Senter v. Continental Bank

Hayden, J., delivered the opinion of the court. The appellant rests his case upon a single proposition, contending that the payee or holder of a banker’s check cannot maintain a suit at law against the bank having funds of the drawer, though presentation has been duly made and payment of the check demanded. This is a vexed question, and the decision of most respectable courts may be adduced on either side. Most of these decisions were carefully considered by this court in McGrade v. German Savings Institution, 4 Mo. App. 330, and Zelle v. German Savings Institution, 4 Mo. App. 401, and the contrary of the above proposition was reached as a correct conclusion. Though the [533] decision of the Supreme Judicial Court of Massachusetts in Carr v. Bank, 107 Mass. 49, has since reached us, we have seen nothing which leads us to alter our opinion, or to adopt a doctrine which, though asserted by most respectable authorities, appears to us to quietly ignore the peculiarities of bankers’ checks and the special features of the contract as understood between banker and customer, and as established by the usage of the business world. It surely cannot be said to accord with those principles on which the commercial laws of this country ought to be administered, that an assumed want of privity — which in many parallel cases the law supplies, that the intention of contracting parties may be carried out — should be strenuously insisted on in order that the intention of the parties to a commercial contract may be defeated. It would be less ambiguous to admit the intention of the parties aud the effect of their contract, according to the universal understanding of men of business and to their course of dealing, than to say that to this contract, though neither illegal nor contrary to the policy of the law, the law will not give its sanction by permitting the holder to maintain an action against the bank. It would not then appear, as it appears now from arguments used in some of the cases, as if it were impossible or illegal that the bank should beforehand agree with its customers that it would, if in funds, and in the absence of revocation, pay checks to such payees as might present them at the bank. But if an express agreement to this effect is permissible, why may not an implied one, or an agreement of which one of the terms is implied, raise a promise in favor of a payee, by analogy to that class of cases where the mere payee or recipient is some one unknown or unheeded, a person merely indicated by one of the contracting parties, and with whom the obligor has in the first instance nothing to do ? Surely there is no objection in principle to the recognition of such a contract, or to the payee’s right to sue because the bank does not in the first instance see him or know his [534] name. The obligation of the bank is to pay, upon presentment, to such person as shall be named, or to bearer; and if the law required specific designation and express privity between bank and payee, why should not modus et conventio supersede the requirement? The contract now insisted on has for its basis the common understanding of banker, customer, and holder; and this understanding rests upon a course of dealing as well established, perhaps, as any in the business community. We are referred to what is said by Mr. Morse in the recent-edition of his work on Banking (2d ed., p. 25), to the effect that the denial of the holder’s right to sue will probably hereafter become the doctrine generally accepted in this country. We are directly of the opposite opinion. The weight of reasoning, we think, is clearly in favor of the holder’s right. The contrary doctrine is equivalent to a confession that the law is incompetent to extend well-established principles to new cases as the latter arise from new contracts created by commercial necessities. All the judges concurring, the judgment is affirmed.