Court Opinion

ID: 9761405
Source: CourtListenerOpinion
Date Created: 2023-08-29 01:42:12.292955+00
Date Added: 2024-06-11T07:29:23.470923
License: Public Domain

Robert H. Dudley, Justice, dissenting, This case involves a personal money order, not a bank money order, not a certificate of deposit and not a certified check. A personal money order is for the convenience of anyone who does not have an ordinary checking account and needs a safe, inexpensive and readily acceptable means of transferring funds. The bank simply sells to the individual a check-sized form which has the amount impressed into the face of the paper, an identification number and the name of the issuing bank. No authorized representative of the bank signs the instrument. When the purchaser of the instrument decides to pass it, he dates it, enters the name of the payee and signs the instrument. Ark. Stat. Ann. § 85-3-104 (1) (a) (Add. 1961) requires that a writing be signed by the drawer or maker in order to be negotiable. Any item which is an order to pay is considered a “draft” and any draft drawn on a bank and payable on demand is a “check.” § 85-3-104 (2) (a), (b). Since the only signature on a personal money order is that of the purchaser, since the instrument takes the form of an order to pay, and since it is drawn on a bank and payable on demand, it is clearly within the classification of a check. The absence of the bank’s signature as a “maker” and the absence of any express “undertaking” to pay by the bank, § 85-3-102 (1) (c) and § 85-3-104 (2) (d) preclude a finding that the instrument is a note. Aside from “draft,” “check” and “note” the only other form of negotiable instrument recognized by the Uniform Commercial Code is a “certificate of deposit” and that requires an acknowledgement that the bank will repay it. § 85-3-104 (2) (c). Under these code provisions a personal money order must be classified as a check. There is no other code classification of negotiable commercial paper. § 85-3-104. For the sake of clarity in the law of commercial paper this personal money order should be classified as a check. However, the matter of classification is not nearly as important as the issue of liability. No authorized representative of appellee bank signed this check. Section 85-3-401 states: “No person is liable on an instrument unless his signature appears thereon.” Section 85-3-409 (1) states that a check or other draft is not an assignment of funds held by the drawee (appellee Union Bank) and the drawee is not liable until it accepts the check or draft. Appellee did not accept this instrument. It stopped payment. The language of these statutes, a part of the Uniform Commercial Code, is unmistakable. The majority opinion holds: The personal money order constituted an obligation of Union from the moment of its sale and issuance. I respectfully submit that statement is supported by absolutely no authority and it creates an unnecessary legal quagmire. Assume that a purchaser of a personal money order has not filled in the name of the payee or has not signed the check and it is lost or stolen. The purchaser then wants to stop payment before it is negotiated to a third party. The majority has stated that it was an obligation of the bank from the moment of sale and issuance. Fairness and logic dictate that the purchaser should not be allowed to stop payment and leave the bank liable. Yet, § 85-4-403 (1) provides: Customer’s right to stop payment — Burden of proof of loss. A customer may by order to his bank stop payment of any item payable for his account but the order must be received at such time and in such manner as to afford the bank a reasonable opportunity to act on it prior to any action by the bank with respect to the item described in Section 4-303. Comment 4 to this statute makes it abundantly clear that personal money orders are intended to be covered by this broad language. One of the three explanations given for the holding is: The issuance of the money order with the bank’s printed name evidences the appellee’s intent to be bound thereby. That notion will echo because the name of the drawee bank is printed on every ordinary check in circulation. The other two explanations are that banks should not be allowed to stop payment and business custom. Both explanations are dead letters. Assume, for the sake of argument only, that banks should not be allowed to stop payment. That occurrence takes place after the sale and issuance of the instrument. The majority has held that liability attached upon issuance. Therefore this subsequent event logically cannot have any effect on liability. It very simply is not a reason for a decision that liability attached at the time of issuance. Business custom is not proven. There is not one single word in the transcript or abstract about business custom. Even if this defense had been proven it would be an estoppel defense, or a defense which accrues after the sale and, once again, it would not be a reason for a decision that liability attached at the time of issuance. The master purpose of the Uniform Commercial Code is to clarify the law governing commercial transactions. The tragedy of this case is that both the purpose and the Code are emaciated for no reason. I dissent. I am authorized to state that Mr. Justice Holt and Mr. Justice Hays join in this opinion.