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Rock Finance Co. v. Central Nat. Bank

OPINION FILED JANUARY 10, 1950

ROCK FINANCE COMPANY, APPELLANT,

v.

CENTRAL NATIONAL BANK OF STERLING, APPELLEE.



Appeal by plaintiff from the Circuit Court of Whiteside county; the Hon. RAY I. KLINGBIEL, Judge, presiding. Heard in this court at the October term, 1949. Judgment affirmed. Opinion filed January 10, 1950. Released for publication February 9, 1950.

MR. JUSTICE BRISTOW DELIVERED THE OPINION OF THE COURT.

In a proceeding instituted by plaintiff, Rock Finance Company, to recover the proceeds of two checks, payable to plaintiff, in the amounts of $12,550 and $4,010, respectively, and drawn on the defendant, Central National Bank of Sterling, the circuit court of Whiteside county entered a summary judgment in favor of defendant, from which plaintiff has prosecuted this appeal.

In determining the propriety of this summary judgment, relieving defendant of liability, the sole query herein is whether defendant evidenced its decision not to pay the checks by the end of the next business day, within the meaning of the terms and provisions of the Illinois Negotiable Instruments Statute. (Ill. Rev. Stat. 1947, ch. 98, par. 207a [Jones Ill. Stats. Ann. 89.207(1)].)

The facts are uncontroverted. On Februry 10, 1940, plaintiff deposited to its account with the Illinois National Bank & Trust Co. of Rockford two checks, payable to plaintiff, in the amounts of $12,550 and $4,010, respectively, drawn by the Auto Mart, Inc., on the defendant bank.

The checks were regularly forwarded through the Federal Reserve Bank of Chicago to the defendant bank on February 13, 1940. The defendant bank held the checks, and apparently did not decide whether it would pay them until some time between 4:30 p.m. and 5:12 p.m. on February 14, 1940, when it telegraphed the Federal Reserve Bank, advising of the nonpayment of the checks. The Federal Reserve Bank thereupon accepted the checks back for credit.

It appears further that, on February 14, 1940, the defendant bank transacted business with the public between the hours of 9:00 a.m. and 3:00 p.m.

Plaintiff instituted this proceeding on December 27, 1949, to secure payment of the checks from defendant on the theory that defendant's failure to decide whether or not to pay the checks before 3:00 p.m. on February 14, 1940, constituted an implied acceptance of the liability thereon.

Defendant maintained that under the statute allowing it until the end of the next business day to decide whether or not to pay the checks, it had until midnight of February 14 to decide, and that by forwarding the telegram to the Federal Reserve Bank at 5:12 p.m. on February 14, it had complied with the statute, and was thereby relieved from all liability on the checks. Inasmuch as this constituted an absolute defense, defendant contends there was no triable issue of fact, and hence, the summary judgment of the circuit court was proper.

It is evident, however, that if the "business day" ended at 3:00 p.m., as plaintiff insists, defendant would not have complied with the statute, and the issue of defendant's liability would depend upon other affirmative defenses involving certain questions of fact. Under those circumstances, the summary judgment would be in error.

It is incumbent upon this court, therefore, in reviewing the judgment of the circuit court, to ascertain the proper meaning of the phrase "business day," as provided in par. 207a of the Negotiable Instruments Law. (Ch. 98, Ill. Rev. Stat. 1947 [Jones Ill. Stats. Ann. 89.207(1)].)

This section provides:

"The drawee bank named in a check presented to it by mail or through a clearing house association, or through a settlement with another bank or banks, or for deposit in an account in the drawee's bank is allowed until the end of the next business day following the day of presentation to decide whether or not it will pay the check."

Plaintiff argues that the term "business" qualifies the word "day," and limits the number of hours therein to those during which the bank is open for the transaction of business with the public.

Defendant insists that the words "business day" are a unit with an established meaning in the parlance of negotiable instruments, whereby the phrase denotes a twenty-four hour day on which business is ...


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