Port Royal commercial and Beaufort County Republican. [volume] (Port Royal, S.C.) 1873-1874, 1873-11-27
A Legal Question.

We clip the following from the Pitts
burg LaW Aduiser, as it will be Of in
terest to all, in legal point of view:-
Several weeks prior to the suspension
of Jay Cooke & Co., a party deposited
with them a certain amount Of money,
for which certificate of deposit was
given "paya6le on return OF this GER
tifcate Vith 6 per cent. interest,"" The
depositor presented it at country
National Bank, received the amount in
currency and indorsed the certificate.
The bank held the certificate as an in
terest fund without presentation until
subsequent to the suspension Of the
firm alluded to. Was the bank, in
order to hold the indorser responsible,
obliged to present the certificate at once,
or was it optional with the bank?
The question whether the bank should
have, at once, presented the certificate
of deposit in order to hold the indorser,
is a secondary one. The main question
is whether the indorser is at all liable !;
that is, whether his signature amounted
to an Endorsement with all its conse-
quences, or whether it was merely an
assignment of his right to the money
deposited. This is answered by finding
whether certificate of deposit is nego-
table or not. This has been decided
in the negative in Pennsylvania, in
Patterson VS.. Poindexter 6 W. & s. 227
(and approved in Charnley vs.. Dulles,
s ". & S. 353). In that case a certif-
cate of deposit was issued by the Mis-
sissippi Union Bank of Jackson, Miss.
and read as follows:
"I hereby certify that @. S. Tarply
has deposited in this bank, payable
twelve months from 1st of May, 1889,
with five per cent. interest till due, per
anpum, three thousand siz hundred and
ninety-one dollars and sixty three cents,
for use of r. Patterson & Co., and pay
able only to their order upon the return
of this certificate. Signed,
G. W. CLIFTON, Ass. Cashier,
The Endorsement was: Pay Edward
York, ESQ.,, or order r. B. Patterson &
Co., without recourse to me.
E. YoRKE.
Chief-Justice Gibson decided that
the instrument was net promissory
note, that "for purposes Of transfer
merely it was payable to order; for
purposes of commercial responsibility,
It was not negotiable" But "that it
was special agreement to pay the de-
posit to any one who should present
the certificate and the depositor's or
der"
The contents of the certificate in this
case not being given full, we have
quoted literally the one upon which
the above decision is based, but believe
that, from the few words given in the
questions, payable on return Of this
certificate with 6 per cent. interest" I"
there is not much, if any, difference
between them and in that case the
indorser is not liable, but the bank has
to suffer the loss, if any.
As the question may possibly now
arise also in other localities, we may
state that the above is not the general
law of this country. In Mississippi,
Illinois, Georgia, Connecticut, New
York, California and Iowa, it has teen
decided that certificate of deposit is
in effect a promissory note, and accord
ingly, an indorser IF such instrument
in these States would be liable. This
question, as far as We know, has not
been decided in Virginia or W. Virgin
ia, but we think that, should such case
come before their coul.ts, they will fol-
low the Pennsylvania decision, as it
stands more to reason to construe a
certificate of deposit ass special con-
tract, than to class it AS a promissory
note, it wanting the essential feature
of promissory note-a direct and un-
qualified promise to pay.