135 N.Y.S. 121 | N.Y. App. Div. | 1912
Lead Opinion
• The plaintiff, claiming to have on deposit with the defendant bank at least the sum of $13,000, brought this action to recover that sum on the ground that the defendant had refused to honor the plaintiff’s check duly presented for said amount. The defendant for answer asserted that. when the check was presented the plaintiff had on deposit only the sum of $2,555.29. The case turns on a deposit on April 13, 1904, by the plaintiff in the defendant bank of a check for $13,000, drawn by the plaintiff upon the Federal Bank of New York to the order of the defendant, with which deposit the plaintiff’s account with the defendant, was opened. According to the evidence of the-.plaintiff, the check was presented by it with a deposit slip pursuant to a prior arrangement and upon the defendant’s solicitation to open an account. A pass book was delivered to the plaintiff. at the time of the deposit in which the amount was credited to the plaintiff as cash, and a similar credit entry was made on the books of the defendant. Later in the day the check was presented to the Federal Bank for payment. The latter declined to "pay cash but offered to and did certify the check, making it payable at the Importers and Traders’ National Bank. The defendant’s evidence is to the effect that its messenger was instructed to procure either cash or a certification, and it did accept a return of the check thus certified.
The plaintiff raises a question of pleading which we do not consider it necessary to discuss at length. Irrespective of whether the defendant gave the plaintiff a credit against which the latter was permitted to draw, it had the right upon the return of the check to charge it back. The issue as framed by the pleading was whether the plaintiff had $13,000 to its credit when the defendant refused to pay the check for that amount. Upon the merits, however, we think there was a question of fact for the jury.
The respondent does not question the general rule that, where a check is deposited by a customer in a bank in the ordinary course of business and is accepted and credited as money the title passes to the bank, even though there be no express agreement. (Vide Metropolitan National Bank v.
It was the law in this State prior to the passage of the Negotiable Instruments Law, that the holder of a check by procuring it to be certified discharged the drawer from liability, for the obvious reason that the drawer of a check after it is certified, cannot draw out the funds necessary to meet it. The money ceases to be his and is appropriated to the payment of the check. (First National Bank of Jersey City v. Leach, 52 N. Y. 350.) Section 324 of the Negotiable Instruments Law provides: Where the holder of a check procures 'it to be accepted or certified the drawer and all indorsers are discharged from
The judgment should, therefore, be reversed and a new trial granted, with costs to appellant to abide the event.
Laughlin, Scott and Dowling, JJ., concurred; Ingraham, P. J., dissented.
Dissenting Opinion
I agree that there was a question of fact as to whether this check was deposited under such circumstances that the title to the check passed to the defendant, and the plaintiff received credit therefor without qualification, andi that thereby the defendant became indebted to the plaintiff in the sum for which the credit Was given. The credit which is given upon such a deposit is necessarily subject to the condition that in case the check is not paid the bank can charge back to its depositor the amount of the check and thus cancel the credit.'
The check in controversy not having been paid, the bank had a right to charge back the check to the plaintiff and cancel the credit given at the time of the deposit, unless the certification of the check precluded the defendant bank from exercising that right. The evidence is undisputed that the defendant as soon as it received the check at once sent it to the bank upon which it was drawn and its messenger demanded the money from the bank. This was shortly before three o’clock, the close of banking hours. The bank upon which the check Was drawn refused to pay it in cash, but without request from ■ the messenger of the defendant bank certified it and handed it back to him. This was not a certification at the request of or for the benefit of the defendant. .The defendant, in attempting to collect the check, was bound to exercise vigilance, and I think would be responsible only for negligence, of which there was no proof. The messenger of the defendant bank at once called up the cashier of the bank on the telephone and said that the bank upon which the check was drawn had refused to honor it but had certified it and made it payable at
The certification of a check only charges the depositary bank where that bank has accepted the certification in lieu of the collection of the money. That rule, as I understand it, does not apply where the depositary bank has endeavored to collect the check but the bank upon which it was drawn has refused to honor it. I do not see what other steps the defendant could have taken to collect this check than it did take. It accepted the certification only because the bank had refused to honor it, and it accepted it simply as a means of obtaining payment when no other method of obtaining such payment was open to it. If it had treated the check as dishonored, all that it could have done would be to protest it for non-payment, which would have been of no possible advantage to the plaintiff, as the bank upon which it was drawn suspended payment the next morning; and it might with force have then been claimed that if the defendant bank had accepted the certification it might have collected the check from the bank where it was made payable on that afternoon. There is not a particle of evidence that notice could have been given to the plaintiff of the dishonor of the check when it would have been of the slightest advantage to him.
Assuming that the defendant received this check on deposit and gave the plaintiff credit for it, it certainly cannot, as I view it, lose its right to charge back the check to the plaintiff if it was not paid, where it exercised due diligence to collect the check and only failed because of the insolvency of the bank upon which it was drawn.
. I think the undisputed evidence in this case shows that the defendant did everything that it could do to collect the check, and that the complaint was, therefore, properly dismissed.
Judgment reversed, new trial ordered, costs to appellant to abide event.