71 P. 83 | Cal. | 1902
Lead Opinion
This cause was submitted to the superior court upon an agreed statement showing the following facts, — viz.: In November, 1897, John W. Clarke, Sr., had on deposit with the defendant the sum of twelve hundred dollars, which remained on such deposit until after his death. During that month, for the purpose of making a gift of one thousand dollars to his son, John W. Clarke, Jr., he drew a check upon the defendant for that amount of money, and delivered it to his son, saying that he could get the money from the bank; but, after delivering it to him, stated that he wished he would not present it until after his death. The son complied with his wish, and did not present the check until the morning after his father's death. He died September 29, 1898, and on September 30th the son presented the check to the bank, and it was paid. The bank had, however, been informed of the death of the father before the check was presented for payment. The present *170 action is brought to recover from the bank the amount of the check as money deposited with it by the deceased, and held on deposit at the time of his death. The superior court rendered judgment in favor of the defendant, and the plaintiffs have appealed.
The question presented upon the appeal is whether under the above facts the intended gift of the father to the son had become complete before his death, or whether it was merely inchoate. If the transaction between them constituted a completed gift, the money represented by the check belonged to the son, and the bank was justified in paying it to him, while, on the other hand, if the gift had not been perfected, but was incomplete at the time of his death, the money in the bank belonged to his estate and descended to his heirs, and its payment by the bank was unauthorized.
Section
This question has frequently arisen in cases where a gift causamortis is claimed by reason of a check given for that purpose, but it is invariably held that unless the check is presented in the lifetime of the donor it is ineffective. (Harris v. Clark,
The relation between a bank and its depositors is that of debtor and creditor respectively, and the money deposited with the bank becomes its property, and is no longer under the control of the depositor. A check is only a direction to the bank to pay a certain sum of money to the person therein named. The money does not thereby become the property of the payee, nor is it placed beyond the control of the depositor. Until it is presented to the bank, the drawer may countermand its payment, or he may direct a different disposition of the moneys to his credit in the bank.
Neither does a check of itself before presentation operate as an assignment to the payee of the money for which it was drawn. "An ordinary uncertified check upon a general account is neither a legal nor an equitable assignment of any part of the sum standing to the credit of the depositor, and confers no right upon the payee that he can enforce against the bank." (O'Connor
v. Mechanic's Bank,
If it could be held that by drawing a check the drawer thereby assigned that amount of money to the payee, it would follow that the money represented by the check became thereby the property of the payee, and that he could maintain an action against the bank for its recovery, subject to any defense that the bank might have against the depositor; but the almost universal line of authority is, that such action cannot be maintained. The bank upon which a check is drawn has no contract with the payee, and is under no legal obligation to him, and its refusal to pay the check does not give to the payee a right of action against it. "The holder takes the check on the credit of the drawer, in the belief that he has funds to meet it, but in no sense can the bank be said to be connected with the transaction. If it were true that there was a privity of contract between the banker and holder when the check was given, the bank would be obliged to pay the check, although the drawer before it was presented had countermanded it, and although other checks drawn after it was issued, but before payment of it was demanded, had exhausted the funds of the depositor. If such a result should follow the giving of checks, it is easy to see that bankers would be compelled to abandon altogether the business of keeping deposit accounts for their customers." (Bank of the Republic v. Millard, 10 Wall. 152.) The same rule is declared in First Nat. Bank of Washington v.Whitman,
In Illinois (Munn v. Birch,
Wheatley v. Strobe,
Under these authorities, it must be held that the payment of the check by the bank was unauthorized; that the money deposited with it by the plaintiffs' testator, and held by it at the time of his death, was a part of his estate, and that the plaintiffs are entitled to recover the same from the defendant.
The judgment is reversed, and the superior court is directed to enter judgment upon the agreed statement of facts in favor of the plaintiffs.
Van Dyke, J., and Temple, J., concurred.
Garoutte, J., concurred in the judgment.
Dissenting Opinion
I dissent, and think that the judgment should be affirmed. I adhere to the opinion delivered in Department; and in addition to the views there expressed I desire to say this: The legal right of the bank to pay the check was in no way affected by the fact that it was a gift. It was a negotiable instrument in due form having the genuine signature of the drawer, and the bank was in no way called upon to inquire why it had been drawn. It did not know that the check was a gift — whatever consequences might have attached to such knowledge. It is beyond question, then, *176 that appellants' whole case rests upon the asserted proposition that the death of the maker of a negotiable check revokes the instrument. To that proposition I cannot assent. If the death of the maker, ipso facto, revokes the instrument, as in ordinary cases of principal and agent, then that result follows irrespective of the knowledge of the bank that such death had occurred. Certainly the general banking business of the country is not conducted upon any such notion. A paying teller of a busy bank postponing the payment of checks until he can by messenger, telephone, telegraph, or mail learn whether the payors have died since signing, would be a curious spectacle. If such precautions were necessary, banking business would be paralyzed.
It is said that Clark, Sr., might have countermanded the check before it was paid, or have drawn out the money on other checks. But he did not do so; neither did any other person representing him. A power of revocation is of no consequence unless exercised in the lifetime of the party holding it. This is so even in trusts. In Stone v. Hackett, 12 Gray, 232, the court say: "A power of revocation is perfectly consistent with the creation of a valid trust. It does not in any degree affect the legal title to the property. That passes to the donee, and remains vested for the purposes of the trust, notwithstanding the existence of a right to revoke it. If this right is never exercised according to the terms in which it is reserved, as in the case at bar, until after the death of the donor, it can have no effect on the validity of the trust or the right of the trustee to hold the property." The same principle applies in the case at bar. In nearly all the cases relied on for appellants the party on whom the check was drawn had received some notice of countermand or objection to the validity of the check, and had refused to pay it; and in most of them the action was by the drawee against the payor, which kind of action, according to some of the authorities, can never be maintained. For instance, in Simmons v.Savings Society,
In my opinion, the true rule is stated in McGregor v. Loomis,
1 Disn. 247, where the subject of the legal significance of checks is fully discussed and the authorities cited. The court there says that a banker, following the ordinary business of his calling, "gives the community to understand that those who have funds in his hands have not only the right to draw upon the deposit, but that all drafts will be paid on presentation; he opens virtually a letter of credit to his depositor which is a guaranty to him, as well as to all who make advances upon the faith of it. For all practical purposes, it assimilates itself to a parol promise to accept any check that the owner of the deposit may draw; and thus the rule which binds the drawee of a bill of exchange as an acceptor, when he has promised in advance to honor it, furnishes a strong analogy," citing cases. The opinion contains a quotation from Harris v. Clark,
But, as hereinbefore stated, the question involved here relates to the rights of parties to a negotiable instrument, and not to the validity of a gift.
*179Henshaw, J., concurred.
The following is the opinion of Department Two, rendered on the eighteenth day of November, 1901, referred to in the dissenting opinion of Mr. Justice McFarland: —
Addendum
Action by executors of John W. Clarke, Sr., deceased, against the Placer County Bank, a corporation, to recover one thousand dollars alleged to have been deposited by the decedent with the defendant and to have remained on deposit at the time of the decedent's death. Judgment was rendered for defendant, and plaintiffs appeal from the judgment. The case was tried without a jury and upon an agreed statement of facts.
In the month of November, 1897, the decedent had twelve hundred dollars on deposit in the bank of respondent. He wished to make a gift of one thousand dollars to his son John W. Clarke, Jr.; and for that purpose, in said month, he drew the following check on the respondent: "Pay John W. Clarke, Jr., or bearer, ($1000) one thousand dollars," and gave the check to John, Jr., saying he "could get the money from the bank." The following appears in the statement of facts: "However, after delivering the check he stated that he wished his son John, Jr., would not present the check until after his, John W.C., Sr.'s, death, and John, Jr., in consideration for his father's wish, kept the check and did not present it for payment until the morning after the death of his father, John W.C., Sr." Clarke, Sr., died on the 29th of September, 1898; and the next day the check was presented by John, Jr., to the bank and it was by the latter paid. At that time the respondent knew of the death of Clarke, Sr.
It is obvious that no importance attaches to the fact that "after delivery of the check" the drawer expressed his wish that the check would not be presented until after his death. Clarke, Jr.'s, rights, whatever they may be, were fixed by the delivery of the check and were not affected by what his father said afterwards; he could have cashed it immediately, and did not even say that he would not do so. We have therefore the simple case of a negotiable check on a bank made and delivered to the payee in the lifetime of the drawer, and not presented for payment until after the latter's death; but actually paid on presentation.
Appellants contend that the foregoing facts did not constitute *180 an executed gift, but was merely a promise to give because the drawer retained the power to substantially revoke it by drawing out the money before the presentation of the check given to his son, and because the money might have been levied upon by the drawer's creditors before such presentation. Some authorities in other jurisdictions are relied on; but they are mostly cases where insolvency had occurred between the drawing of a general check and its presentation, and creditors, receivers, etc., had intervened and prevented its payment; and it was held that such general check, unpaid and not certified by the drawee, did not create a preferred equitable lien on a special fund. We have been referred to no case where it was held that a negotiable check was not good merely because the drawer had died before presentation and payment. The check was itself property. If it had been presented the day before the drawer's death, the bank, of course, would have had no legal cause to refuse its payment; and what legal cause did it have for such refusal when it was presented the day after his death? How did his death affect the validity of the negotiable instrument in question? No rule like that which obtains in cases of agency can be here invoked. Of course, in such cases, when the principal dies the agency ends; but there is no relation of principal and agent between the parties to a negotiable instrument; it is the same after as before the death of the maker. It is said that Clarke, Sr., could have drawn the money from the bank at any time before Clarke, Jr., had presented the check in question. Certainly he had the naked power to perform that wrongful act, although he could not have done so rightfully; and in that event, if the bank, having no knowledge of the former check, had paid the second check of Clarke, Sr., as it might safely have done, then Clarke, Jr., would have been put to his remedy on his check against the drawer. But Clarke, Sr., did not do that act. When Clarke, Jr., presented the check, no other check having been presented, the bank would have had no defense for a refusal to pay it.
Our conclusion is, that the delivery of the check gave Clarke, Jr., who could have cashed it at any time, such immediate possession and control of the thing intended to be given as constituted a completed and perfected gift.
*181The judgment appealed from is affirmed.