5. Withdrawing By Written Order And Pass Book

Another rule provides that a depositor may withdraw his deposit by sending through another person a written order and his pass book. Unless a savings bank complies with this rule, the other just mentioned, that it will not be liable if it pays on the presentation of the book, the payment of a forged order accompanied with the book will afford no protection. A bank forty years ago that had paid on such an order attempted to defend against paying the true depositor, but the court said that a forged order was no order at all, while the presentation of the bank book alone had no greater effect, for the book was not negotiable and might have been stolen and presented, and in truth such was the case. The rights of depositors require more than this. "Had the book contained this further notice, that the presentation of the book shall be taken to be full authority for paying the money, the bank would have had a good defense." 1

6. Rules Not Contradictory

One more preliminary question may be asked. Are not the rules declaring that the bank will pay only on the presentation of the depositor himself with his book, or the sending of an order with his book, inconsistent with the rule declaring itself justified or protected in paying to any one who comes with the book, or who brings an order with the book? Can the first two rules be reconciled with the other? Every savings bank knows there is danger of paying the wrong depositor; identification is often difficult; and a rogue may, in spite of all the efforts of a paying teller, succeed in fooling him. The rogue appears in company with identifiers who seem to be worthy of belief, and the paying teller is duped. Therefore to protect the bank in such cases this third by-law, variously expressed, has been adopted by savings banks everywhere, nor is it regarded as inconsistent with the other regulations mentioned relating to the payment of deposits.

7. Bank Must Use Proper Care

A bank can not, however, avail itself of the protection afforded by this rule unless it has used proper care. The occasions are quite numerous on which banks have been negligent in paying deposits without proper inquiry. On one of them a per-son appeared with a book claiming to be the owner and drew some money, signing a receipt therefor. His signature was compared with that in the signature book, and the teller, satisfied with its genuineness, paid the money.

1 Eaves v. People's Savings Bank, 27 Conn. 233

The bank had adopted the rule that though it would "endeavor" to prevent fraud upon its depositors, yet all payments to persons producing the pass books issued by the bank should be a valid discharge. The court, without questioning the reasonableness of the rule, remarked that it did not dispense with the exercise of "ordinary care" on the part of the bank's officers in paying depositors. The paying teller was deemed not negligent, though two of the judges differed from their associates.

In a few cases the courts have gone so far as to hold that this rule may be used as a shield by a bank official even when he has been negligent. Almost universally the law frowns upon negligence; also upon all agreements absolving contractors from the consequences of their negligence. Surely no exemption ought to be granted to savings bank officers. The fund committed to their care is worthy of the most adequate protection. It would be a travesty on the government of a state, after hedging investments around with so many safeguards, to permit savings-bank officers to be neglectful in paying out the funds of their depositors. Indeed, it has been questioned whether such a rule could be adopted ; whether it would be within the chartered authority of a bank to go so far.