137 N.Y.S. 796 | N.Y. App. Div. | 1912
Lead Opinion
The action is in equity for the cancellation of a satisfaction piece and for the consequent foreclosure of the real estate mort
I think the learned Special Term erred in holding that there was a final payment of the Barton mortgage so far as to preclude a court of equity from restoring it under the circumstances. It is well settled, of course, that if the holder or payee of a check procures the certification of the same by the drawee bank, the drawer of the check is released from further liability thereon. The contract between the maker and the payee of the check is that the latter shall he entitled to payment upon presentation of the check to the bank upon which it is drawn, and not that the payee may accept the bank’s certification in lieu of immediate payment. When the payee, instead of insisting upon immediate payment, causes the check to be certified he in effect causes the funds to be withdrawn from the control of the maker and leaves them with the bank for his own accommodation. Such certification operates substantially as a certificate of deposit in favor of the payee, and the law treats his act in obtaining it as a discharge of the drawer. (First Nat. Bank of Jersey City v. Leach, 52 N. Y. 350; Dunn v. Whalen, 120 App. Div. 729; Neg. Inst. Law [Consol. Laws, chap. 38; Laws of 1909, chap. 43], § 324.)
Where, however, the drawer causes the check to be certified before delivery, the same reason does not exist for holding him discharged from liability. The certification under such circumstances merely operates as an assurance that the check is genuine, and the certifying bank becomes bound with the drawer. (First Nat. Bank of Jersey City v. Leach, supra, 350; Minot v. Buss, 156 Mass. 458; Born v. First Nat. Bank of Indianapolis, 123 Ind. 78; Oyster & Fish Co. v. Bank, 51 Ohio St. 106; Andrews v. German Nat. Bank, 9 Heisk. 211; Bickford v. First Nat. Bank of Chicago, 42 111. 238; Brown v. Leckie, 43 id. 497.)
In Randolph Nat. Bank v. Hornblower (160 Mass. 401) it was held that the certification of a check by the drawer prior to delivery, even although made at the request of the payee, does not release the drawer; and such is, I think, the proper rule. Ho case to the contrary has been cited or found. Certainly the reasons for releasing the drawer from liability when the check has been certified by the holder after delivery do not exist in such a case. The purpose of requesting the drawer to have the check certified before delivery is generally that the bank may be made liable thereon as well as the drawer, thereby
Jenks, P. J., and Woodward, J., concurred; Burr, J., read for affirmance, with whom Rich, J., concurred.
Dissenting Opinion
I dissent. I have no quarrel with the general rule of law as stated in the prevailing opinion, but I think it is not applicable to the undisputed evidence in this case and the findings of the trial court based thereon. Plaintiff could, if he chose, accept Dalton’s check, either certified or uncertified, in absolute and final payment and discharge of the Barton mortgage, and if he did so his claim must be based upon the check alone. The trial court has found that he did this, and the evidence abundantly sustains it.
On the second of April, when Dalton called to pay the mortgage, he asked the plaintiff, “ ‘ How do you want the money % Do you want it in cash or a certified check ? ’ He said, i A certified check will do.’” The next day he called, prepared to deliver the check and receive the satisfaction piece of the mortgage. The satisfaction piece was not ready and plaintiff asked to have the matter postponed until Monday, April fourth. If he had been ready with his satisfaction piece on Saturday, April second, the check would undoubtedly have been paid before the failure of the bank upon which it was drawn, and the difficulty which here confronts us would not have arisen. But on the fourth, when Dalton called upon the plaintiff and téndered him the check drawn to the order of the mortgagee, Lillian B. Barton, and duly certified, plaintiff said, “ That check is of no use to me, I don’t want it,” and Dalton then said, “Very well, I will give you the cash for it. Are you ready with your satisfaction piece ? ” And plaintiff replied, “ I don’t want that [the cash], I want it [the check] to my order.” Dalton then said, “ Very well, I will draw it to your order as attorney. Let me have pen and ink, ” and he then interlined over the name
The reason as given why plaintiff did not care to accept a check drawn to the order of Lillian B. Barton only was that he desired to deduct from the amount received certain claims of his own for fees. But still he could have had the cash and made the deduction, instead of the check, and he refused the former and requested the latter. As appears again from the evidence, when the check was presented to him on the second of April, drawn to the order of Lillian B. Barton, he said, “That is of no use to me, I don’t want that,” and Dalton replied, “ Well, I will go and get the money for it.” There is no question that at that time he could have gone to the bank and obtained the money. But the plaintiff refused, and said, “No, that is not what I want. I want it [the. check] drawn to my order.”
The fact that Davenport sued Dalton on the check and recovered judgment is conclusive evidence that he accepted the check as full and final payment of the mortgage, otherwise the check was without consideration and he could maintain no action upon it. Suing upon the check was a remedy inconsistent with the claim now asserted by the plaintiff, and plaintiff is bound by the election then made.
Rich, J., concurred.
Judgment reversed and new trial granted, costs to abide the final award of costs.