Opinion · New York Court of Appeals
Chapman v. . White
6 N.Y. 412
- Type
- Opinion
- Court
- New York Court of Appeals
- Jurisdiction
- New York
- Date
- 1852-07-05
- Topic
- general
*394 *Gardiner, J. — The question upon the facts stated is, whether the draft, under these circumstances, operated as an assignment of the deposit of the Geneva Bank, to the amount of the draft, either at law or in equity. The question has been decided by this court, in Cowperthwaite v. Sheffield (3 N. Y. 243), Harris v. Clark (Id. 93), and in Winter v.
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CHAPMANv. WHITE,6 N.Y. 412(1852)
CHAPMANagainstWHITE.
Court of Appeals of the State of New York.
July Term, 1852
Page 413
The Canal Bank paid interest upon and had the right to use the deposit, by arrangement, in their own business. They probably availed themselves of all the advantages secured by the agreement. The depositing bank was therefore a mere creditor at large of the insolvent corporation, and I do not see how their unaccepted bill of exchange placed the plaintiff in any better situation. The cashier was his agent for the purpose of paying the note, and as it seems to me for procuring an acceptance of the bill. As this was not done, there can be no pretense that he acquired any rights superior to that of his vendor, even if an acceptance would have availed him.Page 417
It is said that the instrument is a check. But a check is a bill of exchange payable on demand. (Harkerv.Anderson,21Wend. 373,and cases cited; Franklinv.Vanderpool,1Hall,80.) The drawee owes no duty to the holder, until the check is presented and accepted. Baron Parke remarked in a case decided in February last, that the holder "could not sue "the drawee unless he had accepted the check, a practice not "usual." (Bellamyv.Majoribanks,8Eng. L. and E. 523.) And inHarkerv.Anderson,(supra,) it was decided that no action could be maintained against the drawer, until after presentment and refusal of payment by the drawee, and notice to the former. Money deposited generally with a banker, becomes the property of the depositary. The right of the depositor is a chose in action. It is immaterial whether the implied engagement upon the part of the banker is to pay the sum in gross, or in parcels, as it shall be required by the depositor. In either case the draft or check of the latter, would not of itself transfer the debt, or a lien upon it, to a third person without the assent of the depositary. (Dykersv.The Leather Manufacturers' Bank,11Paige,616.) As Judge Cowen remarked inHarkerv.Anderson,there are dicta of learned judges, taking a distinction between checks and bills of exchange, but the whole current of authority is the other way. The supreme court, I think, erred in determining that the plaintiff was entitled to a preference in the payment of his debt, over the other creditors of the bank, and the judgment should be reversed.
There is however another consideration, not adverted to by that court, which has its influence with me; and that is, that the instrument on which this suit is brought is not a draft or bill of exchange, but a check. The whole argument of the appellant is based on the idea that it is a bill of exchange because it answersPage 418the general description of such an instrument, being "a written "order or request by one person to another for the payment "of money absolutely and at all events." This definition, being equally applicable to a check and a bill of exchange, would necessarily abolish all distinction between them. Yet nothing is better settled than that there is a marked difference between them, both as to their nature and effect. These incidents characterize a check: it must always be drawn on a banker; it must be payable on demand; it has no days of grace; and it need not be presented for acceptance, and consequently no protest for non-acceptance is necessary to hold the drawer. If any one of these incidents is wanting, the instrument is not a check, but if all unite, (as they do in this case,) it is. (2Story's R. 513; 3Kent's Com. 104,note a.)
These principles are well recognized in the English courts, and even in their statutes, which have put a restriction upon checks, which deprives them of this character unless drawn upon a banker within fifteen miles of the residence of the drawer. But we have no such restriction here, and when all the incidents unite, the instrument is a check, no matter what the residence of the parties. When the instrument is a check it is an absolute appropriation of so much money in the hands of the banker to the holder of the check, and there it ought to remain till called for, and the drawer has no reason to complain, unless upon the intermediate failure of the banker. (3Kent's Com. 104,notea; Crugerv.Armstrong,2John. Cas. 5;Littlev.PhenixBank,2Hill,430; 2Story's R. 516.)
Upon the remaining point there is also a consideration not dwelt upon below, and that is, what was the intention and consequently the duty of the parties? The intention of the plaintiff clearly was, that the $500 should be a special deposit with the Canal Bank for a specific purpose, and it was the duty of the bank upon receiving the check, either to return it and decline the task imposed upon it, or if it retained it, then instantly to transfer that sum from the account of the drawers of the check and place it to the account of the owner of it, for the specialPage 419purpose mentioned. By retaining the check the Canal Bank undertook to carry out the intentions of the plaintiff, and those intentions clearly were, to have that money put aside for a specific purpose, or in other words to have it made a special deposit.
I think the judgment should be affirmed.
Judgment reversed.
- Ante, Vol. 1, p. 525. ↩