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that presentation was not in law ex- v. Claiborne (1846) 1 La. Ann. 342 cused, in which case the date of exe- (see explanation of this case infra); cution and delivery is taken. The Scroggin v. McCelland (1893) 37 Neb. holding, to the extent that it does not 644, 32 L.R.A. 110, 40 Am. St. Rep. 520, fix a later date, is supported by the 56 N. W. 208; Wrigley v. Farmers & implication contained in the well-es- M. State Bank (1906) 76 Neb. 862, 108 tablished rule that delay, short of the N. W. 132 (a bank draft); Brust v. period prescribed by the Statute of Barrett (1879) 16 Hun (N. Y.) 409, Limitations for an action on the check affirmed on other grounds in (1880) or on the original consideration, in 82 N. Y. 400, 37 Am. Rep. 569; Dolon presenting the check to the drawee v. Davidson (1896) 16 Misc. 316, 39 for payment, does not release the N. Y. Supp. 394, affirmed in (1896) 7 drawer from liability, unless he is App. Div. 461, 39 N. Y. Supp. 1020 (see damaged or prejudiced by such delay. discussion, infra); COLWELL V. COLIt is also supported, to the same ex- WELL (reported herewith) ante, 876. tent, by several cases cited herein in In Harman v. Claiborne (La.) suwhich it is directly held that where pra, it was held that “the right of presentation is not made within a rea- action of the holder against the drawsonable time, the date of actual pres- er of a check payable to order, drawn entation cannot be taken, leaving the by a bank here on a bank in another question of a specific date open. And state, is prescribed by five years from it is supported as to the specific date the time when the check was payable.” by the Nebraska cases cited infra. The holding is somewhat confused

There'are, however, a few cases in with the principle of laches in the which a statement that the statute be- presentation of a check for payment, gins to run against the holder at the yet the statute is referred to as a distime the check is presented is made tinct ground for the holding. either by way of argument or as dic- As indicated, the case of Brust v. tum. Not one of these cases, however, Barrett (1879) 16 Hun (N. Y.) 409, is authority for the proposition that supra, was affirmed in (1880) 82 N. Y. the date of presentation would be tak- 400, 37 Am. Rep. 569. However, the en where presentation had been de- court of appeals found it unnecessary layed beyond a reasonable time by to decide the question here discussed, the holder. The English case cited basing its decision upon the fact that to this proposition involved a bill of there were no funds in the bank with exchange, and is therefore not within which to pay the check when it was the scope of the note.

drawn (see quotation from the deciAnd it is quite well established that sion under the appropriate heading if the check is drawn when the drawee infra). Since the inferior court meredoes not have funds of the drawer ly decided that an action upon a check with which to pay it, the statute com- not presented for payment until ten mences to run in favor of the drawer years after its delivery to the payee at the date and delivery of the check, is barred by the Statute of Limitations for the reason that a cause of action of six years, whether there were any arises at that time, presentation being

funds in the bank or not at the time in law excused.

it was delivered, and the court of ap

peals affirmed the decision on the Where drawee has drawer's funds. The Statute of Limitations begins to

ground that there were no funds, run in favor of the drawer of a check,

neither decision is authority on the to bar an action thereon, not later

question of limitations as between the than the time when the check should

date of the check and a reasonable have been presented for payment at

time for presentment. The inferior the bank upon which it is drawn (in court's decision is clear on the point the Nebraska cases here cited it was that the date of actual presentation directly held that this means at the cannot be en as the date when the expiration of a reasonable time after statute commences to run, where the the delivery of the check). Harman presentation is not made in a reason

able time, whether or not there were N. Y. 330, 27 Am. Rep. 55), and the funds in bank; but the decision of the bank owed the payee of the check no higher court limits its holding to obligation. The right existed in favor cases in which there were no funds. of the plaintiff's intestate to the pay

In Dolon v. Davidson (N. Y.) supra, ment, by the maker, of the $50 and ina section of the statute provided that terest immediately; but the demand of "where a right exists, but a demand the payee and notice of nonacceptance is necessary to entitle a person to were necessary for the convenience maintain an action, the time within and benefit of the maker, and to rewhich the action must be commenced lieve him of the cost and annoyance must be computed from the time when of a litigation, by affording him an opthe right to make the demand is com- portunity to pay, in case his deposiplete;" but this section was held, at tary refused to accept the check, least by the trial court, to be merely Smith v. Miller (1870) 43 N. Y. 175, 3 declaratory of the law as it applied to Am. Rep. 690; Commercial Bank V. checks before its enactment. The Hughes (1837) 17 Wend. (N. Y.) 98; court said: "Prior to the enactment Knapp v. Green (1894) 79 Hun, 267, 29 of $ 410 of the Code, the general term N. Y. Supp. 350; Wilbur v. Warren of this department, in the case of (1887) 104 N. Y. 192, 10 N. E. 263. Brust v. Barrett (N. Y.) supra (an ac- I am of the opinion that the Statute tion by the payee against the drawer of Limitations has run against this of a check), had held that the Statute action, both under the ruling of the of Limitations had run against a check general term in Brust v. Barrett (N. which was not presented for payment Y.) supra, on account of the failure within six years after its delivery, and of the plaintiff's intestate to present an opinion to the same effect was writ- the check within six years, and also ten by Judge Barker at special term. under § 410 of the Code, which, I The court of appeals affirmed that think, should be construed as requirjudgment upon a different ground in ing that the time within which the ac(1880) 82 N. Y. 400, 37 Am. Rep. 569, tion must be commenced must be comand observed that it was unnecessary puted from the time when the right to pass upon the point decided by the to make the demand was complete. general and special terms. This was The right to make the demand was the latest exposition of the law at the complete upon the delivery of the time of the enactment of § 410 of the check, and the holder of a check New Code. It is evident from the lan- should not be permitted to postpone guage of that section, as well as indefinitely the liability of the maker, from Throop's note thereto, that it by omitting to present the check for was not intended to change the law, payment. When the Statute of Limibut merely to clear away doubt and tations would be a bar to an action compile it as it then existed, reducing on the indebtedness represented by it to a precise and accurate statement. the check, it should also bar an action Bronson v. Munson (1883) 29 Hun on the check. Syracuse, B. & N. Y. (N. Y.) 60. The check in question is R. Co. v. Collins (1870) 3 Lans. (N. presumed to represent an ordinary in- Y.) 33; Bradford v. Fox (1868) 38 debtedness on the part of the defend- N. Y. 289. The early ruling that, as ant to the plaintiff's intestate, then between the drawer and payee of a due and payable; but, under the rules check, the check must be presented of the law merchant, an action could within a reasonable time or the drawnot be brought against the drawer un- er will be released to the extent of any til after presentation of the check to damages he may have sustained, and the bank and refusal by the latter to that the burden is on the payee to show pay. The check did not constitute an that the drawer has not sustained assignment of any funds in the bank damages, was made before the enactif there were any at that time, as to ment of the Statute.of Limitations, and which there is no evidence (Atty. Gen. that phase of the question was not v. Continental L. Ins. Co. (1877) 71 considered. Commercial Bank V.

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Hughes (1837) 17 Wend. (N. Y.) 94; Bull v. First Nat. Bank (1887) 123 Little v. Phenix Bank (1842) 2 Hill U. S. 105, 31 L. ed. 97, 8 Sup. Ct. Rep. (N. Y.) 425; Harker V. Anderson 62 (dictum); Haynes v. Wesley (1900) (1839) 21 Wend. (N. Y.) 383; Smith v. 112 Ga. 668, 81 Am. St. Rep. 72, 37 S. Miller (1873) 52 N. Y. 548; Murray E. 990 (see explanation of this case, v. Judah (1826) 6 Cow. (N. Y.) 490. infra); Wright v. MacCarty (1900) If, however, the holder of a check is 92 Ill. App. 120 (dictum); First Nat. entitled to a reasonable time to pre- Bank v. Needham (1870) 29 Iowa, 249 sent the same before the Statute of (statement made arguendo); Cowing Limitations commences to run there- v. Altman (1877) 71 N. Y. 435, 27 Am. on, I think it must be held, as a mat- Rep. 70 (obiter); Re Boyse (1886) L. ter of law, that a presentation after R. 33 Ch. Div. (Eng.) 612, 56 L. J. Ch. fourteen years is not within a rea- N. S. 135, 55 L.T.N.S. 391, 35 Week. sonable time. White v. Southland Rep. 247 (a bill of exchange). (1870) 2 Albany L. J. (N. Y.) 50; In Haynes y. Wesley (1900) 112 Ga. Reizenstein v. Marquardt (1888) 75 668, 81 Am. St. Rep. 72, 37 S. E. 990, Iowa, 294, 1 L.R.A. 318, 9 Am. St. Rep. cited supra, the drawer had no funds 477, 39 N. W. 506; Herrick v. Woolver- in the drawee bank with which it ton (1869) 41 N. Y. 589, 1 Am. Rep. could pay the check, and the decision 461; Palmer V. Palmer (1877) 36 is based upon this fact (see citation of Mich. 487, 24 Am. Rep. 605; Lyle v. samę case under succeeding heading); Murray (1851) 4 Sandf. (N. Y.) 595; but the court quoted Merchants' Nat. Stafford v. Richardson, (1836) 15 Bank v. State Nat. Bank (U. S.) supra, Wend. (N. Y.) 306." The appellate on the general rule, and it set out in division, in affirming this decision the syllabus that the statute com(1896) 7 App. Div. 461, 39 N. Y. Supp. mences to run at the time the check is 1020, after stating the facts, merely presented and payment thereon is re

, said: “It is apparent from the facts fused, unless presentation is in law disclosed that the payee did not pre- excused. sent the check to the bank within a

Where no funds are available. reasonable time, and that, upon the

The Statute of Limitations begins to facts disclosed, it was proper to hold

run in favor of the drawer of a check as a matter of law, that the presentment was not made in a reasonable

to bar an action thereon from the date time. Inasmuch as this action

of the check, if, at the time of delivery, was not brought until fourteen years

there are no funds in the bank upon after the date of the instrument (nor

which it is drawn, to the credit of the was any demand made within about

drawer, out of which it may be paid, fourteen years), we think the Statute

presentation and demand for payment of Limitations was properly held to be

being in law excused. Haynes v. Wesa defense to the action."

ley (Ga.) supra; Culver v. Marks These cases are also good authority

(1889) 122 Ind. 554, 7 L.R.A. 489, 17 on the point that the date of actual

Am. St. Rep. 377, 23 N. E. 1086 (see expresentation cannot be taken as the

planation of this case infra); Brush date for the statute to commence to

v. Barrett (1880) 82 N. Y. 400, 37 Am. run where there was no presentation

Rep. 569; Bethell v. Bethell (1887)

L. R. 34 Ch. Div. (Eng.) 561, 56 L. J. within a reasonable time, but they do

Ch. N. S. 334, 56 L. T. N. S. 92, 35 not fix a specific time. It has been said by way of argument

Week. Rep. 330 (see explanation in

fra). or as dictum, that the Statute of Limi

Culver v. Marks (1889) 122 Ind. 554, tations begins to run in favor of the

7 L.R.A. 489, 17 Am. St. Rep. 377, 23 N. drawer of a check to bar an action

E. 1086, supra, is not a strong case upthereon when the check has been pre

on the proposition to which it is cited sented to the drawer and payment has herein for the reason that the action been refused. Merchants' Nat. Bank was not barred by the twenty-year v. State Nat. Bank (1871) 10 Wall. limitation period, even though the (U. S.) 676, 19 L. ed. 1028 (dictum); statute commenced to run at the data

of the check, and the court does not say affirmatively that it began to run at that date. It seems to have been contended that the action was barred by the statute that bars actions not based upon written contracts in six years, so the court merely said: "It is contended that the right of recovery was barred by limitation. What we have said in passing upon the complaint disposes of this question. The check being in writing, and constituting the foundation of the action, it is not barred by the Statute of Limitation." By reference to other Indiana cases, especially Nichol v.

v. Henry (1884) 98 Ind. 34, one is able to estimate the significance of these words, for it is there disclosed that, at about the time this action was brought, the period of limitations for actions based "upon contracts in writing” was fixed at twenty years, while if the contract was not in writing the period was six years. The checks in the instant case were dated in 1869 and 1870, while 'the claim thereon was filed in 1885, so the action would have been barred if it had not been in writing. The discussion preceding the language quoted, while not a direct discussion of limitations, shows quite clearly that the court meant to hold that the statute commenced to run at the date of the checks, since it held the fact that the drawer had no funds in the bank at that time to be a sufficient excuse in law for not presenting the checks for payment, so that a cause of action, sufficient to start interest running, arose at that time.

In Brush v. Barrett (1880) 82 N. Y. 400, 37 Am. Rep. 569, supra, the court said: "If the evidence established that there were no funds in the bank to meet the check when it was drawn, the check was due immediately, and the judge was wrong in his refusal to charge the jury as requested. The rule is well established that if the drawer has no funds in the hands of the drawee, an action can be maintained against the former without any presentment or notice of nonpayment. Mohawk Bank v. Broderick (1833) 10 Wend. (N. Y.) 304; Fitch v. Redding (1850) 4 Sandf. (N. Y.) 130;

Healy v, Gilman (1857) 1 Bosw. (N. Y.) 235; Johnson v. Bank of North America (1868) 5 Robt. (N. Y.) 554. As the cause of action was complete when the check was made, and the plaintiff could allege a want of funds as an excuse for nonpresentment of the check, and no presentment was required, it is very clear that the statute began to run from its date. It is insisted that the want of funds in the bank is the result of the fraudulent act of the drawer, which operates as a waiver of presentment, and the defendant is estopped from alleging any such fact, and that it is no defense to an action upon the check. We are unable to see upon what ground the doctrine of estoppel can be invoked under the circumstances, and the position taken cannot be upheld. The want of funds is an established fact in the case, which affects the liability of the drawer and relieves the holder from the obligation ordinarily incurred to present the check. It renders it due without presentment and demand; and being due, no reason exists why this fact is not available to the drawer as well as the holder. While the drawer fails to provide funds, the holder neglects to present the check; and both parties are thus in fault. The holder may avail himself of the maker's default by bringing a suit immediately without any demand, and if he delays to enforce his claim by action within six years, the drawer may plead the Statute of Limitations as a bar. If the check is due, so that the holder can collect it without delay, it is due as to both the parties, and each is entitled to the benefit arising from the facts actually existing. The breach of the contract is the cause of action, and the statute begins to run from the time of such breach, even if there is fraud on the part of the defendant. East India Co. v. Paul (1849) 7 Moore, P. C. C. 85, 13 Eng. Reprint, 811, 14 Jur. 253, 1 Eng. L. & Eq. Rep. 49; Battley v. Faulkner (1820) 3 Barn. & Ald. 288, 106 Eng. Reprint, 668, 22 Revised Rep. 390; Whitehouse v. Fellowes (1861) 10.C. B. N. S. 765, 142 Eng. Reprint, 654, 30 L. J. C. P. N. S. 305, 4 L. T. N. S.

177, 9 Week. Rep. 557; Wilkinson v. held while the drawer completed a Verity (1871) L. R. 6 C. P. (Eng.) 209, loan that would supply funds for its 40 L. J. C. P. N. S. 141, 24 L. T. N. S. payment. The court held that the 32, 19 Week. Rep. 604, 16 Eng. Rul. statute commenced to run to bar the Cas. 208. It may also be remarked holder's action thereon at the time he that the action to recover the amount received a letter informing him that of the check on the ground of a want the loan would not be completed. As of funds rests on contract, and the it was understood that the holder same measure of damages is recover- should date the check when he preable as if the check had been present- sented it, there would seem to be ed for payment and was not paid. The ground for the theory that it could be cause of action is the same in each regarded as dated when the letter was case, and the statute runs equally received, but the court does not so against any form of action arising

state, merely holding that the holder from the nonpayment of the check.

was excused presentation, and that his As the order granting a new trial must

cause of action arose to start the statbe upheld upon the ground already

ute running when the letter was rediscussed, it is not necessary to con

ceived. sider the question whether the Statute

But it has been held that where the of Limitations runs against the check

holder of a draft presents it for payfrom the day of its date without re

ment within a reasonable time, and gard to the want of funds, and without any presentment and demand of pay

payment is refused on the ground that ment."

the drawer has no funds there,—it beIn Bethell v. Bethell (1887) L. R.

ing understood that he had none there 34 Ch. Div. (Eng.) 561, 56 L. J. Ch.

when he drew the draft,—the Statute N. S. 334, 56 L. T. N. S. 92, 35 Week.

of Limitations does not commence to Rep. 330, supra, the holding does not run in favor of the drawer until the fully support the proposition to which date payment was refused. Wood v. it has been cited for the reason that McMeans (1859) 23 Tex, 481. the check was undated and was to be

J. W. M.

WILLIAM P. HUBBARD

V.
EQUITABLE LIFE ASSURANCE SOCIETY, Piff. in Err.

West Virginia Supreme Court of Appeals January 29, 1918.

(81 W. Va. 663, 95 S. E. 811.)

Insurance - breach — damages.

1. If the insured, after refusal upon propter terms, of a loan provided for in the policy, borrows the money so stipulated and applied for from other persons upon collateral of his own other than the insurance policy, and at a rate of interest higher than that specified in the loan provision of the policy, but the lowest obtainable, he is entitled to recover the interest so paid in excess of what he would have had to pay the insurer for the use of the same amount for the same period under such loan provision, and the reasonable value of his services in procuring the loan, but no compensation for the use of the securities so employed as collateral.

[See note on this question beginning on page 895.] Headnotes by POFFENBARGER, P.

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