
    COURT OF APPEALS.
    Edward Nidig, plaintiff and respondent, agt. The National City Bank of Brooklyn.
    
      Duty and negligence of collecting agent.
    
    An out of town note or draft deposited with a bank for collection may be sent by mail to the bank on which it is drawn or made payable, provided that be the ordinary method of transacting such business. Such first-mentioned bank is authorized to surrender the note given for collection to the bank upon which it was drawn on receiving its draft for the amount.
    In an action against a bank for negligence, while acting as a collection agent, it is incumbent on the plaintiff to prove in what respect the defendant has been negligent. So long as the collecting agent has pursued the ordinary and reasonable methods of making the collection, it is free from fault. What is sufficient evidence of agency considered. The effect of not presenting a note or check payable at the particular place where it is payable discussed and explained. Payment made by check or note, when inoperative if such check or note be dishonored. Effect of failure of the bank pending the collection. Insolvency must be proved and will not be presumed.
    
      Decided February 24, 1880.
    The plaintiff sued the defendant, in the city court of Brooklyn, to recover $ 1,009.90, damages, for gross negligence in and about the collection of a promissory note for that amount.
    The defendant, in answer to the complaint, alleged that the promissory note was delivered to the defendant as a banking institution for the purpose of having the defendant send the same through the mail to the Bank of Lowville, at Lowville, in the state of New York, where the said promissory note was made payable ; that said promissory note was so delivered to the defendant on about the 21st day of December, 1877, and that the defendant forwarded the same by mail to the said Bank of Lowville on the said 21st day of December, 1877, and that the defendant, on the 29th day of December, 1877, received by mail, from the said Bank of Lowville, a draft in the words and figures following on account of said promissory note:
    New York.
    United States two cent stamp, canceled.
    Bank of Lowville, Lewis County, ^
    $1,008.65. Lowville, December 28, 1877. j
    German American Bank, New York, pay to the order of A. A. Bowe, cashier, ten hundred and eight dollars.
    No. 13460.
    E. H. BUSH, Cashier.
    
    That the said draft was received by defendant on Saturday afternoon, December 29, 1877, after 3 o’clock; that the defendant sent the said draft with its other exchanges in the usual course of its business, to the clearing-house in the city of New York, on Monday morning, December 31, 1877, and that it was returned to the defendant through its clearinghouse agent in the usual course of its business on the 2d day of January, a. d. 1878, with a ticket attached on which were printed the words “ not good; ” that the defendant immediately gave notice of the non-payment of said draft to the plaintiff, and that thereupon the plaintiff gave to the defendant his check for $1,008.65 to counter-balance the credit for that amount which the defendant, on .the 29th day of December, 1877, on the receipt by mail of said draft, had given to the plaintiff.
    The trial judge held that there was no positive proof of actual negligence on the part of the defendant, and that none could be inferred from the evidence, and thereupon dismissed the complaint, with costs.
    The plaintiff appealed to the general term where the judgment of nonsuit was reversed and a new trial ordered.
    The defendant, thereupon, appealed to the court of appeals.
    
      
      W. H. Hollis, for defendant and appellant.
    
      Blumensteil dk Asoher, for plaintiff and respondent.
   Rapallo, J.—

The draft was not sent forward until the twenty-eighth. But it does not appear that this was an unreasonable delay, nor was it even shown that there was any mail after business hours on the twenty-seventh by which the draft could have been sent. The bank of Lowville was entitled to the whole of the business day of the twenty-seventh within which to pay the note.

IJp to this stage no negligence on the part of the defendant is shown. Then was there any shown in collecting the draft ? At what time the defendant received the draft, or what was done with it, appears only from the admissions in the answer, which show that the defendant received the draft on Saturday, December twenty-ninth, after business hours, and sent it in the usual course of business to the clearing-house in the city of New York on Monday morning, December thirty-one, and it was returned to the defendant through the clearing-house in the usual course of business on the second of January, not good. It also appears that the defendant gave immediate notice of non-payment to the plaintiff.

The allegation of negligence lies at the foundation of this action, and it is incumbent upon the plaintiff to point out in what respect the defendant has been negligent. So long as it has pursued the ordinary and reasonable methods of making the collection, it is free from fault; and we fail to see in what respect they have been departed from. Sending the draft through the clearing-house for collection was the usual and proper mode (Turner agt. Bank of Fox Lake, 3 Keyes, 425). The plaintiff, however, resorts to another ground of liability, and contends that by sending the note to the Bank of Lowville the defendant constituted that bank its agent to receive payment of the note, and is therefore liable for the proceeds as having been received by the Bank of Lowville, the last-named bank being deemed to have received the proceeds by charging the amount of the note against its customer, the maker, and by this circuitous mode of reasoning the defendant is sought to be made liable for the solvency of the Bank of Lowville. We do not think that any such agency was created. The note, in so far as relates to its presentment at the bank, and the duties of the bank in respect to it, was equivalent to a check drawn by the maker upon the bank where the note was made payable (Ætna Ins. Co. agt. Fourth National Bank, 46 N. Y., 88). The bank owed a duty to its customer to pay it on presentation, if in funds. The defendant used the United States mail as its messenger to make the presentment, and by this means caused it to be presented to the bank for payment on the day when due. It did not deposit it there for collection. ' If there had been indorsers, it might be argued that the defendant constituted the Bank of Lowville its agent to notify the indorsers of non-payment; but even this is very questionable, for it was held in a similar case that if the proceeds were not remitted the paper should be deemed dishonored and notice of non-payment should be given by the bank which had sent it (Bailey agt. Brodenham, 16 C. B. [N. S.], 288). Ho such question arises, however, in the present case, for there were no indorsers. The defendant, by sending the note to the Bank of Lowville, requested it to pay it, not to receive the proceeds. The object of sending was to extract money from the bank as agent of the maker of the note, not to put money in the bank as agent of the defendant, or to the credit of the defendant. There is nothing in the nature of the transaction which should render the defendant guarantor of the solvency of the Bank of Lowville. It was recently held by this court in the case of The People agt. The Merchants and Mechanics' Bank of Troy, decided October, 1879, that by sending a check through the mail to the bank on which it was drawn, the sender did not constitute that bank its agent to receive the proceeds; and as before said a note payable at a bank where the maker keeps his account is equivalent to a check drawn by him upon that bank, except that in the case of a note the failure to present for payment does not discharge the maker. But as far as the question now under consideration is concerned, the effect is the same. The bank on which the notéis drawn has nothing to do but to pay the note if in funds, and if not refuse to pay. If it pays, it does so in behalf of the maker and no relation is created between it and one who presents it by mail different from that which would exist if presented through any other agency, unless accompanied by a request to do some further act in behalf of the sender, beyond complying with its duty to its own customer.

The case is also defective in respect to the question of damages. It is by no means clear that the maker of the note is discharged. Where a note is payable at a bank an entire failure to present it for payment does not discharge the maker (Walcott agt. Van Santwoord, 17 Johns., 248; Green agt. Goings, 7 Barb., 652; Caldwell agt. Cassidy, 8 Cow., 271). If the maker has not sufficient funds in the bank, the omission to present it is of no consequence. If he has funds there, he can plead it by way of tender and is relieved from liability only for interest and costs, and even if the bank fails with the funds in its hands this is no defense to the note (Ruggles agt. Patten, 8 Mass., 480; Fenton agt. Goudry, 13 East, 473; Turner agt. Haydon, 4 Barn. & Cress., 1). The bank is, in such cases, regarded simply as the agent or depository of the note or acceptor of the bill, and he alone suffers by its failure, and his promise to pay is not discharged. In this respect only a note or bill payable at bank differs from a check. Therefore, if there ha.d been no presentment whatever, and the bank had failed with sufficient funds of the maker in its hands to pay the note, the maker was still liable.

Note. —Amotion for a reargument was subsequently made and denied. [Rep.

The attempt of the bank to pay the note by a draft which was not good was no payment, and on notice of the non-payment of the draft the plaintiff could have tendered it back and demanded his note, or could have sued upon the note, even without giving indemnity, as the note was io the possession of the maker, having been returned to him by the bank. The plaintiff could not even set up, in bar of costs and interest, that he had the money in the bank; for his account was short, and was not made up until after the bank had failed. Ueither was the maker misled by anything that had been done, for the bank failed on the same day that he received back his note by mail, and he was at a distance and could have done nothing if he had known that the note was not paid. There was no evidence that the maker was not solvent, or that the plaintiff had sustained any damage.

On both grounds we think the order appealed from should be reversed and the judgment of nonsuit affirmed.

Folgeb and Andbews, JJ., concur. Ohuboh, Oh. J., concurs on question of damages. Milleb, Eabl and Daeeobth, JJ., dissent.  