Van Buskirk v. State Bank of Rocky Ford

• Decision Date: 04 December 1905
• Citation: 35 Colo. 142,83 P. 778
• Parties: VAN BUSKIRK v. STATE BANK OF ROCKY FORD.
• Court: Colorado Supreme Court

83 P. 778

35 Colo. 142

VAN BUSKIRK v. STATE BANK OF ROCKY FORD.

Supreme Court of Colorado

December 4, 1905

Appeal from Otero County Court; Marion F. Miller, Judge.

Action by the State Bank of Rocky Ford against H. Van Buskirk. From a judgment for plaintiff, defendant appeals. Reversed.

Fred A Sabin and R.I. Beall (Calvin E. Reed, of counsel), for appellant.

O. G Hess, for appellee.

CAMPBELL J.

The parties are doing a separate banking business in the same town. A check drawn on the appellant by one of its depositors was by the payee presented for payment to the appellee. Appellee telephoned to appellant, asking if the check was good, and was informed that it was 'good,' or 'all right.' This was the extent of the information given, and there was no promise by appellant that it would accept or pay the check, unless the information given is in law that promise. Appellee then paid the check upon the strength of the foregoing reply to its question, but otherwise would not have cashed it. A few minutes thereafter the drawer appeared before the drawee (appellant) and stopped payment, of which appellant immediately advised the appellee. Afterwards, and on the same day, when appellee presented the check, duly indorsed, to appellant for payment, the latter refused to pay it because it had been directed by its depositor not to do so, although at the time, the drawer had and still has, with appellant sufficient funds for such payment. Thereupon this action was brought by appellee against appellant to recover the amount of the check, upon the ground that appellant had promised to pay it. The trial court submitted the case to the jury, upon the theory that the cause of action stated in the complaint, setting up the foregoing facts, was based upon an implied parol promise to pay. The verdict and judgment were for the plaintiff, and the defendant appeals.

The two chief points relied upon by defendant below (appellant here) are (1) that under our negotiable instrument law passed in 1897 (Sess. Laws 1897, p. 210, c. 64) an action will not lie in favor of the holder of a check against the drawee, unless and until the same is accepted or certified by the drawee which acceptance or certification must be in writing; and (2) that, if a parol acceptance or promise to pay is binding, no such promise was established by the evidence.

1. The courts of England and America have often held that, at the common law, though many of the rules and principles applicable to bills of exchange apply to bank checks, the two kinds of instruments are not identical. Regardless of the common-law rights of the parties under the facts of this case, we think there can be no doubt as to the correctness of appellant's leading contention that, under our negotiable instrument law, the drawee of a check is not liable to the holder, unless and until he accepts or promises to pay the same, and such assent to his liability must be in writing. Section 126 of our act defines a bill of exchange as 'an unconditional order in writing addressed by one person to another, signed by the person giving it, requiring the person to whom it is addressed to pay on demand or at a fixed or determinable future time, a sum certain in money to order or to bearer.' Section 185 reads: 'A check is a bill of excnange drawn on a bank payable on demand. Except as herein otherwise provided, the provisions of this act applicable to a bill of exchange payable on demand apply to a check.' At the common law, a bill of exchange payable on demand need not be presented for acceptance. Indeed, strictly speaking, there is no such thing as acceptance of a check in the ordinary sense of the term; yet, by consent of the holder, the drawee bank may enter into an engagement quite similar to that of acceptance by certifying the check to be good, instead of paying it. 2 Daniel on Negotiable Instruments (4th Ed.) § 1601; section 143 of our act. A check is a species of bill of exchange, viz., that particular kind of a bill which is drawn on a bank and payable on demand. Under our act, it need not be presented for acceptance, unless it contains an express stipulation to that effect. Section 143.

Before the passage of our negotiable instrument law, this court had ruled, in accordance with the weight of authority, that a right of action does not exist in favor of the holder of a check against the drawee...