Continental National Bank v. M. Cornhauser & Co.

Gary, J. These parties are both corporations. In the language of the appellant’s brief the question in the case is, “ Ought the bank (to) be barred of its action because its agent procured the check to be certified, when he might have got the money ? ” No question is made that the action of the agent was not the action of the bank; the only claim by the appellant is that procuring the check to be certified had no effect upon the relations of these parties to each other. The circumstances were that the bank bad for collection a note made by the appellee, due October 1, 1888, not payable at the bank, and sent its agent to collect it. The appellee gave to the agent its check for the amount of the note on the Traders Bank of Chicago. The agent, in returning to the appellant bank, stopped at the Traders and had the check certified by that bank, which then charged it up to the account of the appellee. The agent might have had the money upon the check if he had then required it. All this happened about noon October 1,1888. The next day the Traders, being insolvent, did not open its doors for business, and the appellant now seeks to recover from the appellee the residue of the amount due on the check, unpaid from the assets of the Traders Bank. The case is of first impression in this State. It has been held several times that when the drawer of a check delivers it already certified, the relations of the payee or holder and the drawer are not affected by the circumstance that the check is a certified check; their duties and obligations toward each other remain the same as they would have been had the check not been certified. Bickford v. First Nat. Bk., 42 Ill. 238; Rounds v. Smith, Ibid. 245; Brown v. Leckie, 43 Ill. 497. And the last case also holds that whether the bank on which the check is drawn actually charges the amount of the check to the account of the drawer or not, is immaterial. The general rule of law, that where the payee of a check receives it from the drawer, in the same place where the bank on which it is drawn is located, the payee has all the banking hours of the next day in which to present it, in order to hold the drawer responsible for non-payment, is not disputed. The position of the appellee is that, although the appellant might have delayed the presentation of the check until October 2d, and if not then paid, held it responsible, yet as in fact it did present it and have it certified October 1st, it was bound then to take the money, or leave it with the Traders Bank, at the risk of the appellant. And in this position it is sustained by all the authority there is upon the subject. First Nat. Bk. v. Leach, 52 N. Y., 350, and many cases cited in Boon v. First Nat. Bk., 123 Ind. 78. There is good reason for this doctrine. If the appellee during the business hours of the afternoon of October 1st, had become suspicious of the Traders Bank, and this check had not been certified, it might have drawn its funds from the bank, for it paid all that day. But this check being certified took the amount of it out of its control. Brown v. Leckie, 43 Ill. 497. The appellant, having the opportunity, did not, and the appellee could not, take the money while it might have been obtained. And this condition was the result of the action of the appellant; it therefore should bear the consequence. It is true, the same condition would have existed had the check been certified before it was delivered by the appellee; but then it would have been the result of their action, and justly the consequence would have fallen upon them. The rules of law governing commercial paper are, and ought to be, general; such as are convenient and just in business in the mass, and not subject to qualification and uncertainty because of the effect of their application in particular instances. There is nothing in this case to show that the credit of the Traders Bank was shaken during the day on which the check was certified. In the case cited from New York the bank failed on the same day that the check was certified at the instance of the holder, and still it was held that the drawer was discharged. Says Judge Beckham: “If he (the drawer) apprehended damages from the suspected failure of the bank, he could not draw out that money, because it had already been appropriated by means of the check thus certified.” In Wood v. Merchants’ S. L. & T. Co., 41 Ill. 267, where a note held by that company, made by Wood, payable at the banking house of J. G. Conrad, was presented by the company when due at the banking house of Conrad, and certified to be “good,” the Supreme Court in holding Wood liable say: “ The whole case, in the view we take of it, turns on this proposition: Had the holder this right (to receive the money) and had Conrad any authority whatever to pay the note, out of the funds on deposit in his bank to the credit of the makers? ” And answering this in the negative is made the ground of the decision that Wood was not discharged. It can scarcely be doubted what the decision of the Supreme Court, as then constituted, would have been on this case if it had been presented to them. The court below decided that the appellee was discharged, and that decision is affirmed. Judgment affirmed.