Story Case

A suit was brought against Henry Perkins upon a check which he remembered having signed about a month before. He called up his bank and asked why the check had not been paid, and was informed that it had never been presented for payment. He then wrote to Ellis Overman, the plaintiff, telling him that the check would be paid and asking the dismissal of the suit. He received no answer, and was compelled to notify his lawyer to appear in the case and try to have the court dismiss it. Overman insisted that, in spite of the lack of presentment, he should have a judgment against Perkins for the check, and costs of suit. What should the ruling of the court be!

Ruling Court Case. Gordon Vs. Levine, Volume 194 Massachusetts Reports, Page 505; Volume 120 American State Reports, Page 565

Levine drew a check upon a Boston bank to the order of Gordon, on the thirtieth day of December, 1905. The check was drawn and delivered in Boston where Gordon resided. The thirtieth was Saturday. Gordon indorsed the check away to other parties residing in Boston. The check was later reindorsed to him. On the fifth of January, the bank upon which the check was drawn, failed, and the money Levine had on deposit there was wholly lost. Gordon now sues Levine, the drawer, upon this check.

Levine contends that, since Gordon waited an unreasonable length of time in presenting the check, the loss here must fall upon him. Had the check been presented on Monday after it was drawn, it would have been paid.

Mr. Justice Morton said: "The general rule is, as was stated by the judge and as is provided in the Negotiable Instruments Act, that a check must be presented for payment within a reasonable time after it is issued. If it is not so presented, and the drawer sustains a loss by reason of the failure of the drawee, he will be discharged from liability to the extent of such loss, continuing liable otherwise."

"What is a reasonable length of time, however, still remains for consideration. One of the rules which has been established is, that where the drawer, drawee, and the payee are all in the same city or town, a check, to be presented within a reasonable time, should be presented at some time before the close of banking hours on the day after it is issued, and that its circulation from hand to hand will not extend the time of presentment to the detriment of the drawer." Judgment was given for Levine.

Ruling Law. Story Case Answer

The drawer of a check signifies by the act of drawing that he has money on deposit in the bank upon which he draws. The holder must present the check to the bank within a reasonable time for payment. If the check is not presented for payment within a reasonable time, and the bank fails in the meantime, the loss will and should fall on the holder, because it is due to his unreasonable delay in presenting. With ordinary demand bills, an unreasonable delay entirely discharges the drawer, but with checks, a delay, however unreasonable, will not affect the drawer's liability, if the delay causes no damage or loss to him. What constitutes a reasonable time will depend largely on circumstances. If all parties reside in the same city or town, the holder should present the check to the bank at some time during the day following its issuance. If tae parties reside in different places, the holder should .start the check back the day following its receipt, and it should then be presented to the bank there on the next day after its arrival.

Failure to present would not discharge Perkins upon the check, since the bank has not failed nor has he in any way lost anything on account of the delay. But his liability is that of a secondary party, not a primary party, and he can not be sued until the presentment has been made and the payment refused. When the conditions under which he agreed to pay are performed, he will be in default if he does not pay. But until the demand at the bank, he is not liable and the suit should be dismissed.