refusal of the bank to pay any check can be shown by the holder, such refusal, if operating to the holder's injury, might perhaps constitute a good foundation for an action against the bank. The drawer, if wronged, has his own cause of action against the bank for the breach of an implied contract to honor promptly the customer's checks; which of itself is good reason why the bank should not ordinarily be compelled to respond to the holder. And it is settled in this country that, as a rule, the holder of a bank check cannot sue the bank for refusing payment, in the absence of proof that the check was accepted by the bank or charged against the drawer; nor does such unaccepted or uncertified check create any enforceable lien on the drawer's bank deposit.*

3

Days of grace, we have said, are not allowed on checks; yet as authorities differ somewhat in marking the limits between bills and checks, so do they likewise differ in their statements on this point, and as to the general doctrine of post-dated checks.5

1 See 2 Pars. 59-61, and cases cited; Bellamy v. Marjoribanks, 7 Ex. 389; Mandeville v. Welch, 5 Wheat. 277; Chapman v. White, 2 Seld. 412; St. John v. Homans, 8 Mo. 382; Ætna National Bank v. Fourth National Bank, 46 N. Y. 82. But see Roberts v. Corbin, 26 Iowa, 315.

22 Pars. 62-64, and cases cited; Marzetti v. Williams, 1 B. & Ad. 415; 133 U. S. 566.

3 See Bank of Republic v. Millard, 10 Wall. 152; Attorney-General v. Continental Life Ins. Co., 71 N. Y. 325; 5 Col. 185; St. Louis R. v. Johnston, 133 U.S. 566. A check, according to the now accepted view, is only a request of the customer of a bank to pay the whole or part of the customer's deposit to a particular person, or to order, or to bearer. Until pre

sented and accepted it is inchoate; it vests no title or interest, legal or equitable to the fund. Before acceptance, the drawer may withdraw his deposit. The bank owes no duty

to the holder of a check until it is presented for payment. Knowledge that checks have been drawn does not render it obligatory upon the bank to retain the deposit to meet them. Church, C. J., in Attorney-General v. Continental Life Ins. Co., 71 N. Y. 325.

An order, check, or draft, must be drawn upon a particular specified fund, in order to operate even as an equitable assignment of that fund. Ib. And see Hopkinson v. Forster, L. R. 19 Eq. 74. Still less is there an equitable assignment of the fund, by the mere act of giving a check, where the deposit is much less than the amount of the check. Florence Co. v. Brown, 124 U. S. 385. Cf. as to right of the holder of a check to sue the bank, 23 La. Ann. 49; 80 Ill. 212. Florence Co. v. Brown, 124 U. S.

385.

52 Pars. Notes and Bills, 67-69, and cases cited. Days of grace are not allowed on a check payable at a

Since checks are payable on presentment, the rule requiring acceptance, as in the case of bills, must be necessarily inapplicable as a rule. Undoubtedly a check ought to be presented within a reasonable time for payment; for it is inconvenient, if not injurious, to the drawer to have to keep funds waiting for uncertain or lengthy delays on the holder's part, and with incidental risk of the bank's continuous solvency. But as to the exact period within which a check must necessarily be presented at the bank for payment, there is no definite rule which either mercantile usage or the modern authorities sustain; while there is abundant reason to believe that a drawer at least would not be wholly or in part discharged in the courts at this day from payment of his check, because of any delay of presentment on the holder's part, unless he could show that he had suffered some material injury by the delay, sufficient to offset correspondingly the value of the check.1 A failure of the drawee, meanwhile, would seem sufficient, under circumstances of unreasonable delay on the holder's part, to discharge the drawer.2 But a check, generally

future day named. Champion v. Gordon, 70 Penn. St. 474. A post-dated check is not invalid. 24 Hun. 281.

1 Alexander v. Burchfield, 7 Man. & G. 1061; Little v. Phoenix Bank, 2 Hill, 425; 2 Pars. 73, 74. See Willetts v. Paine, 43 Ill. 432; Hopkins v. Ware, L. R. 4 Ex. 268; Smith v. Miller, 43 N. Y. 171; Pack v. Thomas, 13 Sm. & M. 11.

2 In a recent English case the failure to present a check for nearly four weeks-there being "a reasonable chance, though not a certainty," that it would have been paid if presented at once was held to discharge a debtor whose agent had meantime absconded. Hopkins v. Ware, L. R. 4 Ex. 268. The general rule is here maintained, that a creditor who takes from his debtor's agent, on account of the debt, the check of the agent, is bound to present it for payment within a reasonable time; and that, if he fails to do so, and by his delay

alters for the worse the debtor's position, the debtor is discharged, although he was not a party to the check. Ib. And see the strict rule laid down by a majority of the court, on a state of facts somewhat similar, in the recent case of Smith v. Miller, 43 N. Y. 171. But immediate presentation is not requisite as a rule. 42 N. Y. 538; Simpson v. Pacific Ins. Co., 44 Cal. 139.

But the drawer of a check, it is held, is not released by a mere want of notice, although he has the funds on deposit. Daniels v. Kyle, 1 Ga. 304; Little v. Phoenix Bank, 7 Hill, 359. See Laws v. Rand, 3 C. B. N. s. 442. And if a check is presented a long time after date, and payment thereof is refused, not on account of a failure, but because the drawer has closed his account or withdrawn his funds, the latter is still liable. Robinson v. Hawksford, 9 Q. B. 52; 2 Pars. 72. See Skillman v. Titus, 3 Vroom, 96.

speaking, is not due until its presentation, and both bank and drawer may derive an actual advantage, in some instances, by way of interest upon the deposit, where the check is presented tardily.

§ 167. Effect of certifying a Check. While, in strictness, a check is not capable of "acceptance," as the term is applied to ordinary bills of exchange, there is a sort of marking or certifying of checks quite common in the large cities, as modern business is conducted. Here a check is presented to the bank, to be certified as "good" by the cashier or other suitable officer of the bank: and, upon the certificate being given, the check circulates longer as cash or its substitute, with that additional credit which the name of the bank gives it. Such checks are to be found both in England and America; the name applied to them with which we are most familiar is that of "certified checks;" and the usual mode of certifying is by the bank officer writing upon the face of the check the word "good" over his signature.

What is the effect of a certificate like this? And to what extent shall the bank be considered as bound by such acts of its officers? There are earlier conflicting decisions on this point in some of the State courts.1 During our civil conflict,

1 This subject was considered by the Supreme Court of Massachusetts in 1845. Here a check had been drawn on a bank which had no funds of the drawer on deposit; and the teller of the bank, nevertheless, certified the check to be good. The court manifestly regarded a power of certifying, like this, to be in fact a power to pledge the credit of the bank to its customers; and their decision, to the effect that the bank should in the present instance go free, was based upon the assumption that only the president and directors of the bank could exercise an authority so extensive, unless specially delegating it to others; and that a teller, as such, had no implied authority to certify a check so as to bind the bank for payment. Evidence of a limited,

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but not a general usage, for the bankteller to certify in this manner, was deemed insufficient to render the bank liable. Mussey v. Eagle Bank, 9 Met. 306. But some twelve years later, a similar question came before the Court of Appeals in New York; and here it was decided that a bona fide holder, for value, of a negotiable check certified to be good by the paying teller of the bank on which it is drawn, whose authority to certify is limited to cases where the bank has funds of the drawer to meet the check, can recover of the bank the amount of the check, though the drawer had no funds in the bank, and though the certification by the teller was in violation of his duty, and for the drawer's accommodation. Farmers' Bank v. Butchers' Bank, 16 N. Y. 609

substitutes for money circulated, and a national banking, system superseded the old local banks of State creation; so that finally the Supreme Court of the United States was called upon to settle for the country the legal status of such instruments. This was done in Merchants' Bank v. State Bank; and the decision was, in substance, that cashiers of banks have power, when acting bona fide and in the ordinary course of business, to certify as "good" checks drawn upon their respective banks, and to bind the banks thereby, though no such general usage appear, this rule being applied to national banks. And concerning the cashier's general powers, it was held that evidence of powers habitually exercised by him, with the knowledge and acquiescence of the bank, defines and establishes those powers as to the public; provided those powers were such as the directors might, without violation of the bank charter, confer on the cashier.2 This important decision will probably be accepted by the State tribunals hereafter, as conclusive of the law of "certified checks" in the United States, so far as concerns the liability of national banks and their officers upon such instruments. A certification of a check in short, by the proper bank agency, pledges the bank's credit for payment of the check, in favor of an innocent holder for value, though in point of fact the drawer had at the time no fund on deposit.

But certified checks, though they may pass from hand to

125, Comstock, J., dissenting. And see Irving Bank v. Wetherald, 36 N. Y. 335; Pope v. Bank of Albion, 59 Barb. 226; 2 Pars. 74-77. In the opinion here pronounced, the Massachusetts doctrine was unfavorably criticised; yet the evidence now adduced appeared much stronger than before; for it was shown not only that the teller was in the habit of certifying the checks of customers, with the knowledge of the officers of the bank, but that he was furnished with a book for the express purpose of keeping a memorandum of certified checks.

1 Merchants' Bank v. State Bank, 10 Wall. 604, a famous case which grew out of transactions in Boston, and which was decided in 1871. The doctrine of New York was in this case adopted, in preference to that of Massachusetts. But the power to pledge a bank's credit was affirmed of a higher agent than a teller; though resting upon an implied or express agency from the bank's direction to one subordinate officer or another.

210 Wall. 604. The opinion was delivered by Swayne, J.; Clifford and Davis, JJ., dissenting.

hand as cash, are still neither cash nor currency, strictly speaking; and some payment, reasonably sooner or later, should be made thereon. And it is held that the bank upon which a certified check is drawn cannot set off a claim on the holder against the amount of deposit transferred by the check; for their only privity consists in the bank's guaranty that the check will be duly honored for payment.

§ 468. Payment of Checks; Duties of Banker, etc. Although a check ought to be always drawn upon funds, banks are sometimes in the habit of sustaining the credit of such of their customers as are in good standing, by honoring their checks even when, through inadvertence or something worse, the corresponding funds are wanting. But any such habit is so bad that it ought never to grow into a recognized legal or binding usage.2 While the check first presented for payment ought to be first paid, and the first payment applied to wiping out a depositor's balance, and so on; yet if all the checks presented at once go beyond the funds in hand, or there are funds for a partial but not a complete payment of any single check which may have been presented, the bank apparently is not obliged to make any pro rata or partial payment; nor is a holder bound to receive it.3 A banker of both holder and drawer will be presumed, if he take a check of the latter from the former, to receive it as the former's agent; and the mere retention of a check after deposit for a reasonable time, sufficiently long to enable the bank to ascertain whether the check is good or not, say until the next day, - constitutes

1 Brown v. Leckie, 43 Ill. 497. On the point whether the effect of certifying a check is (unlike that of accepting a bill) to discharge the drawer, the latest State cases are discordant. First Nat. Bank v. Leach, 52 N. Y. 350; contra, Bickford v. First Nat. Bank, 42 Ill. 238. But the true rule appears to depend upon whether the bank's certification was or was not at the instance and for the benefit of the holder, without the drawer's intervention. See Minot v. Russ, 156 Mass. 458; Born v. First Nat. Bank,

123 Ind. 78; 94 U. S. 343. After certifying a check the bank is bound to pay it, regardless of later instructions from the drawer to the contrary. Freund v. Importers' Bank, 76 N. Y. 352.

2 See 2 Pars. 77; Lancaster Bank v. Woodward, 18 Penn. St. 357; Houghton v. First National Bank, 26 Wis. 663.

3 In re Brown, 2 Story, 502; 2 Pars. 78. And see Carew v. Duckworth, L. R. 4 Ex. 313.