Cottle v. Marine Bank

Certificate of Deposit — Demand of Payment and Production of Certificate Necessary before Action upon it. A depositor who has received from a bank a certificate of deposit payable “ to his order hereon,” who, owing to the fact that the certificate is in the hands of a third party, cannot make a proper demand by producing and offering to surrender the certificate properly indorsed before the commencement of an action upon it against the maker, cannot recover.

Appeal from a judgment of the Appellate Division of the Supreme Court in the fourth judicial department, entered April 15, 1898, affirming a judgment in favor of defendant entered upon a dismissal of the complaint by the court at a Trial Term without a jury. The original plaintiff, John J. P. Read, since deceased, brought this action to recover the amount of two deposits of money made by him with the defendant, for which, upon the first deposit, the defendant gave to him a certificate in these words: “ State of Hew York, ) Marine Bank. f $1,255 “ Buffalo, Nov. 12, 1881. “ J. J. P. Read has deposited in this bank twelve hundred and fifty-five dollars to the order of himself and payable to his order hereon with interest at four per cent per annum. “W. K. ALLEH, Cashier. 6,037.” And, upon the second deposit, the following : “State of New York, ) Marine Bank. f $1,000 “ Buffalo, June 1st, 1883. , “ John J. P. Bead has deposited in this bank one thousand dollars to the credit of himself and payable to his order hereon,' with interest at three per cent per annum. “ W. K. ALLEN, Gashier. “No. 6,165.” The answer alleged that the certificates had never been presented i¡o the defendant for payment, and also that they "were held by George. W. Bockwell, as executor of Elizabeth Bock-well, and that he claimed to own them as such, and had for-bidden payment thereof to the plaintiff.. Bead, the depositor, resided with his sister, Mrs. Bockwell, at the time of each deposit, and until June 26,1886, when she changed her place of residence and took with her the certificates. Bead commenced an action against her for the recovery of the certificates, which action was pending at her death, January 7, 1887, and is still pending. Bead procured an order from the court requiring Mrs. Bockwell to produce the certificates before a referee. This she did, and Bead then inspected and took copies of them. Mrs. Bockwell retained possession of the certificates until her death, when they came into the possession of George W, Bock-well, who claimed to hold the same as the executor of her last will and testament. While said George W. Bockwell had the possession of the certificates, claiming thus to hold them, Bead, the depositor and original plaintiff, demanded of the defendant payment of the same, but he did not produce them to the defendant, nor have the possession of them, and the defendant refused payment. George W. Bockwell soon after presented the certificates to the defendant and forbade payment of the same to Bead. The certificates have not been lost and remain unpaid. The trial court found the above facts and held that Bead did not make the proper demand of the defendant, in that he did not and could not produce and offer to surrender to ii the certificates properly indorsed, and directed judgment for the defendant. On proof of the deposits, demand thereof, and non-payment, and a surrender of the certificates on the trial, the plaintiffs were entitled to recover. (Read v. Brayton, 143 N. Y. 342; Read v. Marine Bank, 17 N. Y. Supp. 326; Read v. Bank of Attica, 55 Hun, 154; 124 N. Y. 671; Read v. Marine Bank, 136 N. Y. 454; 3 Rand, on Com. Paper, § 1071; Hunt v. Divine, 37 Ill. 137; Beardsley v. Webber, 104 Mich. 88; Bank v. Bank, 34 Neb. 78; Baker v. Leland, 9 App. Div. 367.) The demand of June 4, 1887, was sufficient. The bringing of the action was also a sufficient demand. (Sickles v. Herold, 149 N. Y. 332; Locklin v. Moore, 57 N. Y. 360; 3 Rand. on Com. Paper, § 1071; Hunt v. Divine, 37 Ill. 138; Beardsley v. Webber, 104 Mich. 88; Baker v. Leland, 9 App. Div. 367; Haxtun v. Bishop, 3 Wend. 21; Hills v. Place, 48 N. Y. 520; Wolcott v. Van Santvoord, 17 Johns. 253; Bank v. Bank, 34 Neb. 78.) Having denied the plaintiff's title and defended on the strength of a third person’s title, the defendant waived the objection that the certificates were not presented, if presentation were necessary. (Carroll v. Cone, 40 Barb. 220.) In an action against the maker, or debtor, the only penalty for not making a demand is the loss of interest and costs, if the debtor was ready to pay, pleads that fact, and brings the money into court. (Budweiser Brewing Co. v. Capparelli, 16 Misc. Rep. 502; Beardsley v. Webber, 104 Mich. 88; Hills v. Place, 48 N. Y. 520; Wamsley v. Darragh, 14 Misc. Rep. 566; Code Civ. Pro. §§ 732, 743, 820.) Presentment is only necessary to charge indorsers, drawers and the like; as to the maker, it is not a condition precedent to a cause of action. (3 Rand. on Com. Paper, § 1071; Hills v. Place, 48 N. Y. 520.) It was not necessary to present the certificate for payment; surrender on the trial was sufficient. (Read v. Brayton, 143 N. Y. 342; Read v. Marine Bank, 136 N. Y. 454; Read v. Bank of Attica, 55 Hun, 154; Baker v. Leland, 9 App. Div. 367; Hunt v. Divine, 37 Ill. 138; Pelham v. Adams, 17 Barb. 385; Hotchkiss v. Mosher, 48 N. Y. 479; 1 Rand. on Com. Paper, § 11; Laughlin v. Marshall, 19 Ill. 390; Beardsley v. Webber, 104 Mich. 88.) The legal presumption is, where a certificate of deposit payable to order is found, without indorsement, in the hands of a stranger, that such paper has been lost, stolen or otherwise improperly put into circulation. (McCarville v. Lynch, 14 Misc. Rep. 174; Porter v. Cushman, 19 Ill. 575; Hughes v. U. Pipe Lines, 119 N. Y. 423; Davies v. Lane, 8 N. H. 224; Magee v. Scott, 9 Cush. 148; Dorn v. Parsons, 56 Mo. 601.) If the defendant was unwilling to pay the depositor on demand, it should have moved to interplead the alleged claimant and have paid the money into court. (Hills v. Place, 48 N. Y. 520; Code Civ. Pro. §§ 743, 820; Equity G. L. Co. v. McKeige, 139 N. Y. 239; Read v. Brayton, 143 N. Y. 343; Lund v. Seamen's Bank, 37 Barb. 129.) The certificates issued by the respondent to appellants’ testator, Mr. Bead, were not promissory notes, but certificates of deposit. (Read v. Marine Bank, 136 N. Y. 454; Pardee v. Fish, 60 N. Y. 265.) A deposit, or certificate of deposit is not due until a proper demand for its payment has been made. (Payne v. Gardiner, 29 N. Y. 146; Downes v. Phœnix Bank, 6 Hill, 297; Pardee v. Fish, 60 N. Y. 265; Howell v. Adams, 68 N. Y. 314; Boughton v. Flint, 74 N. Y. 476; Munger v. A. C. Nat. Bank, 85 N. Y. 581; Smiley v. Fry, 100 N. Y. 262; Sheldon v. Heaton, 88 Hun, 535; Dorman v. Gannon, 4 App. Div. 458; Baker v. Leland, 9 App. Div. 365.) A proper demand of payment of the deposits for which the certificates were issued tó the appellants’ testator, Mr. Bead, was never made upon the respondent. (Story on Prom. FTotes, §107; Edwards on Bills & FTotes, § 691; Daniel on Heg. Inst. § 654; Wilder v. Seelye, 8 Barb. 408; Bank of Vergennes v. Cameron, 7 Barb. 143; Morse on Banks & Banking, § 298; Etheridge v. Ladd, 44 Barb. 69; Crandall v. Schroeppel, 1 Hun, 557; Parker v. Shroud, 98 N. Y. 379; Freeman v. Boynton, 7 Mass. 483; Hansard v. Robinson, 7 B. & C. 90.) The production of the certificates of deposit by Mr. Read on this second trial' does not supply his failure to properly demand payment of the deposits before the commencement of this action. (Wisner v. Ocumpaugh, 71 N. Y. 113; Deen v. Met. El. Ry. Co., 119 N. Y. 540.) The respondent was under no obligation to interplead any person in this action. (Read v. Marine Bank, 136 N. Y. 454.)