Steinhart v. National Bank of D. O. Mills & Co.

Money had and Received — Collection op Note by Bank—Credit to Insolvent Debtor — Cancellation op Note — Payment — Finding. ■—In an action against a bank to recover money alleged to have been received by the bank to and for the use of the plaintiffs, where it appears that the bank received a note from the payee for collection, and upon presentation of it for payment to the maker, who was a customer of the bank, he wrote on it, “ Please charge the same to my account, ” but at the time had no money in the bank to his credit, and was indebted to it in a con. siderable sum, and the bank, supposing him to be of good credit, charged it to his account, and marked the note canceled, but afterwards, on the same day, learning that he was insolvent and had made an assignment for the benefit of his creditors, indorsed upon the note the words “ charged in error ” and “ canceled in error,” and procured from the post-office and canceled a check which it had drawn in favor of the bank through which the plaintiffs had sent the note, — the transaction did not constitute a payment of the note, and a finding that the defendant did not receive any money or other valuable thing from the maker to and for the use of the plaiutiffs, and that they have lost no rights by the acts of the defendant, is sustained by the evidence.

Id.—Rescission of Contract by Bank—-Mistake.—If it be assumed that the bank contracted with the maker to advance money to pay the note, nevertheless the bank had a right to rescind the contract on the ground that its consent thereto was given by mistake.

Id.—Test of Payment by Check —Action on Note — Collection of Check. — The test as to whether the note was paid or not, as against the payee, by means of the check, is, whether an action could afterwards be maintained upon the note against the maker, and the check could operate as payment until collected.

Id. •— Note or Check for Antecedent Debt — Extinguishment — Agreement for Payment.-—-When a creditor takes a note or check for an antecedent debt, it does not operate to extinguish the debt, unless it is received by express agreement as payment.

Id. — Mutilation of Note —Explanation. — The fact that the note was mutilated and marked “ canceled” did not affect the payee’s right to sue upon it, the matter being susceptible of explanation.

Id.—Evidence — Assignment for Benefit of Creditors — Debtor’s Belief of Solvency at Time of Credit — Error without Prejudice.— Where the maker of the note had testified that he made an assignment for the benefit of creditors upon the afternoon of the day the note was presented for payment, the admission of his evidence as to how long he was in having the assignment prepared is not prejudicial error, when his testimony shows that on the morning of the arrangement for the payment of the note by the bank he thought he was able to pay all his debts in the ordinary course of business.