Downey v. Citizens' State Bank of Noblesville, Ind.

• Decision Date: 25 March 1935
• Docket Number: No. 14859.,14859.
• Parties: DOWNEY v. CITIZENS' STATE BANK OF NOBLESVILLE, IND.
• Court: Indiana Appellate Court

100 Ind.App. 158

194 N.E. 743

DOWNEY

v.CITIZENS' STATE BANK OF NOBLESVILLE, IND.

No. 14859.

Appellate Court of Indiana, in Banc.

March 25, 1935.

Appeal from Marion Circuit Court; Harry O. Chamberlin, Judge.

In the matter of the receivership of the Washington Bank & Trust Company, wherein the Citizens' State Bank of Noblesville, Indiana, brought a suit by way of an intervening petition against Brandt C. Downey, as and in the capacity of receiver of the Washington Bank & Trust Company. From a judgment for the intervening petitioner, receiver appeals.

Reversed with instructions.

Appellee, the payee of a check which the drawer had had certified by the Washington Bank & Trust Company, brought this suit by way of an intervening petition, in two paragraphs, filed in the receivership of the last-named bank asking that the amount of such check, viz., $1,250, be declared to be a preferred claim and as such entitled to priority. The appellant contested the allowance as preferred and a hearing was had with a finding and judgment for the intervening petitioner. A motion for a new trial alleging as grounds therefor that the decision was not sustained by sufficient evidence and that it was contrary to law was overruled, following which this appeal was perfected, assigning as error the overruling of such motion.

Earl R. Conder, of Indianapolis, for appellant.

Kane, Blain & Hollowell, of Indianapolis, for appellee.

KINE, Judge (after stating the facts).

The appellee here advances the theory that, under the Uniform Negotiable Instruments Act, since this was a check it operated as an assignment of the funds and that after such assignment the fund was then held in trust for the payee, contending further that clause 2 of section 13 of the Uniform Collection Code, Acts of 1929, c. 164, p. 520, applied, and cited for his authority the case of Central Trust Co. v. Bank of Mullens (1930) 109 W. Va. 119, 153 S. E. 145. There is some dicta in this case favoring appellee's position, but since it is dicta and is decidedly in the minority, we prefer not to follow it.

[1][2][3] The appellant contends that the certification of the check is nothing more than the substitution of the certifying bank as the debtor in place of the drawer of the check. Section 187 of the Uniform Negotiable Instruments Act, Acts 1913, c. 63, p. 120, provides that: “Where a check is certified by the bank on which it is drawn, the certification is equivalent to an acceptance.” Section 62 of the Act provides, “The acceptor by accepting the instrument engages that he will pay it according to the tenor of his acceptance; and admits: 1. The existence of the drawer, the genuineness of his signature, and his capacity and authority to draw the instrument; and 2. The existence of the payee and his then capacity to endorse.” It would seem then, and we so hold, that the certification or acceptance by the bank was nothing more than the certification by the bank that the signature of the drawer was genuine and that he had, at that time, the capacity and authority to draw the instrument. Thus we find nothing in the act itself which would tend to indicate, in any way, that the bank intended to be bound or that the Legislature intended for it to be bound in any other way than as a debtor. Nor does section 189 of the act lead us to any other conclusion. This section provides: “A check of itself does not operate as an assignment of any part of the funds to the credit of...