Bank check

“ As checks on bankers are in constant use, and have been adopted by the commercial world generally as a substitute for other modes of payment, it is important, for the security of all parties concerned, that there should be no mistake about the status, which the holder of a check sustains towards the bank on which it is drawn. ”

“ The first step in bringing about the payment is the act of the holder of the check in assuming and representing himself to have a right, which he has not, to receive the money. One who, by presenting forged paper to a bank, procures the payment of the amount thereof to him, even if he makes no express warranty, in law represents that the paper is genuine; and, if the payment is made in ignorance of the forgery, is liable to an action by the bank to recover back the money which, in equity and good conscience, has never ceased to be its property. ”

“ A bank incurs no greater risk in certifying a check than in giving a certificate of deposit. In well-regulated banks the practice is at once to charge the check to the account of the drawer, to credit it in 'a certified check account,' and when the check is paid to debit that account with the amount. ”

“ There are just two ways to collect money on checks, one by presenting them at the counter of the bank on which they are drawn and getting the cash and the other by sending them through the mail for remittance by draft drawn on some large city depository. The latter method obtains in 99 per cent of the hundreds of millions of checks drawn. The bank upon which the check is drawn makes a small charge of one tenth of one per cent to compensate for clerk hire, postage, stationery and the like. It is a perfectly legitimate charge in vogue and practiced for generations in banking circles. ”

“ The bank cannot discharge its liability to account with the depositor to the extent of the deposit, except by payment to him, or to the holder of a written order from him, usually in the form of a check. If the bank pays out money to the holder of a check upon which the name of the depositor, or of a payee or indorsee, is forged, it is simply no payment as between the bank and the depositor ”

“ Where a bank was entitled to a credit or payment corresponding to the excess which the sum of the checks presented by it exceeded the sum of the checks against it, the clearing house paid that bank the difference by drawing its check upon one or more of the debtor banks; and each member constituted the manager of the association its agent to draw a check or checks upon such member for any balance found to be due by that member. ”

“ Remember that if your check is
made payable to "Bearer" or to "John Smith or Bearer" it may be cashed
by anybody who happens to have it. Unless it is for a large amount the
paying teller of your bank will look only to see whether your signature
is correct, and, that being right, the bank cannot be held responsible
if the check should have come into the wrong hands.
A check drawn to order can be cashed only when the person to whose order
it has been drawn has indorsed it by writing his or her name on the back
and the bank will be responsible for the correctness of the indorsement. ”

“ On the contrary, the holder in such a case takes it subject to no equities of which he has not, at the time, notice; for a check is not treated as overdue merely because it has not been presented as early as it might be, or as a bill of exchange is required to be, to charge the drawer or indorser or transferrer. ”

“ No bank is bound to take notice of memoranda and figures upon the margin of a check, which a depositor places there merely for his own convenience, to preserve information for his own benefit; and in such case, the memoranda and figures are not a notice to the bank that the particular check is to be paid only from a particular fund. So, too, a mark on a deposit ticket, if intended to require a particular deposit to be kept separate from all other deposits placed to the credit of the same depositor, must be in the shape of a plain direction, if such a duty is to be imposed on the bank. ”

“ When a check on itself is offered to a bank as a deposit, the bank has the option to accept or reject it, or to receive it upon such conditions as may be agreed upon. If it be rejected, there is no room for any doubt or question between the parties. If, on the other hand, the check is offered as a deposit and received as a deposit, there being no fraud and the check genuine, the parties are no less bound and concluded than in the former case. ”

“ If a check is not protested, the maker of the check must prove that he has suffered loss by not receiving notice of non-payment. But the drawer of a draft, or the endorsers on any check, draft, or note are released, whether they suffer damage or not. Generally speaking, a check is a written request of a depositor to his bank to pay a certain sum to a certain party; whereas a draft is a written request of any one to a firm or individual, to pay a certain sum to a certain party. ”

“ Furthermore, the checks which the act declares Reserve Banks may receive for collection are limited to those 'payable on presentation.' The expression would seem to imply that the checks must be payable either in cash or in such funds as are deemed by the Reserve Bank to bean equivalent. A check payable at the option of the drawee by a draft on distant reserves would seem not to be within the limited class of checks referred to in the act. The argument for the Federal Reserve Bank is not helped by reference to the incidental power conferred by section 4. ”

“ It is also a a error to suppose that checks and drafts to any very great extent take the place of credit money. It facilitates business for a man to be able to carry his check book with him instead of the danger and inconvenience of carrying a large roll of bills; but the equivalent of each check he draws must be to his credit in bank to meet the check. If a man gives a check for $100, and that check is transferred to six different parties and pays in that way six different debts in the course of the day, it does no more than a $100 bill would have done. ”

“ You might just as well ask a strange bank to cash your check as to offer it your uncertified check for a collection on you. You would hardly cash a check for a stranger. Why should the bank take an equal risk for you? Yet nothing seems to rouse the ire of the average man more, than for the collection clerk to ask him to have his check certified. ”

“ The court told the jury very clearly that if the bank officer had any reason to believe that the defendants were seeking information in regard to the general validity of the check, or if they had been asked any question which related to the genuineness of the check as to amount or the names of the payees, his statement that it was all right would bind the bank. ”

“ If a bank may be held liable in any case upon a certificate of their cashier that a check is good when they have no funds of the drawer, it is not because the cashier is deemed authorized to make such a certificate, but because the bank is bound by his representation, notwithstanding it is false and unauthorized. ”

“ Nothing could be farther from the facts as they are accepted at the bank window. As a matter of fact, when a check made out in this erroneous way comes to a teller's window he is most likely to refuse to pay either amount. There is no law, written or unwritten, to justify the paying of the amount spelled out in the body of the check, regardless of the group of figures on its face. ”

“ The mere credit of a check upon the books of a bank, which may be canceled at any time, does not make the bank a bona fide purchaser for value. If after such credit, and before payment for value upon the faith thereof, the holder receives notice of the invalidity of the check, he cannot become a bona fide holder by subsequent payment. ”

“ We have called the instrument under which the respondent claims as assignee, a draft. But on its face it is called 'check.' The form was a general form furnished by the bankrupts and the purpose is said to have been that in continental Europe or some parts of it checks are not subject to the same stamp tax as drafts. It is said in a reputable work that the fact that the instrument purports to be drawn upon a deposit is what constitutes it a check. ”

“ Unless we are prepared to hold to the fullest extent the principle asserted by the plaintiffs in error, that the general statement that the check is good binds the party making it as to everything connected with its validity, this charge of the court is as favorable to them as them as it should have been, and is only doubtful as it militates against the bank. ”

“ Where several bank accounts are kept and a check register—in addition to the cash book—is used to keep record of the accounts with the various banks, it may happen that checks drawn on one bank are wrongly charged to another; that checks drawn, or deposits made one day, are not credited until the next; that certain drafts deposited with the bank for collection are not credited to the depositor’s account until collection is made, whereas the depositor debited the bank at the time of the deposit ”

“ This causes the New York bank to honor the check drawn against it. The check drawn on you has to find its way through the clearing house and it will be a week before it gets back. In the meantime the depositor has had the use of a thousand dollars.
"But when it comes to real kiting," continued the bookkeeper, "it is the banks themselves that do it. If a bank has a sudden call for $100,000 and hasn't the money, all it has to do is to send a messenger with a check to a friendly bank around the corner. The messenger gets the whole amount in cash. ”

“ Raised checks are an extensive source of loss and annoyance to banks and individuals. Many checks, after being written, mailed or sent, fall into the hands of persons who make a practice of “raising” the amounts for which the checks were originally intended and written, and then pass or have them cashed. For instance, a check written for ten dollars will be raised to one hundred dollars, or to whatever amount the raiser may believe it can be passed without arousing the suspicions of the bank, merchant or individual upon whom it is to be passed. ”

“ So when, without more, a bank receives upon deposit a check indorsed without restriction, and gives credit for it to the depositor as cash in a drawing account, the form of the transaction is consistent with and indicates a sale, in which, as with money so deposited, the check becomes the absolute property of the banker. ”

“ But in connection with banking and in ordinary commercial parlance it means money taken to a bank, left there, and understood to be subject to check or draft. [2] Money thus deposited and drawn on enters largely into the commerce of the country: checks and drafts are mercantile instruments, part of the machinery of trade, having commercial value and bearing no resemblance to the 'pass-book' held by the poor seamstress, or washerwoman, or cook, who can go but four times a year and after notice to have a debit entered in it. ”

“ It is insisted, however, that the authority to send checks to the drawee bank carries with it, by necessary implication, authority to accept a draft in payment from the drawee. We assume, for the purposes of the argument, that the obligation which the law imposes to collect only in money may be varied by a regulation, clearly and positively so providing, although, in terms, it relates only to the banks inter se, upon the ground that the owner of the check is bound by the knowledge and consent of his subagent. ”

“ A bank note, on the other hand, is both circulating medium and money. Between these two lies the final line of distinction between what is money and what is not. True, the line is delicately drawn, especially when we come to such checks as cashier's checks or certified checks, for the latter are almost identical with bank notes. Each is a demand liability on a bank, and each confers on the holder the right to draw money. Yet while a note is generally acceptable in exchange, a check is specially acceptable only, i.e. ”