Case Name: TROPICANA POOLS, INC., a Florida corporation, Appellant, v. The FIRST NATIONAL BANK OF TITUSVILLE, a national banking institute, Appellee
Court: Florida District Court of Appeal
Jurisdiction: Florida
Decision Date: 1968-01-22
Citations: 206 So. 2d 48
Docket Number: No. 588
Parties: TROPICANA POOLS, INC., a Florida corporation, Appellant, v. The FIRST NATIONAL BANK OF TITUSVILLE, a national banking institute, Appellee.
Judges: MacMILLAN, HUGH, Associate Judge, concurs.
Reporter: Southern Reporter, Second Series
Volume: 206
Pages: 48–51

Head Matter:
TROPICANA POOLS, INC., a Florida corporation, Appellant, v. The FIRST NATIONAL BANK OF TITUSVILLE, a national banking institute, Appellee.
No. 588.
District Court of Appeal of Florida. Fourth District.
Jan. 22, 1968.
Rehearing Denied Feb. 12, 1968.
Robert W. Olsen, Orlando, for appellant.
Charles M. Harris, of Crofton, Brewer, Holland, Starling & Goshorn, Titusville, for appellee.

Opinion:
WALDEN, Chief Judge.
This is an appeal from a final summary judgment entered in favor of defendant in a suit for damages. It resulted from defendant-bank's refusal to honor its cashier's check issued to the plaintiff.
Plaintiff agreed to build a swimming pool for a Dr. Stiff. Dr. Stiff gave plaintiff, as a deposit, a personal check drawn on the defendant-bank. Later that day, Dr. Stiff telephoned plaintiff and said that he could not then go through with the pool project. The affidavits are in conflict as to whether Dr. Stiff specifically informed plaintiff that he was going to stop payment on the deposit check. He did, though, order the bank to stop payment on the check the next day.
Two days later, plaintiff presented Dr. Stiff's personal check to defendant-bank in exchange for a cashier's check in a like amount payable to the plaintiff.
Defendant discovered it had overlooked the stop payment order on the personal check. Thus, when the cashier's check was presented for payment by plaintiff, it was dishonored by the bank.
Plaintiff brought suit, alleging that the bank had dishonored the cashier's check. The bank moved for a summary judgment which was granted. Plaintiff appeals. We affirm.
There is no dispute concerning the fact that payment had been stopped on the personal check prior to the issuance of the cashier's check. Both parties have presented and argued substantially the same issue of law on this appeal: may a bank, on the ground of a lack of consideration, dishonor a cashier's check it has issued, when presented for payment by the original payee?
It is true, as stated in Ross v. Peck Iron & Metal Co., 1959, 4 Cir., 264 F.2d 262, 269, that, " the law is perfectly clear that a cashier's check cannot legally be countermanded or dishonored when presented by a holder in due course But was the plaintiff such a holder in due course? We think not.
At all times material to this cause, Florida was governed by the provisions of the negotiable instruments law. In the jurisdictions adopting the N.I.L. there was a distinct split of authority as to whether a payee of a negotiable instrument could be a holder in due course. Florida aligned itself with those jurisdictions holding that a payee could not be such a holder in due course.
We have found no Florida decisions considering the issue with specific reference to a cashier's check. However, the issue has been decided by other jurisdictions which also are of the view that a payee cannot be a holder in due course.
In Kinder v. Fisher's National Bank, the court held the general rule prohibiting the countermanding of a cashier's check not applicable since plaintiff was one of the original parties and not a holder in due course. The bank was permitted to refuse payment because of failure of consideration.
Likewise, the court in Mid-Central Towing Co. v. National Bank of Tulsa, set out in its syllabus this rule:
"2. If a bank issues a cashier's check without consideration, the failure of consideration is a matter of defense and the bank may properly refuse to honor the cashier's check when presented for payment by the payee as he is not a holder in due course."
Plaintiff is not a holder in due course, and it nowhere appears that he gave anything of value as consideration for the cashier's check. Accordingly, the decree of the trial court is
Affirmed.
MacMILLAN, HUGH, Associate Judge, concurs.
CROSS, J., dissents with opinion.
. Chapters 674-676, F.S.1965.
. For an exhaustive survey of the question of a payee as a holder in due course under both the Uniform Negotiable Instruments Act and the Uniform Commercial Code, see annotation, 2 A.L.R.3d 1161.
.Dade-Commonwealth Title Ins. Co. v. Biscayne Kennel Club, Inc., Fla.App.1962, 143 So.2d 713; St. Petersburg Novelty Works v. Battle, 66 Fla. 303, 63 So. 445. The reasoning of the decisions supporting the view that a payee may not be a holder in due course is that. Section 52 of the N.I.L. (Section 674.54, F.S.1965) clearly contemplates that such a holder must be one to whom the instrument was negotiated. But the payee takes through issue, an act distinct from negotiation.
. 1931, 93 Ind.App. 213, 177 N.E. 904. See also, Wright v. Trust Co. of Georgia, 1963, 108 Ga.App. 783, 134 S.E.2d 457.
. Okl.1960, 348 P.2d 327.
. A caveat must here be included. The Uniform Commercial Code, effective in Florida from January 1, 1967, expressly provides that "a payee may be a holder in due course." Section 673.3-302(2), F.S.A.