BANK OF BAY BISCAYNE v. BALL, Fla., Judgment, Law, casemine.com

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Attorney(S)

R. F. Burdine, for Plaintiff in Error; Robert J. Boone, for Defendant in Error.

Judges

William H Ellis

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Smart Summary

Factual and Procedural Background

Charles Ball obtained a judgment against the Bank of Bay Biscayne in the Circuit Court for Dade County for the sum of seven thousand and forty dollars. The Bank of Bay Biscayne sought review by writ of error. The underlying dispute arose from a check drawn by S. M. Weisberger on the Bank, payable to Seminole Company, which was endorsed and eventually came into the possession of Charles Ball. Ball presented the check to the Bank for certification, which the Bank provided. Subsequently, when Ball presented the certified check for payment, the Bank refused to pay, prompting Ball to bring suit.

Legal Issues Presented

Whether a bank that certifies a check presented by a holder in due course is bound by such certification to pay the amount certified to the holder upon presentation for payment.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

Precedent	Rule or Principle Cited For	Application by the Court
Merchants National Bank v. State National Bank, 10 Wall. 604, 19 L.Ed. 1008	Certification of a check by a bank is equivalent to acceptance, creating an absolute obligation to pay the holder.	The court relied on this precedent to affirm that the bank becomes the absolute debtor upon certifying the check, releasing the drawer.
First National Bank v. Whitman, 4 Otto 343, 24 L.Ed. 229	Supports the principle that certification is equivalent to acceptance.	Used to corroborate the general rule regarding bank certification obligations.
Metropolitan Nat. Bank of Chicago v. Jones, 137 Ill. 634, 27 N.E. 533	Affirms that certification creates a binding obligation on the bank.	Referenced to support the binding nature of certification.
Minot v. Russ, 156 Mass. 458, 31 N.E. 489	Confirms that certification implies bank's undertaking to honor the check.	Reinforces the principle that certification substitutes the bank's obligation for that of the drawer.
Detroit First Nat. Bank v. Currie, 147 Mich. 72, 110 N.W. 499	Supports the legal effect of certification as acceptance.	Applied to affirm the bank's absolute liability upon certification.
Jackson Paper Mfg. Co. v. Commercial Nat. Bank, 199 Ill. 151, 65 N.E. 136	Endorses the principle that certified checks function as money and impose bank liability.	Used to illustrate the commercial importance and legal effect of certified checks.
Bickford v. Nat. Bk., 42 Ill. 238	Supports the equivalency of certification to acceptance under banking law.	Cited as authority reinforcing the legal effect of bank certification.
Willets v. Phoenix Bk., Duer, 121	Reinforces the binding nature of a bank's certification of a check.	Referenced to support the bank's liability.
Barnet v. Smith, 10 Fost. (N.H.), 256	Supports the principle that certification creates an obligation on the bank.	Used to affirm the bank's responsibility upon certification.
Meads v. Mech. Bk., 25 N.Y. 146	Confirms certification as an undertaking by the bank to honor the check.	Applied to support the court’s conclusion on bank liability.
Far. and Mech. Bk. v. Butchers' and Drov. Bk., 4 Duer, 219; 14 N.Y. 624	Affirms that certification is a binding promise by the bank.	Used to corroborate the binding effect of certification.
Brown v. Leckie, 43 Ill. 497	Supports the legal effect of certification as acceptance.	Referenced to reinforce bank's obligation upon certification.
Gir. Bk. v. Bk. of Penn., 39 Pa. St. 92	Confirms the binding nature of bank certification of checks.	Used to affirm the legal principle applied by the court.

Court's Reasoning and Analysis

The court analyzed the nature of the bank's certification of the check. It recognized that the certification was a factual statement that the drawer had sufficient funds or credit at the bank at the time of certification. Although the certification was not a promise to pay supported by consideration, the court explained that the certification operates as an acceptance equivalent to that of a time draft, making the bank the absolute debtor to the holder in due course. The court relied heavily on established precedents and the well-settled commercial practice that certified checks serve as substitutes for money, thereby imposing on the bank an obligation to honor the check upon presentation. The court emphasized the commercial necessity and public policy supporting the binding effect of certification, concluding that the bank could not repudiate its liability once it had certified the check.

Holding and Implications

The judgment of the Circuit Court for Dade County is affirmed.

This decision confirms that a bank's certification of a check creates an absolute obligation to pay the holder in due course, effectively releasing the drawer from liability. The ruling reinforces the commercial reliability of certified checks as equivalent to accepted drafts, ensuring their continued function as secure substitutes for money. No new precedent was established beyond affirming the existing legal principles cited.

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BANK OF BAY BISCAYNE, Plaintiff in Error, v. CHARLES BALL, Defendant in Error.

ELLIS, J. —

A judgment was obtained by Charles Ball, the defendant in error, against the Bank of Bay Biscayne in the Circuit Court for Dade County in the sum of seven thousand and forty dollars. To which judgment the Bank took a writ of error.

The only question presented is whether a Bank which "certifies" a check which is presented by the holder of it in due course is bound by such certification to pay the amount for which the check was certified to the holder in due course who presented the check for certification.

A check was drawn on the Bank of Bay Biscayne by S. M. Weisberger on August 12, 1925, for the sum of seven thousand and forty dollars payable to the order of Seminole Company. The check was endorsed by the payee to Seminole Properties and by the latter endorsed in blank and on the 15th of August, 1925, came in due course into the possession of Charles Ball who presented it to the Bank which at Ball's request "certified" it. Later the check was presented at the Bank by Ball for payment and payment refused. Ball thereupon brought his action against the Bank.

The certification by the bank as it appears on the check is in the following words and figures: "CERTIFIED NO. 17301 Good for $7040. only when properly endorsed Aug. 15, 1925 BANK OF BAY BISCAYNE Miami, Florida, E. W. GILMANN, Teller."

There is no question as to the authority of the Bank officer to certify the check nor as to the form of the certificate nor the signification of it. It was a definite statement by the Bank that the drawer of the check had on deposit at the Bank at the time the check was presented for certification, or that his account as the same appeared upon the books of the Bank, showed a credit balance sufficiently large or that his credit at the Bank was sufficiently strong to insure the payment of the check by the Bank when presented properly endorsed for payment. It was not in form a promise to pay supported by a valuable consideration. It was a mere statement of a fact.

No greater obligation rested upon the Bank to pay the check after it was certified than before it was certified unless the certification constituted a valid obligation to pay or promise that the funds of the drawer would not be withdrawn or that it raised an estoppel of the Bank to deny its liability on the check as a drawee on a time draft after acceptance.

The check was certified by the Bank after delivery on presentation by the holder. In such case the rule most generally upheld by the courts and which this court will follow is that the Bank becomes the absolute debtor of the holder and the drawer is released. The principle is that a certificate of a bank that a check is good is equivalent to acceptance. See Sec. 6926 C. G. L. 1927; Merchants National Bank v. State National Bank, 10 Wall. 604, 19 L.Ed. 1008; First National Bank v. Whitman, 4 Otto 343, 24 L.Ed. 229; Metropolitan Nat. Bank of Chicago v. Jones, 137 Ill. 634, 27 N.E. R. 533, 31 Am. St. R. 403, 12 L. R. A. 492; Minot v. Russ, 156 Mass. 458, 31 N.E. R. 489, 32 Am. St. R. 472, 16 L. R. A. 510; Detroit First Nat. Bank v. Currie, 147 Mich. 72, 110 N.W. R. 499, 118 A. S. R. 537, 9 L. R. A. (N. S.) 698; Jackson Paper Mfg. Co. v. Commercial Nat. Bank, 199 Ill. 151, 65 N.E. R. 136, 93 Am. St. R. 113, 59 L. R. A. 657.

The reason given for the rule is forcefully expressed by Mr. Justice Swayne in Merchants National Bank v. State National Bank, supra.

"All the authorities, both English and American, hold that a check may be accepted, though acceptance is not usual. Robson v. Bennett, 2 Taunton, 395; Grant, Bkg., 89 Chit. Bills, 10 Ed., 261; Boyd v. Emmerson, 2 Ad E., 184; Kilsby v. Williams, 5 B. Ald., 816; Story, Prom. N., secs, 489, 490. "By the law merchant of this country, the certificate of the bank that a check is good is equivalent to acceptance. It implies that the check is drawn upon sufficient funds in the hands of the drawee, that they have been set apart for its satisfaction, and that they shall be so applied whenever the check is presented for payment. It is an undertaking that the check is good then and shall continue good, and this agreement is as binding on the Bank as its notes of circulation, a certificate of deposit payable to the order of the depositor, or any other obligation it can assume. The object of certifying a check as regards both parties, is to enable the holder to use it as money. The transferee takes it with the same readiness and sense of security that he would take the notes of the Bank. It is available also to him for all the purposes of money. Thus it continues to perform its important functions until in the course of business it goes back to the Bank for redemption and is extinguished by payment.

"It cannot be doubted that the certifying Bank intended these consequences, and it is liable according. To hold otherwise would render these important securities only a snare and delusion."

"A bank incurs no greater risk in certifying a check than in giving a certificate of deposit. In well regulated banks the practice is at once to charge the check to the account of the drawer, to credit it in "certified check account," and when the check is paid, to debit that account with the amount. Nothing can be simpler or safer than this process. "The practice of certifying checks has grown out of the business needs of the country. They enable the holder to keep or convey the amount specified with safety. They enable persons not well acquainted to deal promptly with each other and they avoid the delay and risks of receiving, counting and passing from hand to hand large sums of money. "It is computed by a competent authority that the average daily amount of such checks in use in the City of New York, throughout the year, is not less than $100,000,000.

"We could hardly inflict a severer blow upon the commerce and business of the country than by throwing a doubt upon their validity.

"Our conclusions as to their legal effect are supported by authorities of great weight. Bickford v. Nat. Bk., 42 Ill. 238; Willets v. Phoenix Bk., Duer, 121; Barnet v. Smith, 10 Fost. (N.H.), 256; Meads v. Mech. Bk., 25 N.Y. 146; Far. and Mech. Bk. v. Butchers' and Drov. Bk., 4 Duer, 219; Far. and Mech. Bk. v. Butchers' and Drov. Bk., 14 N.Y. 624; Brown v. Leckie, 43 Ill. 497; Gir. Bk. v. Bk. of Penn., 39 Pa. St. 92."

The judgment is affirmed.

TERRELL, C. J., AND WHITFIELD, STRUM AND BUFORD, J. J., concur.

BROWN, J., disqualified.

BANK OF BAY BISCAYNE v. BALL