Melntire v. Raskin.*

• Court: Georgia Supreme Court
• Writing for the Court: HINES
• Citation: Melntire v. Raskin.*, 161 S.E. 363, 173 Ga. 746 (Ga. 1931)
• Decision Date: 12 November 1931
• Docket Number: No. 8206.,8206.
• Parties: MelNTIRE et al. v. RASKIN.*

173 Ga. 746

161 S.E. 363

MelNTIRE et al.

v.RASKIN.^*

No. 8206.

Supreme Court of Georgia.

Nov. 12, 1931.

Syllabus by the Court.

1. It is well settled in this state by the decisions of this court, and now by statute, that an unaccepted check drawn in the usual form not upon any particular fund, or not using words indicating a transfer of the whole or any part of the amount standing to the credit of the drawer, does not of itself amount to an assignment of the money to the credit of the drawer.

(a) As an ordinary check in this state does not amount to an assignment of the funds of the drawer in the bank sufficient to pay it, it does not take precedence over a subsequent garnishment of the deposit on which it is drawn.

(b) While the principle of law announced by the Court of Appeals and dealt with in the first division of this decision is correct, it is not applicable under the facts of this case, first, for the reason that the check was not drawn on funds belonging to the drawers (attorneys) to pay or discharge a debt which they owed the payee (their client), but was issued for the purpose of transmitting to the payee funds which belonged to him, and which had been collected by the attorneys and held by them for the payee; and, second, because the check had been accepted by the drawee, which made the drawee primarily liable to the payee for the amount of the check.

2. Where the drawers of a check, before its delivery, procured its certification by the bank upon which it was drawn, and deposited it in the post office, inclosed in an envelope duly addressed to the payee and properly stamped, such deposit in the post office was delivery to the payee, and operated as an assignment to the payee of so much of the funds of the drawers in the bank as were necessary to meet the check.

(a) When a check is certified by the bank on which it is drawn, its certification is equivalent to an acceptance. When the bank certifies the check, it is its duty immediately to charge the amount thereof to the drawers; and, in the absence of anything to the contrary, it will be presumed that this was done, and that funds of the drawers sufficient to pay the check were withdrawn from their account and credited to the check or to the holder thereof.

(b) Upon the certification of the check by the bank, such certification amounting to an acceptance thereof, the check operated as an assignment of so much of the funds of the drawers in the bank as were necessary to pay the same.

(c) The fact that the check was certified at the instance of the drawers and before delivery would not operate to defeat the assignment of so much of the funds of the drawers in the bank as would be necessary to pay the check, when the check was afterwards delivered.

3. Every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. Delivery of a check means the transfer of its possession from the drawerto the payee; and such transfer may he actual or constructive.

(a) Delivery of a check may be made by mail. By depositing a check in the mail, with the intent that it shall be transmitted to the payee in the usual way, the maker parts with his dominion and control over it, and delivery is in legal contemplation complete. This is especially true of a certified check.

(b) When the check was delivered to the payee by posting a letter containing it in the post office, the drawers thereof would have no right to withdraw it, unless it was necessary to protect some right of their own. In such situation the drawers were under no legal duty to countermand the payment of the certified check, if it had been certified at their instance in good faith and had been delivered.

(c) A certified check has a distinctive character as a species of commercial paper, and constitutes a new contract between the holder and the certifying bank. The funds of the drawer are, in legal contemplation, withdrawn from his credit and appropriated to the payment of the check, and the bank becomes the debtor of the holder as for money had and received.

(d) The drawer of a check which has been certified at his request may, before delivery, recall and countermand it and require the certifying bank to refuse payment to the payee therein named, if the payee obtain the check by a fraud perpetrated upon the maker, or there be some other good reason to do so to protect the rights of the drawer.

(e) When the garnishees in this case were served with a summons of garnishment after delivery of their certified check by posting it in the post office in an envelope duly stamped and addressed to the payee, it was not their duty to withdraw it from the mail, though this might be done in a proper case under the postal laws and regulations of the United States. After such delivery of the certified check, the drawers had no further control over it, and would not be authorized to withdraw it from the mail under such postal regulations.

4. The transaction in this case did not amount to an assignment of funds of the drawers to the payee of this check. The funds were not those of the drawers, but those of the payee; and the drawers were transmitting these funds to the owner. There is nothing in the facts of this case to show that this was not done in good faith. In the circumstances the transaction amounted to a satisfaction or payment of the obligation of the attorneys to their client for the money collected; and the attorneys were not thereafter liable to the process of garnishment at the instance of the garnishing creditor.

Certiorari from Court of Appeals. Suit by B. L. Raskin against one LichtenBtein, in which garnishment was served on P P. Mclntire and others. Judgment for plaintiff against the garnishees was affirmed by the Court of Appeals (42 Ga. App. 303, 155 S. E. 799), and the garnishees bring certiorari. Reversed and remanded.

Mclntire, Walsh & Bernstein, of Savannah, for plaintiffs in error.

Jacob Gazan, of Savannah, for defendant in error.

HINES, J.

This case Is in this court upon the grant of certiorari to review a judgment of the Court of Appeals. The facts upon which this judgment rests are clearly and fully set out in the report of the decision of the Court of Appeals. 42 Ga. App. 303, 155 S. E. 799, 801. It is alleged that the Court of Appeals erred in affirming the judgment of the trial judge overruling the demurrer of the garnishees to the traverse of their answer, and erred in the rulings stated in the second and third divisions of its opinion.

1. We deal first with the assignment of error upon the ruling set out in the second division of the opinion of the Court of Appeals. That ruling is that, "where a summons of garnishment has been served upon the voluntary sender of an ordinary check before It has left the post office where mailed, and when the sender, under the postal regulations, has the right to withdraw and could have withdrawn it from the mails, the debt represented by the check is subject to the garnishment process." This ruling is a reiteration of the ruling by the Court of Appeals in Watt-Harley-Holmes Hardware Co. v. Day, 1 Ga. App. 646, 57 S. E. 1033.

It is well settled in this state that an unaccepted check drawn in the usual form, not upon any particular fund, or not using words indicating a transfer of the whole or any part of the amount standing to the credit of the drawer, does not amount to an assignment of the money to the credit of the drawer. Baer v. English, 84 Ga. 403, 11 S. E. 453, 20 Am. St. Rep. 372; Haas v. Old National Bank, 91 Ga. 307, 18 S. E. 188; Georgia Seed Co. v. Talmadge, 96 Ga. 254 (2), 22 S. E. 1001; Talladega Mercantile Co. v. Robinson, 96 Ga. 815, 22 S. E. 1003; Reviere v. Chambliss, 120 Ga. 714, 48 S. E. 122; Bank of Hamilton v. Williams, 146 Ga. 96, 90 S. E. 718. This principle has been embodied in our Negotiable Instrument Law. By section 189 of that law it is provided that "a cheek of itself does not operate as an assignment of any part of the funds to the credit of the drawer with the bank, and the bank is not liable to the holder unless and until it accepts or certifies the check." Ga. Laws 1924, p. 163, 12 Park's Code, § 4284(6). As an ordinary check in this state does not amount to an assignment of the funds of the drawer in the bank sufficientto pay It, It does not take precedence over a subsequent garnishment of the deposit upon which it is drawn. Trustees v. Pace, 15 Ga. 486; Mayer v. Chattahoochee National Bank, 51 Ga. 325; Bluthenthal v. Silverman, 113 Ga. 103, 38 S. E. 344; Jackson v. Gallagher, 128 Ga. 321, 327, 57 S. E. 750; 28 C. J. 108 (§ 148)(e). The principle of law announced in Watt-Harley-Holmes Hardware Co. v. Day, supra, is not applicable under the facts of this case, for two reasons. In the first place, this check was not drawn on funds belonging to the drawers to pay or discharge a debt which they owed the payee, but was issued for the purpose of transmitting to the payee funds which belonged to him; the same being funds collected by the attorneys and held by them for their client, the payee. In the second place, the check had-been accepted by the drawee; and this made the drawee primarily liable to the payee for the amount thereof.

2. But in this case we are not dealing with an ordinary check drawn by a depositor generally upon his funds on deposit in the bank on which the check is drawn. We are dealing with a check so drawn and certified by the bank at the Instance of the drawer. In the third division of its decision in 'this case the Court of Appeals held that, where the drawer, before delivery of the check, himself procures its certification by the bank upon which it is drawn, the mere fact of such certification at the instance of the drawer does not, before delivery of the check, operate as an assignment of the funds of the payee, and that so long as the drawer continues to own the check by reason of its nondelivery he is entitled to control it, and may...