New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1882-09-19
CERT[ELED CHECKS.

A recently published decision of the Court
of Appeals on the subject of " raised checks IS
of interest to bankers, as indicating that the
views of the courts are stricter than the
common practice of business men. The check
involved was originally drawn by Chicago
bank upon the New York National Banking
Association for 1854. 1t was sent by mail to
n New Yorker who never received it appar-
emily it was stolen from the mall at any rate
the Chicago bank wrote to the New ork bank
saving that it had miscariled ana asking 10
have payment stopped. Meantime some one
had presented it mt the New 0rk BANK LOT
certiGcation and it had been duly certified.
The check was afterward "ralscd by some
of tho various devices known to swndlers TO
S2,54O. The swindler who held it then went
among Wall Street brokers negotiating 10 buy
bonds, and having agreed for $1,000 worth,
offered this raised check in payment The
broker before accepting it, sent 1t by meSSen-
ger to tho New-York bank, to learn about 1t.
No doubt he wished to he informed broadly ana
fully whether it was Il good check-Whether the
So, $40 would be paid-and few brokers send
ing a boy on such an errand would give very
precise instructions as to what he should say !;
but the form of question put by the messenger
to the paving teller was: Is that certlticatlon
goodY" Observe the language, for the Court
laws stress upon it. The paying teller under
stood the inquiry to mean: Is the certificate
genuine He answered: /" Yes" This was
true and was said in good faith. The certll-
cate was genuine one, t upon the check'
however, before the "raising," and when IL
called for only $254. The teller did not know
that the check shown him calling tor 80 8 40
was the stopped check for go !, and nothing
was said to him by the messenger to call his
attention to any question OF that sort. Inc
messenger then returned to the broker with
the assurance that the certlicatlOn was goou :;
the broker accepted the check and delivered the
bonds the swIndler departed with them TO
parts unknown, and the broker deposited the
check. When it came to the New \ ork bank
for payment, that bank refused 1t; ana the
broker sned the bank, claiming that as the tell
er's assurance that " the ccrtiicaton was good
had led him to accept it, the bank could not
dishOnor it.
The Court has, however, sustained the bank
in its refusal, holding that the telers assurance
was limited by the language of the question ana
his answer; viz, that " the certihcatiOn was
good" vi course lllt CdSe gave lloo w ulo'"H-
sion rs to the exact effect of certifying check !;
and the Judges say that it means simply that
the signature of the drawer is genuine, that he
has money on deposit to meet it, and that the
| bank will not pay out that money on other
| checks. But it is not guarantee that the cheek
| has not been raised" On the contrary, II a
| bank discovers that a check has been raised,
| whether the fraud was committed before or
| after certifying, il may refnse payment Ger
| tilication does not mean that the bank promises
| absolutely to pay the check, but only that the
| bank will pay whatever is lawfully due by the
| check. The teller was bound to answer the
! inuuires put by the brokers' messenger truly
| Gf he answered ut alb, and to refrain from mis-
| leading him 4; but he did answer truly the only
| question put. If the broker desired TO know
| whether the bank stood ready TO pay T2,51O
ON the check, under all circumstances, he
should have sent more comprehensive ques-
| ton.
The decision is noteworthy because the idea
has widely prevailed among business men, and
! is supported by some decisions elsewhere, that
although a bank certifying "A check cannot be
compelled to pay it if aiterward raised, yet If
tho raising is done first and the bank certies
afterward the bank is liable for the enlarged
amounts is liable, in short, for the face OF the
check as certified. Such view is ncgatiyed by
the new decision a certifying bank is only
bound TO hold the sum really due by the cheek.