Court Opinion

ID: 3298084
Source: CourtListenerOpinion
Date Created: 2016-07-05 17:15:14.127762+00
Date Added: 2024-06-11T13:44:55.831101
License: Public Domain

I dissent, and think that the judgment should be affirmed. I adhere to the opinion delivered in Department; and in addition to the views there expressed I desire to say this: The legal right of the bank to pay the check was in no way affected by the fact that it was a gift. It was a negotiable instrument in due form having the genuine signature of the drawer, and the bank was in no way called upon to inquire why it had been drawn. It did not know that the check was a gift — whatever consequences might have attached to such knowledge. It is beyond question, then, *Page 176 
that appellants' whole case rests upon the asserted proposition that the death of the maker of a negotiable check revokes the instrument. To that proposition I cannot assent. If the death of the maker, ipso facto, revokes the instrument, as in ordinary cases of principal and agent, then that result follows irrespective of the knowledge of the bank that such death had occurred. Certainly the general banking business of the country is not conducted upon any such notion. A paying teller of a busy bank postponing the payment of checks until he can by messenger, telephone, telegraph, or mail learn whether the payors have died since signing, would be a curious spectacle. If such precautions were necessary, banking business would be paralyzed.
It is said that Clark, Sr., might have countermanded the check before it was paid, or have drawn out the money on other checks. But he did not do so; neither did any other person representing him. A power of revocation is of no consequence unless exercised in the lifetime of the party holding it. This is so even in trusts. In Stone v. Hackett, 12 Gray, 232, the court say: "A power of revocation is perfectly consistent with the creation of a valid trust. It does not in any degree affect the legal title to the property. That passes to the donee, and remains vested for the purposes of the trust, notwithstanding the existence of a right to revoke it. If this right is never exercised according to the terms in which it is reserved, as in the case at bar, until after the death of the donor, it can have no effect on the validity of the trust or the right of the trustee to hold the property." The same principle applies in the case at bar. In nearly all the cases relied on for appellants the party on whom the check was drawn had received some notice of countermand or objection to the validity of the check, and had refused to pay it; and in most of them the action was by the drawee against the payor, which kind of action, according to some of the authorities, can never be maintained. For instance, in Simmons v.Savings Society, 31 Ohio St. 457,1 much relied on in support of appellants' position, the administrator of the deceased drawer had notified the defendant not to pay the check, and had undertaken to revoke it, and defendant had refused to pay it. In *Page 177 Fourth Street Bank v. Yardley, 165 U.S. 643, it was merely held that "as between a check-holder and the bank" the former cannot maintain an action against the latter, unless the check be accepted by the bank; and that the mere giving and receiving of such a check without its presentation and payment does not give the holder a priority over the general creditors of an insolvent. There are many authorities contrary to both these propositions; but those questions do not arise in the case at bar; here the check was accepted and paid in due course. The action is not brought by the holder of a check against the bank; neither does any question arise here about the assignment, equitable or otherwise, of a fund. The only question is whether after a bank has paid a genuine negotiable check of its customer it can be made to pay it again for the sole reason that the drawer had died the day before its presentation. Appellants have cited some authorities, a few of which apparently support this proposition, but they nearly all deal with cases where there had been an action by the holder against the bank. If there are any which hold that when the bank had accepted and paid the check, under circumstances like those in the case at bar, it can be made to pay it again, they are not founded on just principles and correct reasoning.
In my opinion, the true rule is stated in McGregor v. Loomis,
1 Disn. 247, where the subject of the legal significance of checks is fully discussed and the authorities cited. The court there says that a banker, following the ordinary business of his calling, "gives the community to understand that those who have funds in his hands have not only the right to draw upon the deposit, but that all drafts will be paid on presentation; he opens virtually a letter of credit to his depositor which is a guaranty to him, as well as to all who make advances upon the faith of it. For all practical purposes, it assimilates itself to a parol promise to accept any check that the owner of the deposit may draw; and thus the rule which binds the drawee of a bill of exchange as an acceptor, when he has promised in advance to honor it, furnishes a strong analogy," citing cases. The opinion contains a quotation from Harris v. Clark, 3 N.Y. 120,1 as follows: *Page 178 
"The customer deposits his money in a bank for safekeeping, with the understanding that he may draw by checks, in such sums, and at such times, as may suit his convenience. The bank or banker receives it in that condition, and undertakes to keep the amount and pay the money accordingly. Checks are used and treated as cash, and by the course of business they are paid by the bank or banker on whom they are drawn with the same punctuality and certainty as if the deposits were specifically the money of the customers. Checks are therefore practically equivalent to a transfer of so much of the fund deposited." The same general principle is stated by this court in Janin v. London and S.F.Bank, 92 Cal. 22,1 where the court says: "It is well settled that a bank, in receiving ordinary deposits, becomes the debtor of the depositor, and its implied contract with him is to discharge this indebtedness by honoring such checks as he may draw upon it, and it is not entitled to debit his account with any payments except such as are made by his order or direction.(Crawford v. West Side Bank, 100 N.Y. 50;2 Phœnix Bank v. Risley,111 U.S. 125.)" In Hart v. Ketchum, 121 Cal. 426, it was held that if the delivery of the bank-books, "the means of obtaining the money," had been intended as a gift in præsenti, the gift would have been perfect; and the principle there announced seems to cover the case at bar. It was there said that "If the donee is merely empowered to draw the money, and is thereafter to dispose of it in accordance with instructions from the donor, he is only an agent of the donor and his agency terminates with the death of the donor"; and is not that substantially a statement that if there had been no instructions as to the disposition of the money the doctrine of agency and its termination by death wouldnot have applied? Of course, a bank is not bound to pay a check unless at the time of its presentation there are funds of the drawer to pay it with; and therefore the bank is in no danger of incurring the risk intimated in the leading opinion in the case at bar.
But, as hereinbefore stated, the question involved here relates to the rights of parties to a negotiable instrument, and not to the validity of a gift.
  Henshaw, J., concurred. *Page 179
The following is the opinion of Department Two, rendered on the eighteenth day of November, 1901, referred to in the dissenting opinion of Mr. Justice McFarland: —
1 27 Am. Rep. 521.
1 51 Am. Dec. 352.
1 27 Am. St. Rep. 82.
2 53 Am. Rep. 152.