Shute v. Pacific Nat'l Bank

• Court: Supreme Judicial Court of Massachusetts
• Writing for the Court: Colburn, J.
• Citation: Shute v. Pacific Nat'l Bank, 136 Mass. 487 (Mass. 1884)
• Decision Date: 28 February 1884
• Parties: James M. Shute, Jr. v. Pacific National Bank

136 Mass. 487

James M. Shute, Jr. v. Pacific National Bank

Supreme Court of Massachusetts

February 28, 1884

Argued November 30, 1883

Suffolk. Contract upon three certificates of deposit, one of which was as follows: "The Pacific National Bank of Boston, Mass. $ 1000. Boston, May 18, 1881. This certifies that Wm. H. Nichols has deposited in this bank one thousand dollars, payable to the order of himself on return of this certificate properly indorsed. J. M. Pettingill, cashier. No 1807. [Indorsed] Wm. H. Nichols." The other two certificates were similar in form, except that one was dated August 13, 1881.

At the trial in the Superior Court, before Pitman, J., the action was defended by the receiver of the defendant bank, appointed under the laws of the United States, who filed a declaration in set-off upon two promissory notes, which were given by said Nichols to, and discounted by, the bank at the time the certificates of deposit in suit were issued to him, and were not paid by him at their maturity. Nichols indorsed the certificates to the plaintiff, who received them for a valuable consideration and without notice of any infirmity soon after their issue; but the defendant had no notice of such transfer until March 18, 1882, when the plaintiff demanded payment thereof.

The defendant asked the judge to rule that the certificates declared on were promissory notes payable on demand, within the meaning of the Gen. Sts. c. 53, § 10; and that the amount due upon the two notes declared on in set-off should be set off against the plaintiff's claim. But the judge declined so to rule.

The jury returned a verdict for the plaintiff; and the defendant alleged exceptions.

Exceptions overruled.

A. A. Ranney, for the defendant.

G. W. Morse, for the plaintiff.

Colburn, J. C. Allen & Holmes, JJ., absent.

OPINION

Colburn, J.

The certificates of deposit upon which this action is brought, though having in most respects the incidents of promissory notes, and classed as such, differ from common promissory notes in important particulars. Such a certificate is not merely a promise to pay a certain sum, but it declares that a certain fund has been deposited, which is payable to the depositor, or his order, on the return of the certificate properly indorsed.

A promissory note, payable on demand, is due as soon as it is given: an action may be brought upon it immediately, without demand; and the statute of limitations begins to run against it from its date. Field v. Nickerson, 13 Mass. 131. Newman v. Kettelle, 13 Pick. 418. Burnham v. Allen 1 Gray 496c.

A certificate of deposit is not due until a demand is made and the certificate returned or tendered. Bellows Falls Bank v. Rutland County Bank, 40 Vt. 377. Munger v. Albany City Bank, 85 N.Y. 580. Such certificates are issued with the design that they shall be used as money, and taken with as much confidence as the bills of the bank, and to avoid the risk and inconvenience of...