, 1882-10-06
Negotiable Instruments,

chicago LcJW Nc~s.
,uly,s Jones of tle Court Ot Common
Pleas at Cleveland, has recently declthd
n novel and interesting point of law re-
sp,cting negotiable Instruments. The
suit was by the holder against the draw
ar of cuacn. The check was payable
to order, duly inlorsed in blank, and
transferred to the plaintiff On pr 90, a,
ton the bank, drawec, demanded that
the holder should also lndOrSe 1t. lnr
no refused t. 40, and thereupOn had tue
cheek protested, and brought this suit
,Judge JOueS holds that the bank had no
ripht to make such requirement, althO
II was proved tldt such was the local
custom, and holds that the cheek was
proparly uIshOnured \ correspondent
asks us if We think this good law. Our
IMPRESSION is thai it Is. he bank had
certainly no right to demand the
holders Endorsement rs additional Sc
curity, for 10 was bound to pay the de-
post on the deposlters order The in
dorsement would not be held to ascer-
tain or guarantee the gcnuinenes5 OF the
payee's mo sem 5nt. III the cLecH had
been drawn or ndOrsed payable to the
order ul the nOlder, tle bank might have
reasonably dem n led, ii he were a
stranger, that De identity himself as the
owner, aud II might reasonably demand
evidence of the genulncness OF the pay
ee's Endorsement i'll hlanG, but nothing
more. Ne think Judge Jones is right
wheA lie SAYS "A bank Is ordinarily pre-
sumed to Know the signatures of It's own
customers and depusitors; but 1t wall
not he seriously doubted that when a
check Is drawn on bank, which u a
stranger to the payee and his signature,
the bank is entitled to Il reasonable time
in which to ascertain the genulnenesS of
the Endorsement, before paying check
payable to his order; and indeed some Of
the authoritleS.saem to Justify IL bank or
banker in calling on the holder of such a
bill or check, wncn it is reasonable to do
so, to furnish proof that the Endorsement
is the genuine one Of the payee; but III
this case neither of these things was re-
qulred or asked; there was no demand
by the bank for proof OF the signature,
nor for reasonably delay to satisfy it,
self of the commences Of the indOrSc-
mant, but there was simply an absolute
refusal to pay unless the person who
who presented the check would indorse
it, That this refusal to pay without
such Endorsement is not iustiIied by COM
mercial law, is, we think, perfectly clear;
it is an attcmot to limit the negotiabllity
OF sucn paper, and to tx terms and con-
dition3 for its payment not warranted by
the law or by the drawer OF the cheek,
and to which neither he nor the holder
is obliged to submit. The implied con
tract of bank with its customers is to
pay their checks according to the law
merchant" In respect to the custom iC
may be said that 1t was merely local, con
trary to the law merchant and unavail-
ing to protect the drawee, and therefore
unreasonable. The custom Of u bank is
available for certain purposes, even
where 1t is contrary to the law merchant,
as, for example, where it is its custom to
demand payment and give notice of nom
payment on the next succeeding the
third day of grace mills vs.. Bank of the
United States, IL Wheat, 43l) or to give
notice by mail to indorsers residing in
the place where the bank is situated,
Carolina National Bank vs.. Wallace, 13
>. g., 34t; >. g., 36 Am. Rep. G0l. But
these customs do not tend to change the
contract of the bank, rs the custom in
question does. We take it that no Gus
ION OF a contracting party can set up to
excuse his Ron-fulhllment of his CON
tract.