26. Due Bills Instead Of Certification

Some banks, especially in Philadelphia, refuse to certify checks, but give due bills in place of them. A depositor wishes to have his check certified to use in making a payment as above described. He takes his check to the bank and is told that it will accept his check, charge it against his account, and give him a due bill for the amount, which is an order by the bank on itself, and is paid through the clearing house the day after its issue. Due bills are kept in a book and numbered. A similar number is given to the stub on which is made a record of the amount, the date, and person to whom the bill is issued.

This serves the same purpose. The banks claim that this is a somewhat safer practice; there is less danger of forgery and alterations. For, it maybe remarked, the use of certified checks has given rise to some exceedingly grave questions which will now be considered.

27. Forged Certification

First, suppose a certified check is offered to a banking house, for example, in paymerit of bonds, and the seller should send it to the certifying bank to ascertain whether or not the certification was genuine, and the messenger should be told that it was genuine, what would be the effect or purport of the answer? Undoubtedly that the name signed to it was genuine. And the person having bonds for sale would be justified in relying on that answer and in taking the check. If, therefore, it proved to be a forgery, the bank would be liable. Suppose the receiver of a check takes it to the bank to be certified, which is done in some cases. Is the bank holden for the amount? One would have no hesitation in saying yes. Suppose, however, the check had been raised before it was thus presented and is certified, is the bank holden? The courts have given the same answer. Now, returning to the former question, suppose a check is presented with the inquiry, is it "genuine" or "all right," does this question relate to anything more than the signature? Does it also cover the amount? The answer to this question is not so easy. It may mean one of three things, or two or all of them. It may mean that the certification itself is genuine, or that the: maker's signature is genuine, or that the amount itself is correct, or it may mean all of these things that the signatures of both maker and certifier are genuine, and that the amount is the correct sum. If the paying teller is distinctly asked, are the maker's signature and amount all right, and he gives an affirmative answer, undoubtedly his bank would be holden. Again, he can easily find out whether the amount has been raised by comparing the amount with the record of the check he has in his possession. And it is his duty to do this. But it has been held in a noted New York case that if a check is presented and the question is asked, "is it good" or "all right," this simply relates to the signature and not to the amount. If therefore, the alteration or raising was done after the certification, the bank is not holden for the raised amount, when it is finally presented for payment. This decision has been often criticised and has not been approved in other states. For when a check is presented in order to make this inquiry, the courts have generally said that the inquiry had reference to the amount as well as the signature.