284

rendered a statement of the account, which the depositor has retained for an unreasonable time without objection, the burden is upon him to show that the statement was erroneous. Where the depositor has given the bank timely notice not to pay a check, the burden is on the bank to prove that it had already been paid.28

285

Prima facie the title to a deposit is in the depositor,286 and if the bank pays to another the burden is upon it to show that he was entitled to it.287

A claimant in an interpleader suit must show a clear title.288

person named in the check, or that the depositor was guilty of negligence precluding him from disputing it. Murphy v. Metropolitan Nat. Bank, 191 Mass. 159, 77 N. E. 693, 114 Am. St. Rep. 595. See "Banks and Banking," Dec. Dig. (Key No.) § 154; Cent. Dig. §§ 518-521.

284 Anderson v. Leverich, 70 Iowa, 741, 30 N. W. 39; August v. Fourth Nat. Bank, 48 Hun, 620, 1 N. Y. Supp. 139. See "Banks and Banking," Dec. Dig. (Key No.) 154; Cent. Dig. §§ 518–521.

285 Albers v. Commercial Bank, 85 Mo. 173, 55 Am. Rep. 355. Cf. Brandt v. Public Bank, 139 App. Div. 173, 123 N. Y. Supp. 807. Sec "Banks and Banking," Dec. Dig. (Key No.) § 154; Cent. Dig. §§ 518521.

ante, p. 43. See "Banks and Cent. Dig. §§ 518–521.

286 Egbert v. Payne, 99 Pa. 239; Banking," Dec. Dig. (Key No.) § 154; 287 Patterson v. Marine Nat. Bank, 130 Pa. 419, 18 Atl. 632, 17 Am. St. Rep. 778. See "Banks and Banking," Dec. Dig. (Key No.) § 154; Cent. Dig. §§ 518-521.

288 Detroit Savings Bank v. Haines, 128 Mich. 38, 87 N. W. 66. See "Banks and Banking," Dec. Dig. (Key No.) § 154; Cent. Dig. §§ 518-521.

31. Liability of Drawer to Holder-In General.

32.

33.

34.

35.

36.

Presentment and Notice of Dishonor.

Reasonable Time for Presentment.
Negotiability and Transfer-In General.
Liability of Indorser.

Holder in Due Course.

37. Liability of Drawee to Holder.

38. Certified Checks-Liability of Bank.
39. Liability of Drawer and Indorsers.

CHECKS

30. DEFINITION-A check is an unconditional order in writing, addressed to a bank or banker, signed by the person giving it, requiring the bank or banker to pay on demand a sum certain in money to a designated person, or to order, or to bearer. In other words, a check is an instrument in the form of a bill of exchange, drawn on a bank or banker, and payable on demand.

In General

It is by the means of checks drawn upon his bank that a depositor usually obtains payment of his funds on deposit. In form a check is a bill of exchange, and it is distinguishable from other bills of exchange only in being (1) drawn upon a bank, and (2) payable on demand.1 Ordinarily the name of

1 Whistler v. Forster, 14 C. B. (N. S.) 248; McLean v. Clydesdale Banking Co., 9 App. Cas. 95; Bowen v. Needles Nat. Bank (C. C.) 87 Fed. 430; Garthwaite v. Bank of Tulare, 134 Cal. 237, 66 Pac. 326; Farmers' Bank of Nashville v. Johnson, King & Co., 134 Ga. 486, 68 S. E. 85, 30 L. R. A. (N. S.) 697, 137 Am. St. Rep. 242; Lester

the bank appears at the top of the instrument, immediately after the date, instead of at the end of the instrument, preceded by the word "To," as in the case of bills of exchange. The word "demand" is not used; but the order, which is a mere order to pay, without designation of the time of payment, is in legal effect an order to pay on demand.

2

It is often said, or within the terms of some statute held, that a check is a bill of exchange, although it is, of course, always conceded that a check has many peculiar incidents, and that all the rules governing a bill of exchange are not applicable to a check. A check is defined by the Negotiable Instruments Law as "a bill of exchange drawn on a bank payable on demand," and the same section adds: "Except as herein otherwise provided, the provisions of this act applicable to a bill of exchange payable on demand apply to a check." 3 This is well enough, but the exceptions are of so great importance that it is not improper to describe a check as a distinct commercial instrument.*

v. Given, 8 Bush (Ky.) 357; Weiand's Adm'r v. State Nat. Bank of Maysville, 112 Ky. 310. 65 S. W. 617, 56 L. R. A. 178; Exchange Bank of Wheeling v. Sutton Bank, 78 Md. 577, 28 Atl. 563, 23 L. R. A. 173; Bowen v. Newell, 8 N. Y. 190; Hobart Nat. Bank v. McMurrough, 24 Okl. 210, 103 Pac. 601. See, also, cases post, notes 16, 19. See "Bills and Notes," Dec. Dig. (Key No.) § 15; Cent. Dig. §§ 20, 21.

2 Rogers v. Durant, 140 U. S. 298, 11 Sup. Ct. 754, 35 L. Ed. 481; Garrettson v. North Atchison Bank (C. C.) 47 Fed. 867; First Nat. Bank of Montgomery v. Nelson, 105 Ala. 180, 16 South. 707; Laird v. State, 61 Md. 309; People v. Kemp, 76 Mich. 410, 43 N. W. 439; German Nat. Bank of Beatrice v. Beatrice Nat. Bank, 63 Neb. 246, 88 N. W. 480. See "Bills and Notes," Dec. Dig. (Key No.) §§ 1, 15; Cent. Dig. §§ 1, 20, 21.

* Negotiable Instruments Law, § 185.

4 Keene v. Beard, 8 C. B. (N. S.) 380; Hopkinson v. Forster, L. R. 19 Eq. 76; Mullick v. Radakissen, 9 Moore P. C. 69; Merchants' Nat. Bank v. State Nat. Bank, 10 Wall. 647, 19 L. Ed. 1008; Bullard v. Randall, 1 Gray (Mass.) 605, 609, 61 Am. Dec. 433; Blair v. Wilson, 69 Va. 170. See "Bills and Notes," Dec. Dig. (Key No.) §§ 1, 15; Cent. Dig. §§ 1, 20, 21.

TIFF.BKS.& B.-7

The principal differences between a check and a demand bill of exchange are in respect to the rules governing (1) the liability of the drawer, who is chargeable, notwithstanding delay in presentment of the check unless he has actually been prejudiced by the delay," and (2) the rights of the parties upon certification. In some jurisdictions the rule has prevailed that a check is an assignment pro tanto of the drawer's funds, and confers a right of action upon the holder against the drawee upon the refusal, if in funds, to pay the check; but since the general enactment of the Negotiable Instruments Law there are few jurisdictions, if there are any, where this rule survives. Among the distinguishing characteristics of checks, as contradistinguished from bills of exchange, are sometimes enumerated, also, the features that they are payable immediately on presentment, without allowance of any days of grace, and that they are never presentable for acceptance, but only for payment; but these features they have in common with demand bills of exchange.

Bank or Banker

To be a check, the order must be drawn on a bank or banker.10 If drawn on any other person, the instrument is a bill of exchange, and not a check.11 It seems that it need not appear on the face of the instrument that the drawee is a bank,12 but it is safer that this should appear; for it seems that otherwise a bona fide holder without knowledge that it

Post, p. 107.

• Post, p. 131.

7 Post, p. 127.

8 Post, p. 130.

9 See In re Brown, 2 Story, 502, Fed. Cas. No. 1,985. See "Bills

and Notes," Dec. Dig. (Key No.) §§ 1; 15;

Cent. Dig. §§ 1, 20, 21. 10 See cases ante, note 1; post, note 19. Contra: Industrial Bank of Chicago v. Bowes, 165 Ill. 70, 46 N. E. 10, 56 Am. St. Rep. 228 See "Bills and Notes," Dec. Dig. (Key No.) § 3; Cent. Dig. §§ 14-18.

11 Amsinck v. Rogers, 189 N. Y. 252, 82 N. E. 134, 12 L. R. A. (N. S.) 875, 121 Am. St. Rep. 858 (although styled a check on its face). See "Bills and Notes," Dec. Dig. (Key No.) § 3; Cent. Dig. §§ 14-18. 12 See Planters' Bank v. Keesee, 7 Heisk. (Tenn.) 200. See "Bills and Notes," Dec. Dig. (Key No.) § 3; Cent. Dig. §§ 14-18.

is drawn on a bank may treat it as a bill of exchange. On the other hand, it seems that the mere designation of the drawee as a bank, if the drawee is not in fact such, does not make the instrument a check. An instrument purporting to be drawn on a bank, when the bank had gone into liquidation, has been held not to be a check.13

Foreign Bank

Whether an instrument, otherwise in the form of a check, drawn upon a bank in another state or county in the form in which drafts are commonly made by banks for the purpose of remitting money, is a check or a bill of exchange, has been questioned. Although there are decisions to the contrary,14 it is almost universally held that such instruments are checks.15 Payable on Demand

Whether an instrument which is otherwise in the form of a check, but is by its terms drawn payable on a day subsequent to its date, is such, is a question on which there has been much controversy. It is conceded that a check is not entitled to days of grace,16 while a bill of exchange payable at a future date is entitled to grace in jurisdictions where grace has not been abolished by statute. Consequently, in determin

13 Harmanson v. Bain, 1 Hughes, 188, Fed. Cas. No. 6,072. See "Bills and Notes," Dec. Dig. (Key No.) §§ 3, 6; Cent. Dig. §§ 7, 8, 14-18.

14 Grammel v. Carmer, 35 Mich. 201, 21 N. W. 418, 54 Am. Rep. 363 (semble). See, also, La Due v. First Nat. Bank of Kasson, 31 Minn. 33, 16 N. W. 426. See "Bills and Notes," Dec. Dig. (Key No.) §§ 1, 13, 15; Cent. Dig. §§ 1, 20, 21, 28.

15 Bull v. First Nat. Bank, 123 U. S. 105, 8 Sup. Ct. 62, 31 L. Ed. 97; First Nat. Bank v. Coates (C. C.) 8 Fed. 540; Bowen v. Needles Nat. Bank (C. C.) 87 Fed. 430; Merchants' Nat. Bank v. Ritzinger, 118 Ill. 484, 8 N. E. 834; Harrison v. Wright, 100 Ind. 515, 58 Am. Rep. 805. See "Bills and Notes," Dec. Dig. (Key No.) §§ 1, 13, 15; Cent. Dig. §§ 1, 20, 21, 28.

16 Wood River Bank v. First Nat. Bank, 36 Neb. 744, 55 N. W. 239. See cases ante, note 15; post, note 17. See "Bills and Notes," Dec. Dig. (Key No.) § 130; Cent. Dig. §§ 297-309.