otherwise lawfully appropriated before the pre- | judgment for appellee. On appeal to the sentment of the check, or act done equivalent appellate court, this judgment was affirmed, and plaintiff below prosecutes this further appeal.

thereto.

(March 31, 1894.)

APPEAL by Pleourt, First Department, PPEAL by plaintiff from a judgment of affirming a judgment of the Circuit Court for Cook County in favor of defendant in an action brought to compel payment of a check. Affirmed.

Statement by Shope, J.:

Messrs. Flower, Smith & Musgrave, for appellant:

One cannot rescind a contract and at the same time retain the consideration in whole or in part which he has received under it. He must rescind the contract in toto, or not at all.

Harzfeld v. Converse, 105 Ill. 534; Converse v. Hargfeldt, 11 Ill. App. 173; Jennings v. Gage, 13 Ill. 610, 56 Am. Dec. 476; Bowen v. Schuler, 41 Ill. 192; Lovingston v. Short, 77 Ill. 587; Kellogg v. Turpie, 93 Ill. 265, 34 Am. Rep. 163; Morse v. Brackett, 98 Mass. 205; Mansfield v. Trigg, 118 Mass. 350.

Even where a party defrauded may rescind as against the defrauding party, yet the rights of innocent third persons acquired for value cannot be affected thereby. If such rights have attached, it is too late to rescind. Bishop, Cont. § 679.

A check is a negotiable instrument, and subject to the same rules that govern ordinary bills of exchange in respect to the rights of the holder.

Bull v. First Nat. Bank of Kasson, 123 U. S. 105, 31 L. ed. 97; 2 Dan. Neg. Inst. § 1652.

Munn v. Burch, 25 111. 35; Chicago Marine & F. Ins. Co. v. Stanford, 28 Ill. 168, 81 Am. Dec. 270; Marine Bank of Chicago v. Ogden, 29 Ill. 248; Bickford v. First Nat. Bank of Chicago, 42 Ill. 238, 89 Am. Dec. 436; Brown v. Leckie, 43 Ill. 497; Fourth Nat. Bank of Chicago v. City Nat. Bank of Grand Rapids, 68 Ill. 398; Union Nat. Bank v. Oceana County Bank, 80 Ill. 212, 22 Am. Rep. 185; Ridgely Nat. Bank v. Patton, 109 Ill. 479; National Bank of America v. Indiana Bkg. Co. 114 Ill. 483; Shaffner v. Edgerton, 13 Ill. App. 132; Merchants Nat. Bank v. Ritzinger, 20 Ill. App. 27; McAllister v. Oberne, 42 Ill. App. 287.

On and prior to September 2, 1890, A. Weed & Co. were doing business at Ashland, Wis., and that day delivered their check for $3,000, drawn upon appellee bank, to appellant, and took up a note owned by appellee, then due, against Hoxie & Mellor, theretofore sent to appellant by appellee for collection, and on which A. Weed & Co. were indorsers. The check was as follows: "Chicago, September 2d, 1890. The Union Trust Company: Pay to the order of Amos Baum, cashier, three thousand dollars. A. Weed & Co. The said Baum, cashier of appellant bank, accepted the check as so much cash, canceled the note, delivered it to A. Weed & Co., and remitted the amount, less $3 charges, to appellee by draft on appellant's correspondent, A bank check in this state transfers the the Merchants' Bank of Chicago, which draft money of the drawer in the bank to the payee was duly paid, etc. The check was also the moment the check is delivered, and from sent to the Merchants' Bank of Chicago by that moment it ceases to be the property of the appellant for collection, and presented to ap-drawer and belongs to the payee or his assignee. pellee for payment on September 4, 1890, and dishonored; whereupon due protest was made, etc. On August 25, 1890, upon certain representations made by A. Weed & Co., appellee was to, and did on September 3d following, discount for them $11,249.65 of Hoxie & Mellor paper, the same being three notes of $3,000, $3,000, and $5,430, respectively. On September 2d, A. Weed & Co. had to their credit on the books of appellee $809.25, and on that day and the following, prior to crediting their account with the proceeds of the discounted paper, had overdrawn their account to the amount of $5,760.57; so that, after deducting overdrafts, a balance was left to their credit on appellee's books, at the close of business on September 3d, of $5,489.08. On the evening of this day, appellee became aware of the failure of Hoxie & Mellor, and, at the opening of business on the morning of September 4th, charged back to A. Weed & Co. the $5,430 note, less discount ($85.69), and returned it to them with the following letter: Chicago, September 4, 1890. Messrs. A. Weed & Co., Ashland, Wis.-Dear Sirs: Upon being informed yesterday that Messrs. Hoxie & Mellor had failed, we deducted the amount of the note of $5,430, less discount, $85.69-$5,344.31-from your account, and herewith return the note. Yours, respectfully, G. M. Wilson, Cashier, "-thus leaving a balance to the credit of A. Weed & Co. The admissions or declarations of a maker of $144.77 at the time of the presentation of of a check after the delivery of the same are the check for payment on that day. An ac- not competent evidence against the payee, to tion was brought by appellant against ap- show that the credit or deposit against which pellee on the check in the circuit court of the check was drawn, was obtained fraudCook county, and resulted in verdict andulently, or under such circumstances as to

A bank cannot set off against a check-holder a claim against the drawer, its depositor, which is not due, or which is contingent.

Fourth Nat. Bank of Chicago v. City Nat. Bank of Grand Rapids and Merchants Nat. Bank v. Ritzinger, supra; Commercial Nat. Bank v. Proctor, 98 Ill. 558; National Bank of America v. Indiana Bkg. Co. supra.

In determining when a credit was given by the bank to its depositor, the time of the entry on the bank books is not conclusive, but all the facts and circumstances in reference to the acceptance of the deposit should be considered.

American Exch. Nat. Bank v. Gregg, 138 M. 596; American Exch. Nat. Bank of Chicago v. Chicago Nat. Bank, 27 Ill. App. 538, 131 m. 547.

give the drawee bank a right to refuse payment | three notes of Mellor & Hoxie were discounted of the check.

66

A. K. Young & C. Mfg. Co. v. Wakefield, supra, and cases therein collated. Moreover, at the time of the discounting of said notes, Weed & Co. had overdrawn their account with appellee $5,760.57. By the judgments of the circuit and appellate courts, the con troverted question of fact as to fraud on the part of Weed & Co. in the transaction is conclusively settled, and that such fraud was consummated before the payment of Weed & Co's overdrafts. This being so, appellee would be excused from surrendering up to Weed & Co. the two $3,000 notes. Preston v. Spaulding, supra, and cases cited. We are therefore of opinion that appellee had the right to rescind the contract, as it did, by returning to Weed & Co. the $5,430 note, and charging the same back to their account.

of the bank show that they were discounted | are packed, the contract is held to be entire.' as separate and distinct entries. The rule as laid down by Mr. Parsons (vol. 2, *517) is: "If the part to be performed by one party consists of several distinct and separate items, and the price to be paid by the other is apportioned to each item to be performed, or is left to be implied by law, such a contract will generally be held to be severable." And Mr. Wharton (Cont. § 748) says: When a consideration is divisible, and the price can be apportioned, then, if a distinct divisible portion of the consideration fails, the price paid for such portion can be recovered back;" and that, "in cases in which the consideration is divisible, the purchaser may elect to take what can be delivered to him, and in such case, if the purchase money has been paid, he can recover back the excess, or, if there has been no payment, defend pro tanto." See cases in notes. In A. K. Young & C. Mfg. Co. v. Wakefield, 121 Mass. 91, where the action was an account for certain India-rubber goods sold, and the price of each article, and discount from the gross sum, were stated in account, the court, in passing upon the question of whether the contract was entire or divisible, said: "We do not deem this contract to have been an entire one. That a contract should be of that character, it is not sufficient merely that the subjects of purchase are included in the same instrument of conveyance. If but one consideration is paid for all the articles so that it is not possible to determine the amount of consideration paid for each, the contract is entire. Miner v. Bradley, 22 Pick. 457. When many different articles are bought at the same time for distinct prices, even if they are articles of the same general description, so that a warranty that they are all of a particular quality would apply to each, the contract is not entire, but is in effect a separate contract for each article sold. Johnson v. Johnson, 3 Bos. & P. 162; Miner v. Bradley, supra.

To the same effect is the doctrine stated in Wooten v. Walters, 110 N. C. 251, where the sale was of a stock of merchandise and land. It was there said that, "though a number of things be bought together without fixing an entire price for the whole, but the price of each article is to be ascertained by a rate or measure as to the several articles, or when the things are of different kinds, though a total price is named, but a certain price is affixed to each thing, the contract in such cases may be treated as a separate contract for each article, although they all be included in one instrument of conveyance, or by one contract" citing Johnson v. Johnson and Miner v. Bradley, supra. See also Hill V. Renee, 11 Met. 268; Cushing v. Rice, 46 Me. 302, 71 Am. Dec. 579; Preston v. Spaulding, 120 Ill. 208.

We are, however, referred by counsel for appellant to the case of Harzfeld v. Converse, eupra, as maintaining a contrary view. This is a misapprehension. That case falls clearly within the rule, announced in the Massachu setts and other cases, that where "the purchase is of goods as a particular lot, or the number of barrels in which the goods

It is also insisted that, although appellee had the right to partially rescind the contract as against Weed & Co. it could not legally exercise such right as against appellant, it being a bona fide holder of the $3,000 check in question, drawn by Weed & Co. on appellee. It appears that about September 2, 1890, appellee sent to appellant for collection and returns a $3,000 note, then due, against Hoxie & Mellor, owned by appellee, and upon which Weed & Co. were indorsers. On that day Weed & Co. gave appellant the check in question, drawn on appellee for the amount of the note, which was at once canceled by appellant and surrendered to Weed & Co. Appellant received the check as cash, and remitted the proceeds, less charges, to appellee, by draft on the Merchants' Bank of Chicago. This remittance was received by appellee on September 3d, and paid. On the next day, about noon, the check sued on was presented to appellee for payment, which was refused. Appellee, in the mean time, between the receipt of the remittance and presentation of the check for payment, having become apprised of the business failure of Hoxie & Mellor and the fraud of Weed & Co., had charged back to Weed & Co's account, and returned to them, the said $5,430 note, less discount ($85.69), leaving a balance to the credit of Weed & Co. of $144.77, only, when the check was presented. It is not shown or pretended that appellant, in making collection of said note, was authorized by appellee to receive in payment thereof anything but money. When appellant received the note from appellee for collection, it then and thereby became the agent of appellee for that purpose; and the law is well settled that, unless such agent is specially authorized so to do, he has no right to accept in payment of his principal's debt anything in lieu of money. Mathews v. Hamilton, 23 Ill. 470; Ward v. Smith, 74 U. S. 7 Wall. 447, 19 L. ed 207; Howard v. Chapman, 4 Car. & P. 508; Story, Prom. Notes, 7th ed. §§ 115-389, and notes. Being authorized to receive money only, the agent has no implied power to receive a check in payment (Hall v. Storrs, 7 Wis. 253); and where the collection agent, not being thereunto authorized, accepts in payment of his principal's demand a check, or depreciated currency, and loss ensues thereby, he must

bear it. Ward v. Smith, supra; Morse, Banks & Banking, 431, 432; Harlan v. Ely, 68 Cal. 522.

But it is claimed that the drawing of the check by Weed & Co. on appellce operated as an assignment to appellant of so much of the fund on deposit, against which it was drawn, as was necessary to pay it. As between the drawer and drawee, this is doubtless correct. Union Nat. Bank v. Oceana County Bank, 80 Ill. 212, 22 Am. Rep. 185. But, in order to charge the bank with the amount, it is indispensable that the check be first presented to it for payment, or some other act done equivalent thereto. This rule was announced in the early case of Munn v. Burch, 25 Ill. 35, where it was held that the check of a depositor on his banker, delivered to another for value, transfers to the payee therein, and his assigns, so much of the deposit as the check calls for, and that, when presented to the bank for payment, the banker becomes liable to the holder for the amount thereof, provided the drawer has at the time sufficient funds on deposit to pay it. And this doctrine has been subsequently reaffirmed in numerous decided cases in this court, among which see Chicago Marine &

F. Ins. Co. v. Stanford, 28 Ill. 168, 81 Am.
Dec. 270; Bickford v. First Nat. Bank of
Chicago, 42 Ill. 238, 89 Am. Dec. 436; Fourth
Nat. Bank of Chicago v. City Nat. Bank of
Grand Rapids, 68 111. 398; Metropolitan Nat.
Bank of Chicago v. Jones, 137 III. 634, 12 L.
R. A. 492.

That appellee had, between the time of
making the check and its presentation for
payment, on deposit to the credit of Weed
& Co., funds sufficient to meet the check,
can have no bearing on the question. Ap-
pellee had no notice of the existence of the
check until presented for payment, and the
deposit against which it was drawn having
been, as we have seen, depleted by proper
charges and deductions until only a meager
sum remained, there was no sufficient fund
left on deposit out of which it could be paid,
and the check was therefore rightfully dis-
honored. Other errors are assigned, which
have been carefully considered, but, in view
of what has been said, no useful purpose
would be served by a discussion of them.
The judgment of the appellate court will
be affirmed.
Affirmed.

PENNSYLVANIA SUPREME COURT

IRON CITY NATIONAL BANK

v.

Plaintiff's statement set out that

"On December, 19. 1892, the defendant was FORT PITT NATIONAL BANK, Appt. the holder of a certain check or bill of ex

(159 Pa. 46.)

1. A payor of forged paper is not exempted from the consequences of his act by the Act of 1849, § 10, providing for the recovery of money paid on forged signatures, if the result of a recovery would be that his own negligence would occasion loss to the payee. That act only applies in cases of due care on his part, and where his recovery will not cause loss

change, dated December 17, 1892, purporting to be drawn by the firm of G. Dice & Co., on the Iron City National Bank of Pittsburgh, for the sum of $852, of which a true copy is hereto attached and made part of this statement. This check, on December 17, 1892, was deposited by the payees thereof, Messrs. Gutman & Howard, with the defendant bank. Said defendant was not then a member of the Pittsburgh Clearing House Association of Banks, but it cleared through the Citizens' National Bank of Pittsburgh. The said defend2. Recovery by the payor of a forged ant then and there indorsed said check and decheck will not be permitted under Act of livered it to the Citizens' National Bank as its 1849, § 10, providing for recovery of money paid agent, and said Citizens' National Bank, acting on forged signatures, if the check was paid and as the agent of the said defendant bank, preapparently dismissed from further attention un-sented the said check on December 19, 1892, til five days later, when the payee, after parting with the funds, started an investigation which disclosed the forgery.

to the payee.

(December 30, 1893.)

APPEAL by defendant from a judgment of the Court of Common Pleas, No. 3, for Allegheny County in favor of plaintiff in an action brought to recover back the amount which plaintiff had paid to defendant on a forged check. Reversed.

to the Iron City National Bank of Pittsburgh for payment, and said Iron City National Bank then and there paid the said check to the said Citizens' National Bank acting for and as agent of the said defendant bank, and the said sum so paid ($852) was placed to the credit of the defendant bank by its said agent.

"On December 24, 1892, the president of the defendant bank called upon the plaintiff bank and inquired as to said check and when it was paid and whether it was good, and thereupon the cashier of the plaintiff bank produced said

NOTE.-The above decision is clearly in harmony | the State of New York (N. Y.) 12 L. R. A. 791, and with general doctrine and noticeable chiefly for note; Deposit Bank v. Fayette Nat. Bank (Ky.) 7 L. the claim as to the effect of the Pennsylvania stat- R. A. 849, and note; Atlanta Nat. Bank v. Burke ute. As to the general doctrine in respect to pay- (Ga.) 2 L. R. A. 96, and note. Also Janin v. Lon ment of forged checks, see Shipman v. Bank of don & S. F. Bank (Cal.) 14 L. R. A. 320.