
    THE SYRACUSE, &c., R. R. CO. v. COLLINS.
    N. Y. Commission of Appeals,
    January, 1874.
    Bankruptcy.—Assignment por Creditors.—Payment.—Laches in PRESENTING CHECK.
    An assignment for benefit of creditors was made on May 5, and on the 20th the assignor was adjudged a bankrupt. Held, that although the assignment and bond were never filed, the inchoate transfer placed the property so far out of the power of the creditors, as to excuse the neglect of a holder of a check, on May 4, drawn on the assignor, in not presenting and demanding payment meanwhile.
    
    A check drawn by a debtor in favor of his creditor, at the request of the latter, in lieu of money, and delivered in exchange for a receipt of payment of the debt, does not, in the absence of express agreement to receive it in payment, amount to payment, unless the check was actually paid, or clearly would have been paid if presented without undue delay.
    
    It is not enough to show that it probably might have been collected.
    Appeal Tby the defendant from a judgment of the general term of the third department, affirming a judgment recovered by the plaintiff at the circuit.
    The action was brought by the Syracuse, Binghamton, and New York Railroad Company, against Charles W. Collins.
    On May 4, 1868, the defendant was indebted to the plaintiff in the sum of fifty dollars and nineteen cents, and to the United States Express Company seven dollars and eighty-five cents, for the transportation of freight and express matter, which indebtedness had before that time fallen dne. On that day, Rogers, the agent of the two companies, presented both claims to defendant, and demanded payment. The defendant, in payment of the demands, gave a check on H. J. Messenger’s Bank in Cortland, which was received by said Rogers as cash, and in full payment of the aforesaid demands against the defendant. On receipt of such payment, said Rogers gave receipts in full for both amounts. This was at two o’clock, p.m., or two and one-half, p. m., and on the same street with said bank, and within a few rods of it, and Rogers went past the bank after such payment that afternoon. The bank remained open until four o’clock that afternoon (its usual time of closing), and opened at nine, and remained open until ten A. M. the next day; and had the check been presented at any time before the closing of the bank on the fifth, it would have been paid. At the time the check was given, defendant had sufficient funds in the bank to pay it, which have never been drawn out.
    The defendant proposed to pay the currency, but Rogers preferred a check. Rogers had been accustomed to take checks of defendant and others for similar indebtedness. At the time of the giving of this check, and for at least the whole day thereafter, Messenger, who owned said bank, was the owner of a large amount of unincumbered real estate in Cortland, worth at least seventy-five thousand dollars, and" a large amount of personal property, not exempt from levy and sale on execution, amounting to at least twenty-five thousand dollars. It is possible, and perhaps probable, that payment of said check could have been enforced against said Messenger at any time before May 30, 1868. No demand of payment of said check was ever made, though Messenger was in Cortland all day May 5, his residence being known to said Rogers, and so remained until May 20, when he was declared a bankrupt, being much of the time in his bank.
    After keeping the check two weeks, and about the time Messenger was declared a bankrupt, Rogers notified defendant that said check was not paid, which was the first notice he had.
    On May 20, 1868, Messenger was declared a bankrupt, and his property passed into the hands of three assignees, who have wound up his affairs, and he has been discharged from all his debts, only paying a little over thirty cents upon a dollar. Other facts appear sufficiently in the opinion.
    
      A. J. Parker, for appellant.
    
      A. J. Northrup, for respondent.
    
      
       A brief memorandum of this case is in 57 N. Y. 641. A previous decision is in 3 Lans. 29. Compare the preceding case, Thrasher v. Bentley, p. 39, above.
      
    
    
      
       Compare Turner v. Bank of Fox Lake, 4 Abb. Ct. App. Dec. 434.
    
   Earl, Com.

This action was brought both upon the check, and upon the original consideration, and the recovery was had upon the original consideration. It is, therefore, not important to inquire whether a recovery could have been had upon the check. The cause was tried at the circuit before the judge, without a jury, and he found that the check was received by Rogers, plaintiff’s agent, as cash, and in full payment of plaintiff’s demand, but that there was no express agreement that it should be payment, unless upon presentment to the bank it was paid. I suppose it to be settled law in this State, that a debtor’s own note, bill, or check for his debt, will not of itself operate as payment, even when it is expressly agreed to be received as payment (Cole v. Sackett, 1 Hill, 516; Waydell v. Luer, 5 Id. 448; S. C., 3 Denio, 410; Hill v. Beebe, 13 N. Y. 556; Spencer v. Ballou, 18 Id. 327; Bradford v. Fox, 38 Id. 289). But here there was no express agreement, as the judge found that the check should be received as payment. Rogers demanded payment of the bills, and when defendant was about to pay him in currency, said he preferred his check, as it would be less trouble to him. Thereupon the check was given, and the bills were receipted and delivered to the defendant. Upon such a state of facts, there is certainly no authority in this State for holding that the check paid or merged the original debt so that no action could be maintained upon that.

The debt not having been paid by the check, the only remaining question to be considered is, whether the defendant has any other defense, based upon the facts, to a recovery upon the original consideration.

The plaintiff had the whole of the day, May 4,' on which it received the check, and the following day in which to present the same for payment, and was therefore guilty of no laches %in not presenting it for payment before the bank failed (Edwards on Bills, 396; Story on Prom. Notes, § 493; Chitty on Bills, 377; Burkhalter v. Second Nat. Bank of Erie, 42 N. Y. 538; Smith v. Miller, 43 Id. 171).

On the evening of the next day, May 5th, the banker made a general assignment for the benefit of his creditors, and May 20th, he was, upon the petition of some creditors, put into bankruptcy.

Although the assignment was never recorded or filed, and although the assignees gave no bond and did not take possession of the property, yet so far as appears the assignment was valid to place the property of the assignor out of his control and out of the reach of his creditors, except as they might assail the same in bankruptcy. Under chapter 348, of the Laws of 1860, an assignment properly executed is valid and operative from the time it is made, and the making of the inventory and giving of the bond and other things required by the act are to be done afterward within the times mentioned in the act (Hardman v. Bowen, 39 N. Y. 196; Van Vleet v. Slauson, 45 Barb. 317).

Ho further steps were taken under the assignment, because it is probable that proceedings were immediately taken to put the banker into bankruptcy, which resulted in a few days in adjudging him a bankrupt and placing his property in the hands of assignees in bankruptcy.

It is therefore difficult to see how the plaintiff could, at any time after the 5th of May, have enforced the collection of this check out of the banker’s property.

The judge, however, found that it was possible and perhaps probable that the check might have been collected. But this finding was not sufficient to defeat the recovery. The defendant was bound to show that by the laches of the plaintiff in keeping or dealing with the check without a demand of payment or notice to him, he had suffered damage, and then to the extent of such damage the law, to avoid circuity of action, would treat the debt as paid (Bradford v. Fox, supra).

The defendant alleges payment. The giving of the check does not of itself show payment. The defendant was bound to go further and to show that he suffered damage by the laches of the plaintiff. It was not sufficient for him to show that possibly or even probably he was damaged. He was bound to show that he actually was damaged, and that his debt was thus paid. This he failed to do to the satisfaction of the judge who tried the cause, and hence he was properly defeated.

The case of Smith v. Miller (43 N. Y. 171), is claimed by the learned counsel for defendant to be in conflict with these views, and some of the language used by the learned judge who wrote the opinion in that case seems to sustain the claim. But the point decided, and rule applied in that case are in harmony with the law as above announced. In that case the defendants bought goods of the plaintiffs,, and in payment for the same sent them by mail a draft on a Hew York firm. On the same day plaintiffs received the draft, they presented it to the drawees, and took their check upon a bank for the amount, and surrendered the draft. The check was not presented for payment until twelve o’clock of the next day, when payment was refused, the drawees of the check having failed on that morning. The check would have been paid if presented on the day it was received. The draft was not reclaimed by the plaintiffs, and protested for non-payment. They, however, gave the defendants notice of the non-payment of the check, and afterwards sued them for the balance due for the goods sold, and it was held that they could not recover. The case was not disposed of upon the rules of law regulating the rights and duties of drawer and drawee of a check, but upon rules of law applicable to the case of one who holds or takes a check for collection, acting for one not a party to it. It was held that the plaintiffs were guilty of laches, by not presenting the check for payment on the day they received it, and hence that they had made the check their own, and substituted the drawees thereof as their debtors in the place of the defendants. The, plaintiffs were defeated on the ground of laches, causing the defendants damage, but not such laches as would discharge the drawer of a check.

In the case under consideration the defendant did not prove that he sustained any damage from any laches of the defendant, and hence I think the cases are distinguishable.

The judgment should therefore be affirmed with costs.

All concurred.  