Summary
recognizing that a bank is liable on a check it has certified
Summary of this case from Schering-Plough Healthcare Products, Inc. v. NBD Bank, N.A.Opinion
Docket No. 73.
Submitted June 10, 1926.
Decided October 4, 1926.
Error to Ingham; Carr (Leland W.), J. Submitted June 10, 1926. (Docket No. 73.) Decided October 4, 1926.
Case by the Gordon Fireworks Company against the Capital National Bank for the conversion of a check. Judgment for defendant on a directed verdict. Plaintiff brings error. Affirmed.
C.W. W.S. Foster, for appellant.
Brown Kelley ( W.C. Brown, of counsel), for appellee.
John S. Gordon owned 98 per cent. of the capital stock of plaintiff, an Illinois corporation, and was president and treasurer thereof. He testified that he was "really the corporation." He received a check payable to the order of plaintiff and drawn on the defendant bank. He handed the check, without indorsement, to an employee of plaintiff, one Ravenscroft, and directed him to take it to the bank and get a cashier's check for it. He said nothing of indorsement to the employee. When the check was presented for payment it was indorsed. The indorsement is not in the record, but it was testified that it was "a simple indorsement," that the check bore "the indorsement of the Gordon Fireworks Company." The indorsement was made by Ravenscroft before presenting the check for payment. He asked for cash, got it, and fled. These are the essential facts. This suit followed. A verdict was directed for defendant and judgment entered. Plaintiff brings error.
This is a suit by the payee, the holder of the check, against the drawee, the bank. The case is ruled by Lonier v. Savings Bank, 149 Mich. 483, where the bank cashed a check in like circumstances:
"This court is committed to the doctrine that the holder of an unaccepted check has no right of action against the drawee, and that the check does not operate as an assignment of the amount named in it, in the drawee's hands, a doctrine supported by the Federal case mentioned. Although there is a want of harmony in the cases, those in Illinois especially indicating a different doctrine, we see no occasion to depart from the rule as heretofore settled for this State;" citing First National Bank of Washington v. Whitman, 94 U.S. 343, and our own cases of Brennan v. National Bank, 62 Mich. 346, and Grammel v. Carmer, 55 Mich. 201 (54 Am. Rep. 363). See, also, Cincinnati, etc., R. Co. v. Bank, 54 Ohio St. 60 (31 L.R.A. 653, 56 Am. St. Rep. 700).
We quote section 6230, 2 Comp. Laws 1915 (section 191, negotiable instruments law):
"SECTION 191. 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."
Of acceptance, it was said in Brennan v. National Bank, supra:
"A bank is not liable on a check unless certified or accepted. Checks are sometimes certified, which amounts to an acceptance; but that is the only form in which a liability can very well be created, unless, perhaps, by some recognition by estoppel, and, under our statutes, every acceptance must be in writing."
And we quote section 6228, 2 Comp. Laws 1915:
"SECTION 189. Where a check is certified by the bank on which it is drawn, the certification is equivalent to an acceptance."
For review of conflicting decisions on this question, see 2 Daniel on Negotiable Instruments (6th Ed.), § 1635 et seq.
Appellant argues that our cases cited have been in assumpsit and that a different rule should be applied here for the reason that its declaration has a count for conversion. The bank did not convert funds of plaintiff. The check was not an assignment of the amount named in it. Again the Lonier Case is the answer.
That Ravenscroft had implied authority to indorse as he did, that indorsement was required and necessary, and that upon such indorsement the bank might pay cash, are questions which need not be considered.
Judgment affirmed.
BIRD, C.J., and SHARPE, SNOW, STEERE, FELLOWS, WIEST, and McDONALD, JJ., concurred.