Citations
- 79 Ohio St. 189
Full opinion text
Summers, J.
The action was brought by the defendant in error, The Hamilton Dime Savings Bank Company, of Hamilton, Ohio, against the Franklin Bank, of Cincinnati, Ohio, upon a check drawn by C. G. Blake & Co. upon the Franklin Bank for two hundred and seventy-five dollars, payable to the order of C. G. Blake, and certified by the Franklin Bank to be good, and endorsed by C. G. Blake and Charles Werbel.
On Friday, October 16, 1903, Blake bought a horse from Werbel and endorsed the check to the order of Werbel and delivered it to him in payment for the horse-. The endorsement of certification was as follows: “Good for $275.00 when properly endorsed. The Franklin Bank, H. Sachteleben, Teller.” Werbel endorsed the check, and on the following'Monday, October the 20th, deposited it to his account with The Hamilton. Dime Savings Bank Company, and was given credit therefor on the books of the bank. The Hamilton Dime Savings Bank Company sent the check to the Atlas National Bank, of Cincinnati, for collection and it was protested for non-payment for the reason “Payment stopped.” Thereupon, on November 19, 1903, the defendant in error sued the Franklin Bank on the check, and the Franklin Bank, under Section 5016, Revised Statutes, filed a motion for an order of interpleader, which was granted, the amount of the check with interest was paid into court and C. G. Blake was substituted as defendant. Blake filed an answer averring that he had been induced to purchase the horse and to deliver the check in payment therefor by the false and fraudulent representations of Werbel, that Werbel is the owner of the check, that the plaintiff, The Hamilton Dime Savings Bank Company, received the check only as collecting agent for Werbel and with knowledge that Werbel had been notified that payment on the check would be stopped. A jury was waived and the court stated its findings of fact separately from its conclusions of law. Judgment was given for the bank for the amount paid into court, less costs to the date of that payment. The court found that The PTamilton Dime Savings Bank Company was the purchaser of the check for value and before notice and without knowledge of Blake’s claim. On error the circuit court affirmed the judgment, not, however, on the ground that the bank was entitled to the protection afforded to bona fide purchasers, the court stating in its opinion, as a matter of law, that the savings bank was not a purchaser for value, but that the transaction was the ordinary and usual one of a deposit by a depositor and not a purchase of the check for value by the bank.
At- the time the bank received notice of the claim of Blake it had on deposit to the credit of Werbel a. sum in excess of the amount of the check
No question is made as to the authority of the teller of the bank to bind the bank by the certi-i fication of the check.
The circuit court affirmed the judgment on the ground that “Werbel became the absolute owner of the check free from the claim of Blake to the same extent as if it had been money. 2 Daniel on Negotiable Instruments, Section 1601; Morse on Banks and Banking, Section 414.”
The circuit court was right in its opinion that the Hamilton Bank was not a purchaser of the check.
In the absence of special agreement the deposit in bank to his credit of an uncertified check by the holder, whether drawn on that bank or another, is deemed to be for collection and not for payment, and if there be no funds to meet it or if it be returned dishonored the deposit bank may return it to the depositor and cancel the credit. Daniel on Negotiable Instruments, Section 1623; Morse on Banks and Banking, 320 and 321; National Gold Bank & Trust Co. v. McDonald, 51 Cal., 64. And in such case if the bank receives notice of the invaliditv of the check it cannot become a bona fide holder by subsequent payment. “The mere discounting of paper and placing the amount thereof to the credit of a