An order on a bank to pay "provided the receipt form at foot hereof is duly signed, stamped, and dated," is not an unconditional order to pay and is therefore not a check. Bavins v. London & S. W. Bank, [1900] 1 Q. B. 270. But a check which bore at the foot the words "The receipt at the back hereof must be signed, which signature will be taken as an indorsement of the check," and on the back of which was a receipt form, is negotiable, since the order to pay is unconditional, the words at the foot not being addressed to the bankers and not affecting the order to them. Nathan v. Ogdens, 21 T. L. R., 775 (semble). The provision that a check is a bill of exchange is declaratory. M'Lean v. Clydesdale Banking Co., 9 App. Cas. 95. A deposit in the A bank by the drawer of a certified check on the B bank is not the same as a deposit of cash, although the amount is credited to the depositor, and if the B bank fails the depositor can not hold the A bank, no negligence in failing to present the check for payment being shown. Gaden v. Newfoundland Savings Bank [1899] A. C. 281, Privy Council. The practice of certifying checks does not appear to prevail in England. Chalmers, Bills of Exchange, 6th ed. 249. SEC. 186. A check must be presented for payment within a reasonable time after its issue or the drawer will be discharged from liability thereon to the extent of the loss caused by the delay. * The Illinois Act interpolates "and notice of dishonor given to the drawer as provided for in the case of bills of exchange" after the word "issue" in line two. The criticisms and comments on this section by Professor Ames, Judge Brewster and Mr. McKeehan will be found under section 89, supra. Mfg. Co. v. Summers, 143 N. C. 102, 55 S. E. 522, S. C. secs. 53, 59; Moskowitz v. Deutsch, 46 Misc. 603, 92 N. Y. Supp. 721, S. C. sec. 124. "Subject to the provisions of this Act,-(1) Where a check is not presented for payment within a reasonable time of its issue, and the drawer, or the person on whose account it is drawn, had the right at the time of such presentment, as between him and the banker, to have the check paid, and suffers actual damage through the delay, he is discharged to the extent of such damage, that is to say, to the extent to which such drawer or person is a creditor of such banker to a larger amount than he would have been had such check been paid. . (3) The holder of such check as to which such drawer or person is discharged shall be a creditor, in lieu of such drawer or person, of such banker to the extent of such discharge, and entitled to recover the amount from him." B. E. A. s. 74. Where the payee of a check indorsed and deposited it in his own bank, which credited him with the amount as cash to be drawn against, the bank became prima facie the owner of the check and not a mere agent to collect, and in order to charge the payee as indorser the bank must present the check to the drawee bank within a reasonable time. Aebi v. Bank of Evansville, 124 Wis. 73, 102 N. W. 329, 68 L. R. A. 964, 109 Am. St. Rep. 925. The indorser of a check does not waive delay in presentment and renew his obligation by procuring and indorsing a duplicate of a lost check from liability upon which he has been discharged by such delay. Ib. Although under sec. 185 a check is a bill of exchange payable on demand, it is intended for immediate use and not to circulate as a promissory note. Therefore the transfer of a check to successive holders, where it is drawn and delivered in the place where the drawee bank is located, does not extend the time for presentment. If the check is delivered on one day and is not presented before the close of banking hours the next business day, the drawer is discharged to the extent of any loss suffered from the failure to present. Gordon v. Levine, 194 Mass. 418, 80 N. E. 505, 120 Am. St. Rep. 565; Matlock v. Scheuerman, 51 Oregon 49, 93 Pac. 823, 17 L. R. A. (N. S.) 747, S. C. secs. 25, 53, 56; Dehoust v. Lewis, 128 App. Div. 131, 112 N. Y. Supp. 559. A check which, if presented during banking hours the next day after its receipt, would have been paid, was not presented until the second day and in the meantime the drawer failed. Held, that by the delay the holder made the check his own, and had no greater rights than ordinary creditors. Furber v. Dane, 203 Mass. 108, 89 N. E. 227; Gordon v. Levine, supra, was cited but the N. I. L. was not. Where a check is negotiated at a town distant from the drawee bank, it is not negligence to forward it for collection through the mails, even though it might have been more expeditiously sent by messenger. Nor is it necessarily negligence to send it to the drawee instead of to a third person for presentation, where payment was refused because of lack of funds of the drawer and its dishonor could not have been ascertained sooner if it had been forwarded to a collecting agent. Citizens' Bank v. First Natl. Bank, 135 Iowa 605, 113 N. W. 481, 13 L. R. A. (N. S.) 303, S. C. sec. 71. See also Plover Savings Bank v. Moodie, supra, sec 71, as to forwarding checks where the drawee bank is in another place. The payee of a check delivered on Sunday in payment of a debt can not hold the drawer on non-payment by the bank, although the check was presented within a reasonable time. And even though the check was invalid because delivered on Sunday, the payee can not recover on the original claim against the drawer if he failed to present the check for payment with due diligence before the drawee bank failed. Gordon v. Levine, 197 Mass. 263, 83 N. E. 861, 15 L. R. A. (N. S.) 243, 125 Am. St. Rep. 361, S. C. sec. 53. In an action on a check unpaid because of the payee's failure to present within a reasonable time and until after the closing of the drawee bank, the burden is on the plaintiff to show that the drawer has suffered no loss by said delay. Dehoust v. Lewis, 128 App. Div. 131, 112 N. Y. Supp. 559, semble. "Reasonable time" under this section is a question of fact for the jury. Wheeler v. Young, 13 T. L. R. 468. SEC. 187. Where a check is certified by the bank on which it is drawn, the certification is equivalent to an acceptance.35 For comment on this section by Professor Ames see supra, section 62. Where the drawer of a check before delivery to the payee procures its certification and the bank fails before presentation for payment, the bank is not liable on the check to the drawer, but only to the holder, and therefore the drawer on receiving the check from the payee can not set it off against a debt to the bank. Schlesinger v. Kurzrok, 47 Misc. R. 634, 94 N. Y. Supp. 442. Notice to a bank by a depositor that his certified check, indorsed in blank, had been lost and to stop payment would not justify the bank in refusing payment to a holder in due course. Poess v. Twelfth Ward Bank, 43 Misc. R. 45, 86 N. Y. Supp. 857, semble, S. C. secs. 16, 51. See also Unaka Bank v. Butler, supra, sec. 56, cf. Elliott v. Worcester Trust Co., supra, sec. 87, and Pease & Dwyer v. State Nat. Bank, infra, sec. 189. The payee of a check given to him for value transferred it, also for value, to plaintiff, but without indorsing it. The payee died the next day, and the drawer, although having no equities against the check, stopped payment. Plaintiff subsequently sent the check to the drawee bank, and the teller certified it without asking any questions. Held, that under sec. 49 N. I. L. the title of the payee vested in plaintiff, and that the bank was liable to him upon its certification. Meuer v. Phenix Nat. Bank, 94 App. Div. 331, 88 N. Y. Supp. 83, S. C. sec. 49. SEC. 188. Where the holder of a check procures it to be accepted or certified, the drawer and all indorsers are discharged from liability thereon.36 National Bank of Rolla v. First Nat. Bank of Salem (Mo. App.) 125, S. W. 513, S. C. sec. 62; Gallo v. Brooklyn Sav. Bank, 199 N. Y. 222. Schlesinger v. Kurzrok, 47 Misc. R. 634, 94 N. Y. Supp. 442, S. C. sec. 187, Meuer v. Phenix Nat. Bank, 94 App. Div. 331, 88 N. Y. Supp. 83, S. C. secs. 49, 187. 35 Not in B. E. A. 36 Not in B. E. A. The mere acceptance by the payee of a check certified by the procurement of the drawer is not a discharge of the drawer, even though the bank at the time the check was certified transferred the amount to the credit of the payee, such transfer being without the knowledge or acquiescence of the payee. Cullinan v. Union Surety & Guaranty Co., 79 App. Div. 409, 80 N. Y. Supp. 58. But where the holder procures certification of a check, this is payment to the amount of the check, and where the check contained a statement on the back that it was to be in full payment, such procuring of certification is an acceptance of the check in full payment. St. Regis Paper Co. v. Tonawanda Co., 107 App. Div. 90, 94 N. Y. Supp. 946. So also where the holder procured certification of a check sent in a letter stating that it was in full payment, although the holder after the certification wrote to the drawer and declined to accept the check in full payment. Dunn v. Whalen, 120 App. Div. 729, 105 N. Y. Supp. 588. The N. I. L. was not cited in this case. When the holder procures certification of a check, the drawer is discharged and the bank becomes a debtor to the holder and can not avoid payment by showing that the holder obtained the check from the drawer by false pretenses. The certification has the same effect as if the holder had drawn the money, re-deposited it and taken a certificate of deposit for it. But semble that if the drawer procures the certification, since he is not thereby discharged, either he or the bank can set up the fraud on the drawer. Times Square Automobile Co. v. Rutherford Nat. Bank (N. J.), 73 Atl. 479. Sed quaere as to this dictum, so far as concerns the liability of the bank if more than a reasonable time has elapsed since the delivery of the check to the payee whereby the drawer is discharged. SEC. 189. A check of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder, unless and until it accepts or certifies the check.87 Schlesinger v. Kurzrok, 47 Misc. R. 634, 94 N. Y. Supp. 442, S. C. sec. 187; Meuer v. Phenix Nat. Bank, 94 App. Div. 331, 88 87 The English Act makes no such provision as to checks specially, but section 53 (1) provides that "A bill, of itself, does not operate as an assignment of funds in the hands of the drawee available for the payment thereof, and the drawee of a bill who does not accept as required by this Act is not liable on the instrument." And section 73 provides that "Except as otherwise provided in this part, the provisions of this Act applicable to a bill of exchange payable on demand apply to a cheque." N. Y. Supp. 83, S. C. secs. 49, 187; Raesser v. Nat. Exch. Bank, Before its payment or certification by the bank the drawer of a check may countermand the order, and payment thereafter to the payee by the bank is wrongful. Pease & Dwyer v. State Nat. Bank, 114 Tenn. 693, 88 S. W. 172, cf. Unaka Bank v. Butler, supra, sec. 56; Poess v. Twelfth Ward Bank, supra, sec. 187. A bank is under no legal obligation to the holder of an unaccepted and uncertified check. Payment is therefore voluntary and can not be recovered back from a bona fide holder on the ground that the drawer had previously countermanded payment of the check. National Bank v. Berrall, 70 N. J. L. 757, 58 Atl. 189, 103 Am. St. Rep. 821. A drawee bank paid and charged to the account of the drawer checks indorsed by an agent of the payee who had no authority to indorse or collect the checks, and who appropriated the money. Held, that the bank was not liable to the payee in assumpsit for money had and received. B. & O. Ry. Co. v. First Nat. Bank, 102 Va. 753, 47 S. E. 837. It would seem that the plaintiff misconceived his remedy and that he should have sued the bank for the conversion of checks belonging to him. Ellery v. People's Bank, 114 N. Y. Supp. 108. A bank being asked to cash a check on another bank, telephoned to the drawee bank and was informed that the check was good" or "all right," and thereupon cashed the check, but before presentment for payment the drawer notified the drawee bank not to pay the check. Held, the drawee bank was not liable on the check, because it was not accepted or certified in writing. Van Buskirk v. State Bank, 35 Colo. 142, 83 Pac. 778, 117 Am. St. Rep. 182. Notwithstanding section 189, an action in equity will lie by the payee of a check to whom an assignment of the fund was also given, and such assignment will be upheld against subsequent claimants. Hove v. Stanhope State Bank, 138 Iowa 39, 115 N. W. 476. TITLE IV. GENERAL PROVISIONS. ARTICLE I. SEC. 190. This act shall be known as the Negotiable Instruments Law.38 The Nebraska Act omits this section. 38 "This Act may be cited as the Bills of Exchange Act, 1882." B. E. A. s. 1. 1 |