{ "id": 5207924, "name": "South Chicago Savings Bank, Plaintiff-Appellee, v. Drexel National Bank, Defendant-Appellant", "name_abbreviation": "South Chicago Savings Bank v. Drexel National Bank", "decision_date": "1960-02-02", "docket_number": "Gen. No. 47,851", "first_page": "179", "last_page": "183", "citations": [ { "type": "official", "cite": "24 Ill. App. 2d 179" } ], "court": { "name_abbreviation": "Ill. App. Ct.", "id": 8837, "name": "Illinois Appellate Court" }, "jurisdiction": { "id": 29, "name_long": "Illinois", "name": "Ill." }, "cites_to": [ { "cite": "80 Ill. 212", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 2680128 ], "opinion_index": 0, "case_paths": [ "/ill/80/0212-01" ] }, { "cite": "233 Ill. App. 99", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3093130 ], "opinion_index": 0, "case_paths": [ "/ill-app/233/0099-01" ] }, { "cite": "263 Ill. App. 611", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3256276 ], "year": 1931, "opinion_index": 0, "case_paths": [ "/ill-app/263/0611-01" ] }, { "cite": "224 Ill. App. 26", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 3052667 ], "year": 1922, "pin_cites": [ { "page": "31" } ], "opinion_index": 0, "case_paths": [ "/ill-app/224/0026-01" ] }, { "cite": "203 Ill. App. 561", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 5412235 ], "year": 1916, "pin_cites": [ { "page": "565-66" } ], "opinion_index": 0, "case_paths": [ "/ill-app/203/0561-01" ] }, { "cite": "143 Ill. App. 625", "category": "reporters:state", "reporter": "Ill. App.", "case_ids": [ 2677353 ], "year": 1916, "pin_cites": [ { "page": "633" } ], "opinion_index": 0, "case_paths": [ "/ill-app/143/0625-01" ] }, { "cite": "171 Ill. 531", "category": "reporters:state", "reporter": "Ill.", "case_ids": [ 3177908 ], "weight": 3, "opinion_index": 0, "case_paths": [ "/ill/171/0531-01" ] }, { "cite": "25 Ill. 21", "category": "reporters:state", "reporter": "Ill.", "weight": 2, "pin_cites": [ { "page": "26" } ], "opinion_index": 0 } ], "analysis": { "cardinality": 396, "char_count": 6991, "ocr_confidence": 0.521, "pagerank": { "raw": 4.03580807328026e-08, "percentile": 0.15640776740265552 }, "sha256": "542e23a8b966e771c14ab39403e8645135cb7168db4f7ce8bd320f493e0e27f3", "simhash": "1:4307621b32d62dee", "word_count": 1242 }, "last_updated": "2023-07-14T20:35:04.233078+00:00", "provenance": { "date_added": "2019-08-29", "source": "Harvard", "batch": "2018" }, "casebody": { "judges": [ "MURPHY, P. J. and BURMAN, J., concur." ], "parties": [ "South Chicago Savings Bank, Plaintiff-Appellee, v. Drexel National Bank, Defendant-Appellant." ], "opinions": [ { "text": "JUSTICE KILEY\ndelivered the opinion of the court.\nThis is an action to recover $200, the amount of a check, paid by plaintiff, South Chicago Savings Bank, upon which defendant drawee, Drexel National Bank, refused payment because the drawer directed the bank to stop payment. The court, without a jury, entered judgment for plaintiff and defendant has appealed.\nThe facts are stipulated. Bert Williams, on September 26, 1958, drew a check for $200 upon defendant, where he had an account. The payee, Velma Eobinson, indorsed the check \u201cin blank\u201d and presented it to plaintiff for payment. Plaintiff paid the amount of the check and on September 29, 1958, presented the check through the Chicago Clearing House to defendant for payment. The defendant refused payment although Williams had sufficient funds on deposit to \u201cmeet\u201d the check, because of his stop payment order before the check reached defendant.\nThe decisive question of law is whether section 188 of our Negotiable Instruments Law, ch. 98, sec. 210, Ill. Rev. Stat. (1959), applies to plaintiff, a holder in due course. Plaintiff to support the judgment argues that the section applies only to a \u201cmere holder\u201d and not to a holder in due course.\nIn 1860, our Supreme Court held that \u201cthe check of a depositor upon his banker, delivered to another for value, transfers to that other, the title to so much of the deposit as the check calls for, . . . and when presented . . . the banker . . . becomes the holder of the money to the use of the owner of the check, . . . provided the party drawing the check has funds to that amount on deposit. . . .\u201d Munn v. Burch, 25 Ill. 21, 26. This rule was applied in 1898 in Gage Hotel Co. v. Union Nat. Bank, 171 Ill. 531, against a bank despite a stop order of the drawer to the drawee before presentation.\nThe Uniform Negotiable Instruments Law was adopted by the Legislature in 1907. Section 188 of the N.I.L., ch. 98, sec. 210, Ill. Rev. Stat. (1959), provides: \u201cA check 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.\u201d After the effective date of the Act, the courts stated, \u201c[A] bank is not liable in any case to the holder of a check drawn on it \u2018unless and until it accepts or certifies\u2019 the same. . . . [B]efore the passage of the act in question ... a different doctrine prevailed.\u201d Rauch v. Bankers Nat. Bank of Chicago, 143 Ill. App. 625, 633; Chicago, B. & Q. Ry. Co. v. Merchant\u2019s Nat. Bank, 203 Ill. App. 561, 565-66 (1916); Whitewater Commercial & Savings Bank v. United States Bank of Crystal Lake, 224 Ill. App. 26, 31 (1922); Cuquet Jewelry Co. v. National Builders Bank of Chicago, 263 Ill. App. 611 (1931).\nPlaintiff insists that the rule was not changed as to holders in due course and refers us to the language of section 188 and its \u201climitation\u201d to \u201cholders.\u201d Its argument is that it is a holder in due course; that there were sufficient funds of Williams on deposit with defendant to pay the cheek; that under the rule in Munn v. Burch, 25 Ill. 21, Gage Hotel Co. v. Union Nat. Bank, 171 Ill. 531, and Rogers Park Nat. Bank v. Peterson, 233 Ill. App. 99, its cashing of Williams\u2019 check effected a transfer of title to it of the amount of the check; and that section 188 of the N.I.L. did not repeal section 57, (ch. 98, see. 77, Ill. Rev. Stat. (1959)), and did not affect the rights of holders in due course as they existed under the Munn v. Burch rule.\nSection 190 defines \u201cholder\u201d as \u201cthe payee or indorsee of a bill or note, who is in possession of it, or the bearer thereof.\u201d Ch. 98, sec. 213, Ill. Rev. Stat. (1959). Section 184 provides, \u201cA check is a bill of exchange. . . .\u201d Ch. 98, sec. 206, Ill. Rev. Stat. (1959). The term \u201cholder\u201d is not qualified in any way in section 188, and it is a general term which includes \u201cholder in due course.\u201d The section says, \u201c[T]he bank is not liable to the holder . . . [of] the check.\u201d There is no indication that the legislature intended to except \u201cholders in due course\u201d from the section.\nThere is no doubt that the rule of Munn v. Burch gave way when the state adopted the Uniform Negotiable Instruments Law. And Rogers Park Nat. Bank v. Peterson is not in point. It involved a suit by the holder of a check against the drawer of the check. The same is true of similar cases cited by plaintiff. Gage Hotel Co. v. Union Nat. Bank, 171 Ill. 531, and Union Nat. Bank v. Oceana County Bank, 80 Ill. 212, were decided before the Uniform Law was adopted and, insofar as they rely on the Munn v. Burch rule, are no longer applicable. Those cases, in addition to the Munn v. Burch rule, also held that after a check has been passed into the hands of a \u201cbona fide\u201d holder, the drawer has no power to stop payment on the check. In the Oceana case, the court decided that the drawer\u2019s stop order had no effect against the subsequent \u201cbona fide\u201d holder. The Gage Hotel case used the Oceana case as authority for its statement. But the reason for that holding was the Munn v. Burch rule, i.e., a check negotiated to a holder in due course transferred title to funds in the drawer\u2019s account in the amount of the check. Since we hold that section 188 covers holders in due course, that reason no longer supports the holdings in Gage and Oceana with respect to stop orders.\nPlaintiff argues that section 188 and section 57\u2014 defining the rights of a holder in due course \u2014 are complete in themselves, and in the absence of legislative intention to do so, section 188 cannot be construed as taking from plaintiff the protection of section 57 given by the rule announced in the Oceana, the Gage Hotel Co., and the Rogers Park Nat. Bank cases. As we have pointed out, the Oceana and Gage Hotel Co. cases were decided before the adoption of section 188, and the Rogers Park case was a suit against the drawer. Section 57 stands unaffected by section 188; it is the rule of Munn v. Burch which was affected.\nWe agree with defendant that in the practical order it would be an impossible burden for commercial banks to determine, at their risk, upon presentment of checks whether the holder is merely that or a holder in due course. Section 188 places the risk upon the person who cashes the check and who relies upon the indorser of the check.\nIn view of our construction of section 188, the drawee defendant, not having accepted Williams\u2019 check, was justified in obeying the stop order which preceded presentment and in refusing to pay the check. It is not liable to plaintiff.\nThe judgment is reversed.\nReversed.\nMURPHY, P. J. and BURMAN, J., concur.", "type": "majority", "author": "JUSTICE KILEY" } ], "attorneys": [ "Eatner, Miller, and Levenson, of Cbicago (George J. Miller, of counsel) for appellant.", "P. M. Knigbt, of Chicago, for appellee." ], "corrections": "", "head_matter": "South Chicago Savings Bank, Plaintiff-Appellee, v. Drexel National Bank, Defendant-Appellant.\nGen. No. 47,851.\nFirst District, Second Division.\nFebruary 2, 1960.\nEeleased for publication March 4, 1960.\nEatner, Miller, and Levenson, of Cbicago (George J. Miller, of counsel) for appellant.\nP. M. Knigbt, of Chicago, for appellee." }, "file_name": "0179-01", "first_page_order": 189, "last_page_order": 193 }