Court Opinion

ID: 9587878
Source: CourtListenerOpinion
Date Created: 2023-08-21 23:27:32.449648+00
Date Added: 2024-06-11T09:03:36.311749
License: Public Domain

Harrison, J.,
dissenting.
I dissent from the holding of the majority that the check involved here was “cashed”. It is apparent that the check of Neuse Engineer*95ing and Dredging Company was “deposited” in normal course by Mrs. Kirby, and received and accepted for deposit by the Princess Anne Plaza Branch of the First and Merchants National Bank. The same bank official, quoted by the majority, also testified:
Q. “Did Margaret Kirby or William Kirby bring you a check to deposit on December 29, 1966?
A. “Yes, sir, they did.
Q. “Tell what happened to this particular check.
A. “We received it for deposit on Friday night, the 29th. We deposited $2,300 and gave back cash, $200. . . .”
(Admittedly the correct date of the deposit was Friday, December 30, 1966.)
This witness, the only one who testified in the case, was Mr. Floyd E. Waterfield, Vice President of the bank. From his testimony we learn that late in the afternoon of December 30, 1966,, Mrs. Kirby, a customer of the bank with an active checking account, came into the bank with the Neuse check. Apparently she desired $200 in cash. In making out the deposit slip, $2300 was erroneously written opposite the currency line,instead of opposite the check line. However, indicated in writing on the face of the deposit slip is a notation that the deposit was evidenced by a check drawn on another of the bank’s branches in the Norfolk-Virginia Beach area. Also on the face of the deposit slip is shown the manner in which Mrs. Kirby obtained the $200 she wanted, i.e. by deducting $200 from the $2500 check.
This was a perfectly normal and customary banking transaction. Mrs. Kirby, as a customer of that particular branch bank, presumably could have obtained $200 by writing her personal check, or by having the bank issue and she initial a debit memorandum or charge on her account, or by having the transaction reflected on the face of the deposit slip. She and the bank teller obviously pursued the latter course, and this was entirely in order. When the books of the bank were balanced for the day’s operations, the bank had a $2500 check of Neuse, which was offset or balanced against a cash withdrawal of $200, plus a tentative or provisional credit of $2300 in the Kirby checking account.
There is nothing in this record from which it could possibly be deducted that Mrs. Kirby walked into the bank and cashed the Neuse check for $2500. That is, she presented the check and demanded and *96received $2500 in cash, and afterwards redeposited $2300 of it in currency. This simply did not occur, and the evidence does not reflect it. While the bank officer does refer to “cashing the check”,, the evidence and the records of the bank show that it was not cashed, but was accepted for deposit and clearance as any other check.
The fact that the bank permitted Mrs. Kirby to withdraw $200 is of no significance. She was a customer of the bank, with a checking account. Had the withdrawal, absent the Neuse deposit, caused an overdraft, this would not have been unusual for banks permit customers to overdraw from time to time in reasonable amounts. Furthermore, at that time neither Mrs. Kirby nor the bank had reason to anticipate that the Neuse check would be dishonored because of insufficient funds.
If the check was deposited and not cashed, the next question faced is to determine the obligation of the Princess Anne Plaza Branch of the bank when the Neuse check was dishonored and returned to it because of insufficient funds. Admittedly, there is a statutory duty on the part of a bank, occupying the position of the appellee here, to send notice of dishonor.
Appellee requires, as a condition or prerequisite for the opening of an account by a depositor, that such depositor sign the written contract set forth in a footnote of the opinion. This contract in essence expressly provides that the bank, in receiving items for deposit, acts only as the depositor’s collecting agent, and that such items are credited subject to final payment.
The bank here was not dealing with a stranger. It was dealing with the Kirbys—customers of the bank—with whom they had a contractual arrangement. When the Neuse check was returned, the bank promptly communicated by telephone with the Kirbys and advised them of the return of the check. The Kirbys, with whom the bank enjoyed a professional and a semi-confidential relationship, and who had designated the bank as their collecting agent, promised “they would be in to cover”. The bank relied upon the agreement, and the Kirbys’ express representation, and withheld taking any action pending their arrival to attend to the transaction.
Normally the bank would have charged the Neuse check to the account of the Kirbys, attached a slip to it showing that it had been returned because of insufficient funds, and mailed to them. That would have completed the transaction insofar as the bank was concerned, and the Kirbys could have taken such action against Neuse as *97they felt proper. In the instant case the check was not returned for the reason that the bank had permitted the Kirbys to draw on their checking account in an amount which reduced their account below the sum of $2500. The Neuse check was the bank’s evidence of the obligation and therefore it could not properly be surrendered.
The purpose of prompt notification to a customer that a check deposited by him has been dishonored is two-fold: (1) So that the customer payee of the check can take prompt action against the drawer to recover, and (2) So that the customer will not draw checks on his account under the impression that his deposit, as evidenced by a dishonored check, is good, and that he has funds in the amount of the check in the bank.
The statute (Code § 8.4-301) in dealing with the return to a bank of an item, such as a dishonored check, expressly recognizes the possibility of the bank’s handling the check pursuant to the customer’s instructions. Here the customer not only contracted in writing that the bank, in receiving checks for deposit, would act as collecting agent, but,, upon notification that the Neuse check had been dishonored, agreed to come to the bank and take care of the overdrawn account.
This express promise to come to the bank and cover the overdraft, made upon receipt of notification of the check’s dishonor, was justification of the bank’s action in withholding formal written notice of dishonor, pending their arrival.
Under the circumstances, I am of opinion that the Kirbys are estopped by the depositor’s contract that they signed, and by their actions and dealings with the bank, from availing themselves of the provisions of Code § 8.4-212 (3) and § 8.4-301, requiring written notice.
I would affirm the judgment of the lower court.
Eggleston, C.J., joins in this dissent.