The words "Void if not cashed in 60 days" printed on the face of a check will be enforced as an agreement between the parties to shorten the statutory period prescribed by law for the enforcement of contracts, and these words become a part of and limit the drawee bank's certification of the check: "Certified payable only as originally drawn and when properly endorsed." A party, who acquires a check, including such an agreement and certification, sixty-one days after the check is issued, when its enforceability as a negotiable instrument has expired, cannot maintain an action against a general endorser by reason of any implied warranty under Section 66 (Code 14-607) of the Negotiable Instruments Law.
The petition of plaintiff (plaintiff in error) alleged that on or about December 19, 1960, the defendant (defendant in error) presented to the plaintiff for payment a check dated October 19, 1960, drawn on the Citizens & Southern National Bank by Smith & Jones, Inc. and signed by an officer for the drawer corporation, and payable to the order of "Chas. R. Shepherd and J. W. Glass" in the amount of $690. Printed on the check above the name of the drawee bank was "Void if not cashed in 60 days." The face of the check was stamped: "Certified Payable only as originally drawn and when properly endorsed $0690 and 00 cts The Citizens & Southern National Bank, Tenth Street Office Atlanta, Georgia Oct 19, 1960. No. D14150 -------- Authorized Signature Do not Destroy" In the space provided appears the signature "J. W. Thomas." When the defendant presented the check, the purported signatures of Charles R. Shepherd and J. W. Glass already appeared on the back of the check; the defendant placed his signature thereon; and plaintiff paid the defendant $690 in cash. On the same date it cashed the check the plaintiff transmitted it to the drawee for collection, and on the same date the plaintiff received from the drawee $690 as the proceeds of the check. "The purported signature and endorsement of J. W. Glass on said check is a forgery which fact was unknown to plaintiff at the time plaintiff paid to defendant the $690 on said check." "Plaintiff, due to its endorsement guaranteeing all prior endorsements on said check upon which the endorsement of J. W. Glass was forged, was required to reimburse the drawee, The Citizens and Southern National Bank, said drawee having given the plaintiff written notice of the alleged forged endorsement of J. W. Glass on August 2, 1961"; and plaintiff did so reimburse the drawee. Plaintiff alleges that it took the check by endorsement in good faith and for value, when it was complete and regular on its face, and when plaintiff had no notice of any infirmity in the check or defect in the defendant's title, and that plaintiff became the holder of the check before it was overdue. The petition contends that "By his said endorsement in blank on said check, defendant warranted to plaintiff that defendant had good title to said check which warranty is untrue and has been breached by defendant."
The trial court sustained the defendant's general demurrer and dismissed the petition. Thereafter during the same term of court the plaintiff made a motion to vacate the ruling on its demurrers, and the trial court denied this motion. The plaintiff assigns error on the judgments of the trial court sustaining the defendant's general demurrer and denying the plaintiff's motion to vacate.
The question here is whether the defendant is liable to the plaintiff on his general endorsement of the check by reason of the implied warranty that all preceding endorsements were genuine and that he had good title to the check in accordance with Section 66 of the Negotiable Instruments Law (Code 14-607). A general endorsement on a negotiable instrument is binding "even where a prior signature is a forgery." Odom Realty Co. v. Central Trust Co., 22 Ga. App. 711 (2) (97 SE 116). The question arises because the check had printed on its face "Void if not cashed in 60 days," and it was presented to and cashed by the plaintiff sixty-one days after the date it was issued.
We are of the opinion that the provision printed on the face of the check, "Void if not cashed in 60 days," is binding and enforceable as an agreement between the parties to shorten the statutory period prescribed by law for the enforcement of contracts. 1 Paton's Digest 802, 2B:1, and 1110, 20:5; accord, Farmers Bank of Nashville v. Johnson King & Co., 134 Ga. 486 (1) (68 SE 85, 30 LRA (NS) 69, 7, 137 ASR 242). However, it is contended by the plaintiff that once the check has been certified the reason for the drawer's time limitation no longer exists.
"A certified check has a distinctive character as a species of commercial paper, and constitutes a new contract between the holder and the certifying bank. The funds of the drawer are, in legal contemplation, withdrawn from his credit and appropriated to the payment of the check, and the bank becomes the debtor of the holder as for money had and received." McIntire v. Raskin, 173 Ga. 746, 752 (161 SE 363). "Certification is the act whereby a drawee bank obligates itself to pay a check according to its terms. It is accomplished by a bank stamping across the face of a check drawn on itself the word 'certified' or 'accepted' followed by the name of the bank and signed by an authorized bank officer or employee." 1 Paton's Digest 797, Certification, 1. Where the check is certified at the request of the drawer, the bank and the drawer are both bound, the bank being primarily and the drawer secondarily liable; where the check is certified at the request of the holder, the bank becomes the absolute debtor of the holder, and the drawer is released. McIntire v. Raskin, 173 Ga. 746, 750, supra.
The certification in this case, "Certified payable only as originally drawn and when properly endorsed," is a conditional form of certification approved by the Legal Department of the American Bankers Association for the purpose of limiting the liability of the certifying bank. 1 Paton's Digest 799, Certification, 2. "The promise of the bank is to pay the instrument according to the drawer's order. The bank . . ." by such a conditional certification ". . . has promised to follow the drawer's instruction and . . . the conditional language [void if not cashed in 60 days] need not be repeated in the certification." 1 Paton's Digest 802, Certification, 2A:6. Hence the certification became void along with the check and cannot affect the rights of the parties.
When the plaintiff acquired the check from the defendant sixty-one days after it was issued, its enforceability as a negotiable instrument had expired according to its own expressed terms. Therefore, the plaintiff cannot maintain an action against the defendant endorser by reason of any implied warranty under Section 66 of the Negotiable Instruments Law (Code 14-607).
The court did not err in sustaining the general demurrer to the petition and denying the plaintiff's motion to vacate.