Pollack v. National Bank of Commerce

NORTONI, J. This is a suit to recover the amount of a deposit made by plaintiff in defendant bank. Upon the court overruling a demurrer to defendant’s answer, plaintiff declined to proceed further and suffered a judgment of dismissal to go against him. Prom this judgment he prosecutes the appeal. It is alleged in the petition that on September 30, 1910, and for a long time prior thereto, plaintiff was a depositor in the defendant bank, the National Bank of Commerce in St. Louis; that on said day he indorsed and deposited in defendant bank a check on said bank drawn by the Noonan Real Estate Company to his order, directing it to pay him $427.12; that the defendant bank received the check and entered the amount therefor in his pass book as a deposit and stamped the check with the receiving stamp, marked it ‘‘0. Z.,” and passed it to its bookkeeper, who thereupon entered the same to his credit in the books of the bank; that on the nest day defendant requested plaintiff to reimburse it for the amount of the check, as the drawer thereof, Noonan Real Estate Company, did not have sufficient funds in the defendant bank to cover the same, and that this the plaintiff refused to do. Thereupon defendant, against plaintiff’s objection, wrongfully charged plaintiff’s account with said sum of $427.12. On this state of facts, plaintiff seeks judgment on the theory that defendant bank became his debtor upon receiving the check and crediting it in his [373] pass book and the books of tbe bank as though the same were a cash transaction. Defendant bank, by its answer, denies that the demand for reimbursement and” the charging back were made on the day following the alleged deposit, but admits that both plaintiff and the Noonan Real Estate Company, drawer of the check, were its customers and had for a long time theretofore each kept cheeking accounts therewith. It further pleads that there then was and for many years theretofore had been a usage and custom in the defendant bank and in all of the banks of the city of St. Louis, which is and was well known by their depositors and to plaintiff Pollack, to the effect that, notwithstanding checks may be received by the bank and credited in the pass book of the customer and the books of the bank upon presentation, whether drawn on that or any other bank, the transaction is in every instance subject to the right of the bank to reject the deposit and charge the amount back to the depositor at any time during the same day if the bank discovers the drawer of the check has not sufficient funds on deposit to pay the same. In other words, it is alleged in the answer that all transactions of • this character are had between the bank and its customers subject to this custom and usage which obtains in defendant bank and in all of the banks of the city of St. Louis and is and was at the time well known to depositors of each bank and is and was at the time well known to plaintiff. The answer further sets forth that the Noonan Real Estate Company was without funds on deposit in defendant bank at the time of the presentment of the check and that this fact was discovered during the same day; that, upon the discovery of the want of funds of the drawer - of the check, the bank immediately notified plaintiff thereof and charged the amount of the check back to him under the custom and usage above mentioned. [374] Plaintiff interposed a demurrer to that portion of defendant’s answer setting forth the custom and usage * referred to, on the theory that, though such custom and usage obtained and notwithstanding his knowledge of the fact at the time the deposit was made, it constituted no defense at law. The court entertained a different view of the question, however, and overruled the demurrer as if such custom or usage so known to plaintiff at and before the time of the transaction justified the course of the bank in charging the amount of the check back to plaintiff during the same day. It is argued defendant ought not to be permitted to introduce evidence tending to prove such custom and usage and plaintiff’s knowledge thereof, for the reason that, if established in the proof, such custom or usage would infringe the law of commercial paper, which renders checks payable on demand. No one can doubt the essential characteristic of a check is that it shall be instantly payable on demand. In this respect a check is distinguishable from a bill of exchange, for the drawee of a bill is entitled to a reasonable time— at least one day — to determine whether he will pay or accept it. But as before said, a check is payable on demand, and, if nothing more appears, the bank upon which it is drawn should either pay or reject it upon presentment. [See Morse, Banks and Banking (4 Ed.), sec. 369; Chitty on Bills and Notes (11 Ed.), sec. 1, chap. 21, p. 353; 2 Daniel, Negotiable Instruments (5 Ed.), sec. 1566; McIntosh v. Lytle, 26 Minn. 336; State v. Vincent, 91 Mo. 662, 666, 667, 4 S. W. 430.] But be this as it may, no one will contend for a moment that it is not within the province of the depositor presenting the check and.'-the bank on which the check is drawn to expressly agree that the payment shall be deferred for a reasonable time, until the bank may ascertain whether or not there are sufficient funds of the drawer of the check in its hands to pay it. Such an agreement, instead of operating an infringement [375] of the established rule of law above stated, amounts to no more than a reasonable modification of its application in the interests of justice. If it were competent for the parties to thus expressly agree with respect to the matter, it would seem to be competent, too, for them to tacitly do so under the established custom well known to both which obtained in good faith throughout an extended course of dealing. It is unnecessary to determine the force and effect of the usage or custom set forth, generally speaking, for the allegation of the answer is that plaintiff well knew it. The precise question with which the court is concerned and in judgment here, therefore, is this custom and usage which was well known to plaintiff and necessarily acted upon by him in dealing with the bank. If, at the time the check was presented, plaintiff knew of this custom, as alleged in the answer, and notwithstanding presented the check for deposit in the usual course, it would seem that the precepts of natural justice alone suggest that he should be bound thereby as if an express agreement to that effect were entered into, for, otherwise, grievous loss might be entailed upon the bank dealing with him on the faith of the usage and his knowledge of it. In such circumstances, the principle of estoppel intervenes to preclude plaintiff and save harmless the bank dealing with him in the utmost good' faith, and this is true though’ the check presented for deposit is drawn upon the same or depositary bank as is the ease here. Touching the question of an express agreement or usage in such cases, Mr. Morse, in his work on Banks and Banking (4 Ed.), Vol. 2, sec. 569, says as follows: “When a check is presented for deposit drawn on the depositary bank, the bank may refuse to pay it, or take it conditionally by express agreement, or by usage, if such a one exists, as in California; but otherwise, if it pays the money, or gives credit to the de [376] positor, the transaction is closed between the bank and the depositor, unless the paper proves not to be genuine, or there is fraud on the part of the depositor. The giving of credit is practically and legally the same as paying the money to the depositor, and receiving the cash again on deposit. The intent of the parties must govern, and presenting a check on the bank, with a pass book in which the receiving teller notes the amount of the check, is sufficient indication of intent to deposit, and to receive as cash.” (The italics are our own.) [See, also, State v. Salmon, 216 Mo. 466, 522, 523, 115 S. W. 1106.] Prom what is said by Mr. Morse, it is obvious that an express agreement between the parties should prevail and that the intent of the parties must govern in every instance. As before said, it is unnecessary to rule here with respect to a general custom in the banks of St. Louis, for the case presents more than that, in that the answer avers plaintiff was' fully informed as to such custom. This being true, the matter of the intention of the parties is one for the jury to determine, and if it were found as a fact that plaintiff knew of the custom at the time the check was presented for deposit, it is competent to find, too, from this fact that an agreement accordingly equivalent to an express one existed between the parties at the time. Touching this matter, the answer tendered a question of fact, which, if established, would constitute a valid defense, and the demurrer was properly overruled. The judgment should be affirmed. It is so ordered. Reynolds, P. J., and Caulfield, J., concur.