issues in the case, the rights of the holder of this. draft as against Griggs & Lothrop, nor the value of it to the defendants, as a voucher or otherwise, as against Lee & Go. in case the defendants refunded this money. The money was paid for this draft, and would not have been paid without its delivery, and the plaintiffs have 'no right to demand the money, but retain the draft. [The Matteawan Co. v. Bentley, 18 Barb. 641. Moyer v. Shoemaker, 5 id. 319. Fisher v. Fredenhall, 21 id. 84. Baker v. Robbins, 2 Denio, 136. Fisher v. Conant, 3 E. D. Smith, 199. Jewett v. Petet, 4 Mich. Rep. 508. Cook v. Gilman, 34 N. H. Rep. 556. Smith v. Doty, 24 Ill. Rep. 163. Tisdale v. Buckmore, 33 Maine Rep. 461.)
    
      Churchill Woodbury, for the respondents, plaintiffs.
    I. By reason of the failure of the appellants properly to present for payment, and to collect the bill of exchange on ■ the 13th day of August, 1857, the drawers, “ The Washington City Savings Bank,” were discharged from their liability upon it, and their discharge could not be affected by any subsequent proceedings on the part of the appellants. The appellants accepted the drawees (Griggs & Lothrop,) for their debtors, and discharged the drawer’s and indorsers of the bill. (Edwards on Bills, 551. Byles on Bills, 4th Am. ed. 16. Chitty on Bills, 12th ed. 368. Story on Prom. Notes, § 389, and note 5. The Merchants’ Bank of Baltimore v. The Bank of Commerce in New York, Maryland Court of Appeals, October, 1866. Commercial Bank of Penna. v. Union Bank of New York, 1 Kernan, 203, 214. Kobbe v. Clark and others, N. Y. Court of Appeals, 4 Seld. notes, 11.) Nearly all the English cases are referred to in the text books just cited. Some of the early cases seem to countenance the exercise of much discretion on the part of persons haying bills and notes to collect; but the later cases hold them to a strict accountability, and throw the risk of the result upon them, if they take any. thing but gold and silver or their equivalent in payment. All the text writers support the same view. The principle that the giving of a check, which is subsequently dishonored, is not payment, as between the person who gives it and him who receives it, is not involved. The rule is conclusively established in the case of Kobbe v. Clark, 
      
      {ubi supra,) that as respects the drawer and indorser of a bill, they will be discharged by any laches on the part of the person holding it for collection.
    II. The appellants, having obtained possession in the manner stated, and as fotmd by the referee, on the 17th day of August, 1857, of the sum of $2000 belonging to “ The Washington City Savings Bank,” are liable to repay the sum with interest to the respondents.
    1. In theory, an action such as the present is one for money had and received. The law implies a promise on the part of the person receiving the money to pay it to the rightful owner, and this implied promise and the consequent liability exist from the very moment the money is received.
    2. In point of fact, however, there was no contract between the parties. The appellants were wrongdoers from the commencement, and there was no “ meeting of minds ” between them and the respondents, such as the word “contract ” implies.
    III. There are three answers to the defense of the appellants, that they received the amount of the bill of exchange as agents, and paid it over to their principals before any demand was- made upon them by thedrawers for a return of the amount collected, and that their liability, if any, has ceased.
    1. The appellants did not receive the amount of the bill of exchange as agents. They were the agents of Josiah Lee & Co. for the purpose of collecting the bill, and for no other purpose. Their subsequent proceedings in getting up a fictitious presentment and protest.of the bill, and in sending notices of a protest which had not taken place,'to the drawers and indorsers, were not within the scope of their agency, and were taken on their own account, and as an effort to retrieve the loss which they alone had sustained by reason of their negligence. They charged J. Lee & Co. with the amount of the bill and protest, but they had no right to do it. J. Lee & Co. as well as the respondents, were deceived and°misled. When they received the protested draft” they undoubtedly supposed that it had been regularly protested, and that they were liable, as indorsers, upon it.
    2. The appellants did not pay over the amount received by them trom the Park Bank to their principals, Josiah Lee & Co. before the demand was made upon them by the drawers; and further, it did not appear that thé amount had ever been paid over, (a.) It appeared as .matters of fact, that J. Lee & Co. had a running account with the defendants, (doing business with them every day,) from five or six years before August, 1857, until' after May, 1858, during all which time they were in good credit with them; that the account was never balanced, except on or about the first day of each month; on the first day of e4ch month, after August, 1857, the balance being in favor of J. Lee & Co., "and was never closed until J. Lee & Co. failed, and after May, 1858; that the entire amount of each day’s remittance was passed to the credit of J. Lee & Co. and their drafts were paid, without regard to whether or not such amount had been collected, and no remittance of any separate item was ever the basis of a special credit against which, and by virtue of which alone, J. Lee & Co. could draw upon the defendants, and no payment was ever made on the strength of any particular collection made or to be made. That the overdrafts which the defendants paid were based upon the general credit of J. Lee & Co. coupled with the expectation, derived from a previous course of dealing, that such overdraft would be met by subsequent remittances; and that they paid over to- J. Lee & Co. the amount received from the Park Bank, merely by crediting it in account. The appellants, therefore, had not paid over to their principals the sum in question, before the demand .was made upon them by the drawers. (Buller v. Harrison,Cowper, 565. Edwards v. Hodding, 5 Taunt. 815. Cox v. Prentice, 3 M. & S. 344. LaFarge v. Kneeland, 7 Cowen 456. Mowatt v. McLelan, 1 Wend. 173. Goddard and St. John v. 
      The Merchants’ Bank, 2 Sandf. 247, 254. Smith’s Mer. Law, 199, 200, 201.) (b.) Money may "be recovered' from an agent provided he has not paid it to his principal, or altered his situation in relation to him; for instance, by giving fresh credit. (LaFarge v. Kneeland, 7 Cowen, 469.) The ground on which agents' have been held liable in such cases is, that there has been no change in the relative situation of the parties. Where there is a mere passing of credit on the books, for instance, the agent still has it in his power to redress himself. (Mowatt v. McLelan, supra. Goddard and St. John v. The Merchants’ Bank, ubi sup. p. 254.) The account must be “ adopted and agreed to,” (Holland v. Russell, 30 L. J. N. S. pt. 2, 308,). or “ settled.” (Same v. Same, 32 id. 297.) (c.) There was no evidence that the amount has ever been paid over. The account was closed when J. Lee & Co. failed but there is no evidence of any settlement. An account remains open until there has been a settlement. (Mowatt v. McLelan, ubi sup.)
    
    It is true that an account rendered becomes an account stated if not obj ected to within a reasonable time. (Lockwood v. Thorne, 1 Kern. 170, 18 N. Y. Rep. 285.) This rule is based upon the supposed intent of one party in rendering the account, and what good faith requires of the other, who is charged with knowledge of- the intent with which it is rendered. But the inference is not conclusive, and may be repelled by evidence of the course of dealing between the parties. (18 N. Y. Rep. 285.) In this case it is clear that the bank remitted the monthly accounts, not as final and conclusive, but to show the apparent state of affairs. From the nature of the dealing between the parties many items were liable to change.
    An account stated can be opened in case oí fraud or mistake. (Philips v. Belden, 2 Ed. Ch. 1.) There was no evidence that J. L. & Co. ever knew the facts relative to the failure of the defendants to collect the bill, and their subsequent proceedings. Until it is shown that J. L. & Co. have settled with the defendants, on the basis of these accounts, and with the knowledge of all the facts,- the accounts remain open. The appellants’ witness was not asked whether they had. thus settled, and therefore, there was no necessity to cross-examine him upon that point.
    3. The appellants were wrongdoers, and, therefore, the fact of their having, as agents, paid over the money cannot protect them.
    The right of action in favor of the "Washington City Savings. Bank was instantaneous and perfect on the payment of the money by the Park Bank to the appellants. No notice from the savings bank to the appellants not to pay it over to J. L. & Co. was necessary. No demand of the money by the savings bank upon the appellants was necessary in order to vest in the savings bank a right of action.
    An agent is protected by reason of- his having paid over to his principal money collected by him only in a case where it is voluntarily paid to him, (under a mistake of fact,) with the- expectation and intention that it shall be paid over to the principal. . There was no voluntary act on the part of the savings bank. The money was not “paid” to the appellants ; the term “payment” can only be properly used in a case wher'e there is a “meeting of minds ” between two intelligent parties. There was no expectation or intention as to the use of the money; on the.contrary, the money was illegally obtained by the appellants, under circumstances not constituting a case of mutual mistake, (1 Story’s Eq. §§ 140-144,) but under a semblance of facts created by the appellants, which they knew were not the. real facts, but which the savings bank and its agents believed, under the circumstances, rightly to be so.
    . • The law of principal and agent is not in the case. As the appellants obtained the money illegally, and as their liability to Josiah Lee & Co. by reason of their failure to collect the bill, was already fixed, they were not obliged to pay it over to them. (Ripley v. Gelston, 9 John. 201, Snowden v. Davis, 1 Taunt. 359. Frye v. Lockwood, 4 Cowen, 
      454. Townson v. Wilson, 1 Camp. 396. Tugman v. Hopkins, 4 Man. Gr. 389, 403. Townshend v. Dyckman, 2 E. D. Smith, 224. Clinton v. Strong, 9 John. 370. Law v. Nunn, 3 Kelly, 93. Bank of the United States v. Bank of Washington, 6 Peters, 8. Colvin v. Holbrook, 2 Comst. 126, 129. Wright v. Eaton, 7 Wis. 595, 608. Elliott v. Swartwout, 10 Peters, 137, 156, 157. Seidel v. Peckworth, 10 Ser. & Raw. 442. Sharland v. Mildon, 15 L. J. N. S. pt. 1, Chancery Cases, 434. Story on Agency, § 300, 5th ed. Smith’s Mer. Law, 201, 3d ed. 2 Liv. on Agency, p. 262, 3d ed. 1818. Paley on Agency, 306, n. 8. Id. by Dunlap, 389 and notes.)
    
    It is not necessary that there should be a. fraudulent intent on the part of the person claiming to act as an agent in order that he should not be protected by reason of his having paid the money over. In the first six cases just cited, it appears affirmatively that there was no such intent. In one case it was expressly held that innocence of intention does not excuse; and in but one or two .does it appear that the wrongdoer knew that he was doing wrong. The decision in every case turned upon the fact that the act of the agent was illegal, that' the payment was not voluntary, and that the right of action on the part of the person wronged was instantaneous and perfect without showing any notice. (See particularly Tugman v. Hopkins, Ripley v.Gelston, Townson v. Wilson, Bank of the U. S. v. Bank of Washington, Wright v. Eaton, Townshend v. Dyckman, Smith’s Mer. Law, and Story on Agency, as above cited?) All the cases so cited were in assumpsit or debt, or suits in equity.
    IY. It was not necessary that the respondents should make a tender of the bill to the appellants, to enable them to maintain this action.
    1. The appellants could not have obtained the money from the Park Bank without giving up the bill. This was one of the series, of consequences naturally resulting from and contemplated in their illegal proceedings. To require an immediate tender of the bill as a condition of maintaining an action for the money would be absurd. But the right of .action was instantaneous and perfect on the receipt of the money by the appellants from the Park Bank. (See cases before cited.)
    
    2. A tender is necessary only in the case of a contract. There a party who wishes to disaffirm it must return whatever he has received under it.. Otherwise he cannot treat it as rescinded .and hold the other party for a breach. (Masson v. Bovet, 1 Denio, 69, 74.) The respondents never had any contract with the appellants and have nothing to rescind. The latter are wrongdoers, and themselves placed the bill in the hands- of the respondents’ agent. It is not reasonable that an innocent party should be required to follow up a wrongdoer, and conciliate him, before he can seek redress for the injury he has caused.
    3. Even the tender made at the trial was entirely unnecessary. The bill was offered as a matter to which fhe respondents made no claim.
    V. In all these matters the respondents were entirely innocent, and were deceived and misled by the appellants. They have sustained a loss, and, so far as appears, the appellants have enjoyed a corresponding gain.
   By the Court, Robertson, Ch. J.

The counsel for the plaintiffs in his points and on the hearing expressly repudiated this action as being one to recover back money paid merely by mistake; nor have I been able to discover how it could be sustained against the defendants under that aspect. Their principals, (Leé & Co.) may be liable on that ground, because they made the only communication to the plaintiffs, (a telegram,) which tended to mislead them'; none that emanated from the defendants ever reached them. The complaint contains a series of allegations, ending in a charge of fraudulent misrepresentation and concealment on the part of the defendants which would be wholly out of place in an action founded on mistake. Lee & Co. might possibly have become liable to the plaintiffs, if the surrender of the draft for the check of Griggs & Lothrop were in law a payment of the former, although they knew nothing of it, upon the ground of mutual mistake, under the cases of Durkin v. Cranston, (7 John. 442;) Canal Bank v. Bank of Albany, (1 Hill, 287;) Bank of Commerce v. Union Bank, (3 N. Y. Rep. 230,) and other kindred ones. But no recovery could have been had on that ground against the defendants, because before any demand or notice by the plaintiffs, which was not made until December, 1857, they had paid over such money to their principals, by crediting it in their accounts, which were such that the latter were left indebted to them nearly $3000 on the 26th of August, 1857. For I presume it will hardly be contended that the agents should have paid over the actual money received, or its precise amount, in order to acquit themselves of any further responsibility, provided it was set off against other claims due them before any notice from the plaintiffs and the accounts were balanced.

This action, then, is one emphatically and wholly for deceit, practiced by the defendants; for which they are to be made responsible, as the plaintiffs claim, whether they committed it forthe benefit of others and paid the funds over, or not.

The complaint does not confine itself to claiming a discharge in law of the draft by its mere surrender and the receipt of the check for it, but adds averments that all other checks drawn on the same bank by Griggs & Lbthrop on that day were paid, and that it would have also been paid if presented. It also avers the ignorance of the plaintiffs of any demand when such check was given, and their . belief of the regularity of the second demand; brought about by some acts alleged to be previously stated. The only acts so stated are: such second demand and the dispatch of notices of non-payment to them (which was immaterial, as they never received them.) It avers the concealment of the alleged prior payment from the Park Bank by the defendants ; and their inducement of the bank to pay such draft, relying upon u such representations and concealments” whatever they were. It does not clearly appear by such complaint what such representations ” were. The only previous statements, alleged to have been made to the plaintiffs, were. those contained in the notices of protest, which were perhaps what was intended. Such notices, however, were merely those of a notary in the ordinary course of his business, and as was proved by one of the plaintiffs (Johnson) and their clerk (Walker) never reached them. The only statement which could in fact mislead the plaintiffs was the before mentioned telegram of Lee & Co. with which the defendants had nothing to do, transmitted after the second demand, upon receiving which, and not until then, the former immediately requested the Park Bank to pay their checks on Griggs & Lothrop. There was not a particle of evidence adduced on the trial to show that the defendants made any representations ■ when they presented the draft for payment to the Park Bank; on the contrary the cashier of that bank testified that nothing was said when it was presented. The only deceit practiced by the defendants, therefore, for which the plaintiffs can claim to make the defendants liable, proved in the case, (if that be one,) is their failure to disclose to the Park Bank, the prior supposed payment of such draft by its surrender and the receipt of the check of Griggs & Lothrop therefor.

- The defendants present three principal grounds of- defense to their liability 'for the money paid by the Park Bank, in consequence of any deceit practiced by them, of which if any one is tenable, the judgment recovered in the action cannot be sustained. They are as follows:

First. That neither the plaintiffs nor any one but assignees of the Park Bank can recover back from the defendants the moneys paid by the bank to them. That it was not alleged in the complaint, found by the referee, or established by evidence, that such payment was made out of any moneys belonging to thp plaintiffs. Eor if, as is contended, such draft had been previously paid, were they liable to reimburse the bank therefor under any arrangement between them whatever which appears in evidence.

Second. That there was no evidence in the case of any agreement by the defendants, to accept the check of Griggs & Lothrop in absolute discharge of the original draft, beyond the mere fact of the surrender of such draft and receipt of such check. That such mere surrender and receipt does not, per se, in law create- an unconditional agreement to receive such check absolutely in payment of the draft, nor, standing alone, is it evidence thereof. That a condition is attached by law to the agreement presumed to be created by such surrender and receipt, to wit, that the maker has reason to believe that the check will be paid if presented in proper time. That no such presumption arises if the makerhas reason to believe that the check will probably not be paid if so presented. And that the evidence in this case showed that the drawers neither had funds in the hands of the drawees to meet such check or other reason to believe it would be paid.

Third. That the defendants, receiving the amount in question, as mere agents of Lee & Co. upon a new employment by the latter, after the draft had been returned to them and without any knowledge of the notice sent by telegraph by the latter to the plaintiffs upon which the latter requested the Park Bank to pay their checks, or any prior communication by them to the plaintiffs, were under no more obligation to communicate to such bank the prior dealings with Griggs & Lothrop, than any other agent selected by Lee & Co. for the same purpose would have been. They were bound like any other messenger to do simply what they were instructed to do, to wit, to present the draft for payment and receive the amount. Such a suppression was therefore not a fraudulent concealment.

It is to be borne in mind, in examining these grounds of defense, that the character and aspect of this action is entirely different from one brought by the holders of a draft' or bill of exchange against an unfaithful collecting agent for negligence in not taking the necessary steps to charge the parties to the draft or collect the moneys, and the plaintiffs are required to go further in their proof. It is an action to get back money alleged to have been paid by the drawers of a draft, or others for them, in consequence of a fraudulent imposition upon them by the defendants, after the draft had been already paid by a check of the drawees. In such case the onus of proof lies on the plaintiffs to establish their whole case, as well that the draft was paid by such check as that the defendants induced them to believe it had not, and therefore that any condition upon which such check was taken as payment was not only fulfilled, but known to the defendants to be so.

In reference to the first ground of defense, it,, is to' be observed that the complaint does not allege, nor has the referee found, that the draft in question was paid by the Park Bank; out of moneys of the plaintiffs. That point does not appear to have been urged on the trial, and it certainly was- not, on the argument before us. The complaint only states a request of the plaintiffs to the bank “ to protect their checks ” on Griggs & Lothrop, and 'the payment of such draft, pursuant to such request, by the bank. The referee finds the fact precisely in the s,ame words, notwithstanding there was only one request proved, and that was to protect their unpaid checks. Indeed, there was no satisfactory evidence that the bank paid as mere agents of the plaintiffs even if a check be a specific appropriation of a deposit. The testimony of Mr. Macy,_ that the defendants “ had funds all the time in the hands of the Park Bank, which they were drawing against, and the bank paid out of those funds,” clearly referred only to previous drafts on the bank and not to this draft on another person. The paying teller of that bank (Worth) testified that “the amount of that draft was charged to the drawers and they accounted to the bank on the basis of that charge,” implying rather a credit given than a payment from funds on hand, and these'.two were the only witnesses on that subject. Even assuming that the plaintiffs proved that the draft in question was paid out of their funds or that they would become liable to the bank for the amount in question, upon a request by them, the former, to pay such draft, they never made such request. Their only request in evidence is the telegram of the 15th of August, which did not include all checks, but only those “which might not have been paid.” This was not accidental, since one of the plaintiffs (Johnson) testified that they meant to confine the bank to unpaid drafts. Upon such a limited authority, the plaintiffs could not be made liable to the bank for paying the draft in question; nor were the latter thereby authorized to use any funds of the plaintiffs for the purpose. Undertaking such agency, the bank was bound to see that the authority was strictly followed.- The difficulty of ascertaining the fact was immaterial. Besides, there could not have been much difficulty in learning from Griggs & Lothrop, what drafts of the plaintiffs upon them they had paid. Yet they took no steps for the purpose, although the draft had been mutilated by a cancelling iron. Under such a direction, their voluntary payment of such a draft, now claimed to have been been previously paid, could give them no rights against the plaintiffs. That negligence certainly surpasses any of which the defendants were guilty in taking the check of parties in good standing and sending it to the clearing house for collection. If any artifice had been practiced by the latter upon the Park Bank to induce them to believe the draft not paid, it might have made them liable to the latter, but not to the plaintiffs, who had fully protected themselves by special and limited instructions.

As to the second ground of defense, whatever may 'be the. language of elementary writers, (Story on Bills, § 419; Chitty on Bills, 433, 434,) no case has gone so far as to hold that the bare exchange of a check for a draft discharges the parties to the latter, so as to leave its holder to his remedy on the former only. Nearly, if not quite, all the cases -in which a question has arisen as to the effect of taking a check in place of a draft, and surrendering' the latter, have been suits by the owners of the drafts against their agents for neglect in collecting them or charging the drawees. I cannot, however, agree with the learned counsel for the plaintiffs, who claims in his points, as he contended in his argument, that the effect as a payment of a draft of, “giving a check (for it) which is subsequently dishonored, * * as between the person who gives it and him who receives it, is not ” the only question involved, but that the rigid rules which makes a collecting agent liable for neglect of duty, are to be applied. All the cases to which he referred were those where the question was between principal and agent, and not between the holder and parties to a draft. As regards such parties, it has been settled law, in this state, for over half a century, since the ease of Johnson v. Weed, (9 John. 310,) decided in 1812, confirmed by numerous decisions, that the mere acceptance of a negotiable instrument for a debt, whether on a negotiable instrument or not, is not per se without a distinct agreement to receive it as such, a payment of such debt. (Porter v. Talcott, 1 Cowen, 384. Olcott v. Rathbone, 5 Wend. 490. Kobbi v. Underhill, 3 Sandf. Ch. 277. Cromwell v. Lovett, 1 Hall, 56. S. C. 6 Wend. 369. Vail v. Foster, 4 N. Y. Rep. 312. Turner v. Bank of Fox Lake, Ct. of Appeals, N. Y. March term, 1867; 2 Transc. App. 344.) In Johnsons. Weed, {ubi sup.) where a note of a third person had been taken for goods sold, the court said there must be a clear and special agreement that the vendor should take the paper absolutely as payment, or it will be no payment if if turns out of no value.” In the long posterior case of Olcott v. Rathbone, (ubi sup.) Marcy, J. said, in holding that a receipt of a check and a new promissory note for a prior note, was ho evidence that they were taken in payment, “ The mere giving up of a note is no satisfaction of it; it is not an act which, of itself, affects its validity.” In the very recent case of Turner v. Bank of Fox Lake, (ubi sup.) the defense of a drawer of a draft sued upon, was, that it was given for a former draft paid, as he claimed, at the time of giving such new draft, by the receipt of the check of the drawer therefor although the latter, not being presented until the day after its date, was then dishonored, of the giving of which check he was ignorant when he gave the draft sued upon, is a case very like the present. The court there said (Grover, J.) that, “so far as the drawee was concerned, it was clear the check was no payment,” and that it was “to be regarded as equivalent to the taking by a creditor from Ms debtor of an obligation of a tMrd person, which, it was settled, was no payment.” It relied for that principle on the cases of Porter v. Talcott and Vail v. Foster, before cited, which are hardly as strong as some of the others. There is, therefore, no.room to doubt that it is incumbent upon a party, who seeks to establish that a draft had been satisfied by a check, to prove a separate special agreement to that effect by affirmative evidence, beyond the mere acceptance of the check and surrender of the draft.

Still it may be contended that a holder of a draft, who surrenders it on receiving a negotiable instrument therefor, without any positive agreement to accept it in satisfaction, may, by the fact of accepting such instrument, assume the duty towards those giving it, or those liable on the draft surrendered, of taking the proper steps necessary to charge the parties to such new instrument, by the neglect of which, he may make such instrument his own, and thereby virtually be estopped claiming the original draft; and perhaps the law in such case is not very clearly settled. That doctrine would make the receipt of the new instrument a payment of the old, unless such necessary steps be taken. As between the maker and holder of a check, the former is only discharged from liability by a failure of the latter to present it the next day after it is made, if payable in the place where given, there seems to be no good reason why any one who takes it for an antecedent debt or prior instrument should be held to a greater degree of diligence. Some cases, however, appear to hold that the taking of such check, in place of. a draft, imposes on the receiver of it the duty of demanding payment of it, not only with the ordinary diligence necessary to charge the maker, -hut with the utmost practicable diligence, by presenting it for payment on the very day it is received, unless some excuse is shown for not doing so. The opinion of the general term of this court in the case of Kobbe v. Clarke, reported in Selden’s notes of Appeal cases, (vol. 4, p. 11,) seems, however, to be the only one relied upon for that principle, where the action has been against one of the parties to the draft. The remarks of Campbell, J. in that case that, so far as the drawees of the draft in question, who were the defendants, were “ concerned, the draft was paid.” The plaintiff took their check and gave up the bill. “ The check was good at the time, and would have been if presented the day it was given,” must be looked- upon as obiter dicta, for the escape of the defendants from liability was put on no suph grounds, either at the trial or by the court of last resort, to which an appeal was taken. On the trial the exemption of the defendants from liability was made to depend upon a finding by the jury of either of two questions in his favor, which were, (1,) whether the drawees of the draft in question would have paid cash for it if their check had been refused ; and, (2,) whether the check would have been paid if presented the same day it was given. The propriety of submitting those questions to the jury was made the sole question in the Court of Appeals, and it was there upheld. So that it cannot be considered as authority for any thing beyond the precise point decided in it. Indeed, if looked upon as valuable, authority at all, it is somewhat singular that it did not find its way into a regular volume of reports.

Other subsequent eases haye upheld the necessity of presenting a check the same day it is received, in order to test its goodness, but they are all eases of actions by a principal against an agent for negligence in collecting. The most prominent ones are, The Commercial Bank of Pennsylvania v. Union Bank of New York, (11 N. Y. Rep. 214,) and Nunnemaker v. Lanier, 48 Barb. 234,) wherein the effect of receiving a check in exchange for a draft upon the liabilities of the parties was incidentally considered and involved. In the first of those cases (Commercial Bank of Pennsylvania v. Union Bank of New York) the plaintiffs were merely agents of the holders, and the defendants subordinate agents of theirs to collect the draft in question. . The only really controverted question in it was, whether the plaintiffs could maintain such an action. The complaint in it contained two counts; one for not paying over the amount of the draft as if collected, and the other for not collecting it; and the defendants (who were a bank) were held to be liable (in the alternative, however, only) either because they surrendered the draft and took the check without authority, thus making it their own, or if they had such authority, for not presenting the check on the same day it was received, for payment. So that a determination of the effect of a receipt of a check for a draft on the liability of parties to it, was not necessary to the final decision of the cause. Much stress was laid in the opinion of the court upon the fact that the sub-agents of the defendants (who were also a bank) to collect such draft were chargeable with the check received for it, which was drawn upon themselves, because being for a larger amount than the draft they had paid the difference in cash, and was debited, on'their books to the maker, who was in the habit of overdrawing upon them, which overdrafts he made good, and he deposited on the same day negotiable instruments to the amount of such check with them, although they subsequently proved to be worthless. So that the defendants were made liable rather on the ground of having collected the draft by making the check their own, than for any negligence in collecting. In the other case, (Nunnemaker v. Lanier, ubi supra,) it was proved that the check taken for the draft would have been paid, if presented the day it was received, and the collecting agent was held liable for not presenting. Neither of such cases are authority for showing that as between the parties, the neglect to present a check on the same day it was received, unless expressly in payment, discharges the parties to a draft.

But in the case of Turner v. Bank of Fox Lake the check received was transmitted through the New York clearing house the day after it was received, and it was held to be in time, because in the usual course of business, and that is decisive of this case.

But even if presentation next day, through the clearing house, of a check given in exchange for a draft were not in time to prevent the discharge of parties to the draft, yet the-former, to use the language of Judge Campbell in Kobbe v. Clark, [ubi supra,) must be “good” when received, and. such as would have been paid if presented, which standard is not reached by the check in question. The law does not leave the question of the probability of the payment of a check or draft, which requires its speedy presentment, to mere speculations and conjecture, but has established certain data from which alone it may be inferred, such as the possession by the drawee of funds of the drawer, and such a course of previous dealing as to warrant the belief that the draft will be paid, or an agreement to pay it. (Legge v. Thorpe, 12 East, 171. Brown v. Maffey, 15 id. 216. Rucker Miller, 16 id. 43. Robinson v. Ames, 20 John. 146. Van Wart v. Smith, 1 Wend. 227.)

In this case the drawers of the check in question, drew the same day $9000 more of checks than funds were provided for, on the bank on which it was drawn. They were largely overdrawn at the close of bank hours, and were during the day $40,000. It does not appear how quickly the $15,000 they had in it on deposit was paid out, even if the defendants had been hound to present such check, while it was therej which they were not. (Lovett v. Corn-well, 6 Wend. 39.) It does not appear, therefore, that funds were provided to meet this particular check. The only arrangement made for paying any check was. that by Griggs & Lothrop with the teller of the bank, in which they informed him they were going “to draw heavily” and he “ agreed to pay.” How much “heavily ” would have reached to, there are no reliable means presented of determining. It must be construed to be one of those vague undertakings, which it is left to the good will and discretion of each party to terminate, when they please. There being, therefore, neither funds of the drawees in the bank from which such check could be paid, at all times, nor any definite stipulation to pay it from the funds of the bank, the defendants were not bound to go through the idle ceremony of presenting it. The drawees evidently considered the check as of no value,- by the promptness with which they gave back the draft in return for it next day. The plaintiffs did not even think proper to allege in their complaint, nor did the referee find absolutely, that such check would have been paid, but only in the alternative that it would have been either paid or certified, which is not the same thing. (Bradford v. Fox, 39 Barb. 205.) The readiness also with which Griggs & Lothrop surrendered the draft and took back the check, is strong evidence of at least their construction of the agreement with the teller and their opinion of the worthlessness Of the check.

The transmission by the plaintiffs to J. Lee & Co. of the telegram requesting them to present the draft in question to the Park Bank for payment after they had had an opportunity of learning from their correspondents, (Griggs & Lothrop,) whether such draft had been paid, is strong evidence that all parties considered it still unpaid. The referee has found that the plaintiffs did not know it had been paid or presented. That statement is supported only by the evidence of one plaintiff who merely speaks for himself. In an action like the present, fraud is not to be presumed, but proved, and every presumption consistent with the innocence of the defendants is to be made, rather than the contrary. The whole charge of .fraud turns on the question, whether the check of Griggs & Lothrop would have been paid if presented, or they had a good and reliable reason to believe it would be. It is not impossible that the plaintiffs or the Park Bank might have learned all the facts from Griggs & Lothrop, (their correspondents,) or otherwise before paying the draft, and before the request by them to the holders of it, by telegram, to present it, so as .to know that they still remained liable. The inference and even presumption is that they did, rather than that the check would have been paid if presented, so as to make the defendants technically guilty of deceit

In reference to tlie third ground of defense suggested, that the defendants acted merely as agents of Lee &. Co. and were known so to act, and therefore they were under no personal, or moral, or legal obligation to disclose what they knew as to a prior demand, it is to be kept in view that all their prior agency in collecting the draft had ended, when they sent it back to Lee & Co. after the second demand, and that they were selected anew as agents, simply, to present such check at the Park Bank for payment, and that they said and did nothing afterwards 'to deceive it, and that no communication of theirs, or authorized by them, had reached the plaintiffs as to any prior non-payment. Whether they were responsible to their principals for negligence in collecting or not, was entirely a matter between them. It is true they had insisted on a re-exchange of the draft for the check, when the latter was found to be worthless, but they might have done that in good faith, believing that the check would not have been paid if presented, as they allege in their answer, or that' it did not in law constitute a payment. The complaint does not allege, the referee has not found, nor is there a particle of evidence in the case, that the defendants knew that the plaintiffs were ignorant of the transaction in regard to the check, or had been notified by any one that it had not been paid. They, therefore, had no reason to suppose that the plaintiffs were under any misapprehension as to their rights and obligations arising from any thing said or done by them, (the defendants,) and they, therefore, were not bound to do any thing to rectify it. "

If Lee & Co„ had employed another agent to receive the money, even if they had the same knowledge, he clearly could not be made responsible for not communicating it, and the defendants should be in no worse plight after their first connection with the collection of the draft ceased. The plaintiffs voluntarily offered to pay, and the defendants were the mere conduit of' the money, under no obligations to interfere, and guilty of no fraudulent suppression of facts.

The action seems to have the object of either shielding • the Park Bank from the consequences of paying, under a direction to pay unpaid drafts of the same kind, a draft which the plaintiffs claim to have been paid, or of making the defendants liable, although mere agents, because it was more convenient to sue in this state, and perhaps because they were more responsible, instead of Lee & Co. who misled the plaintiffs by their telegram announcing the non-payment of the draft, and the charge of fraud is introduced, because without that the defendants could not be made liable.

I think upon every ground urged for the defense, the' legal conclusions of the referee were erroneous; his report should be vacated, the judgment reversed, a new trial ordered, and the order of reference vacated.  