USA > North Dakota > Stark County > Standard atlas of Stark County, North Dakota : including a plat book of the villages, cities and townships of the county, 1914 > Part 17
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OPENING AN ACCOUNT
T HE first step In the maller of heenming a depositor und cus- lomer of a bank la the Interview with the banker, elther The President, or Cashler, as Ihte cose may be. Ir un-
known lo Ilte banker Il Is necessary for mome one who la known to Idenify and vouch for the applicant as being hon- orable and mlraigluiforward, for banks nre compelled to be care- ful In this matter as they subsequently must handle all tho checks, drafts and cxchanges that the prospective cuatoiner em- ploys In his business, so that while Ile business of an honest man la valuable to them and is appreciated, That of a dishonest man Is shunned by Them as an element of risk and danger-the same lo Them as lo every one else with whom ho deals.
The Identification and reference, however, being sollsfeelory the prospective customer IN given a pass book or secount book. writes ils signature in n book kepl for that purpose, is inodo known to the recelving and paying tellers, makes his first deposit und In then a full fledged customer and depositor of the bank.
DEPOSITS.
D EPOSITS are made In the following manner : A "Depoult Tleket" or "Deposit Blank" Is furnished the customer, and he enters upon this a full description of all the Items whileht le desires entered lo hils credit, stating whether It lw gold, allver or currency and making a separate entry for each draft or check that ho deposits. In entering such llemy as drafts and checks sonte banks require a separate entry for each Item which will show upon whint bark or at least what elly or town each draft or cheek Is drawn. After having endorsed his nome on the back of alt cheeks and drafts he hands lho "Deposit Tlekct." together wlil all the liems nomed upon It, and his Pass Book, to the re- celving teller, who examines it, checks off the various llems to see that they aro all There, and enters the total amount lo the customer's credit In the "Pass Book;" and It Is also carried to his credit from lho Deposit Tleket onto the books of the bonk. The
"Deposit Tleket" Is an Important feature of the transaction, and tho customer Is required lo flit this out with Ink. It bears his name and the dalo and Is cutrefully preserved for future reference by the bank to selllo any dlapute or differenco that may arlse. As all
men are Ilable to error the depositor, to prevent inlstakes, should hlways seo That the amount of the deposit Is correctly entered In hils book before leaving the bank If'a deposit Is made when a customer has hot his "Pass Book" a duplicale ticket should bo tuken, and the amount entered praperly wlien next at the bank. It will be seen from the above that all checks and dratis aro entered to the eredit of the customer al the time he deposita thom, the same as cash llemy. The depositor, howover, Is held responal- ble for tho non-payment of all cheeks, drafts and other items de- poslted as cash until payment has been aseertalned by the bank. The bank, however, must uso due dillgenes In attending to them wlilln n reasonable time. If a check or draft Is held beyond a reasonable time and, mennwhlle, The bank upon which It Is drawn falls, The receiving bonk would bo compelled to lose It. What Is a reasonable time, according to deelslons of the courts, depends upon The elrcumstances and vorles In different cases. In eltles, where they have a Clearing House, checks on other elty banks aro expected lo reach the Clearing House on the next day succeeding the timo of the deposit; but as lo checks and drafts drawn upon other or distant cliles, a reasonable timo must be allowed for them lo be presented for payment. If the banker, however, is negil- gent concerning tt. ho must stand the loss. Such cases very ;avly, If over, occur, and It may safely be stated that In the absence of any speelat or unusual conditions for all Items much as checks, drafts, clc. tho banker only receives them for collection for the account of the depoaltor and therefore acts only ne hls agent and as such Is charged with using only dus diligence In attending to the business.
DISCOUNTS, LOANS, ETC.
T HE word "Discount" Is applied to Interest when it Is de- ducted from the amount at the time a loan is made-in other words, Interest thot la pald In advance, It Is the general rulo of banks in making "short time" loans to cus- lomere to give eredit for the amount of the loan, Jess the Interest. Many business men fall to obtain the full benefit that a bank con glvo them, through heallancy or diffidenco tn asking for a loon ; and In many Inulances will borrow of a neighboring busl- ness man and thus, frequently embarrass him, rather than go to the banker, whose business It Is to help him through such times of need, wisen possible. This is what banks nro established for. largely, and They are always glad to "get their money out and keep tt out" provided they can bo reasonably sure of its roturn. If an applicant la unable to furnish reasonable security, or Is Irrespon- sible or unworthy ho must necessarily be refused, but In socur- Ing money which he cannot guarantee the return of, whether It be from a banker or another business man ho does an Injustice to the Interests of business generally. Howover, overy business man In need of financial help, whether hla needs bo great or Ilttle, should go to the banker Arst and submit the situation, securities, etc., to him, as of all men he is by training the best judgo and advisor In such matters. He mny bo compelled to declino to give tho required ald, but this refusal should never bo Iuken as a per- sonat matter, as It must be remembered that ho has other inter- ests to servo and depositors, stockholders and directora to protect bcfora following his own personal desires.
COLLECTIONS.
I N leaving notes or other Items for collection the customer writes on the back of each the words! "For Collection for Account of," and places his signature below it. Upon ro- celpt of this, the proper officer or clork of the bank, will enter the Itoms elthor In the back of the customer's "pass book" or give a separate recompt as the caso may be, When the bank recotves payment on the Items the customor is notified and tho amount Is entered to his credit both on his Pass Book and on the books of the bank the same as any othor deposit. A bonk In re- eelving paper for collection acts only as the agent of the customer and does not nasumo any responsiblilty boyond due diligence on Its part. All banks mako collections elthor In or out of Ilio elty where they are located for their customers at very modoralo rales. Theso Items should always bo left at tho bank before they becomo duc, so as to givo the bank time lo give an abundant notico to tho
parties. If the customer destres lo make a "sight" or "time dratt" upon a debtor, upon application the bank will furnish him with blank drafts.
STATEMENTS AND BALANCES.
A FEW words concerning statements and balances will not ha Inappropriato In this connection. Every customer of a bank should always and without fall, once In each month, have his "Pass Book" balaneed by the banker. This rule should always be observed lo correel any error that might occur and avold loss and comptications, The amount of deposlis Is added up and a balance ta struck by deducling the lotat amount of the customer's checks which tho bank has ellher pald or "necepted" (certified) during The month. The cancelled checks are returned lo the customer. If any error Is discovered It should he reported Immediately to the bank so That it may be Investigated and rec- tlficd.
NEGOTIABLE PAPER.
P ROBABLY the greatest factor In The business world of to. duy is "Negollablo Paper," without which It Is not prob- oble thal business development could have assumed tho vast praportions that It has reached In America ; and with- out which the business of the elvilized world could not be carried on. This term Includes a variety of Instruments, such as pramla- sory notes, checka, drafta and bills of exchange. The bill of ex- change Is one of the oldest forms of negollable paper, and has been In use for a number of centurles. The draft and cheek camo Into use at n much Inter day, and the promissory note is a com- paralively recent Invention, and has very largely taken the place of the bill of exchange as It was used In former times, The most Important altribule of promissory notes, bills of exchange, and other instruinenla of the same dinas, which distingulah them from all other contracts, is thelr negofiabiltty. This consists of two en- tirely distinct elements or branches-first, the power of transferring The paper from one owner lo another, so that the assignee shall assumo a complete Ilile, and be able lo sue on It ; second, the cf- feet upon the rights of the parlles produced by such a transfer when made before maturily, In the regular course of business, for a consideration to n purchaser In good fallh, and without nollee of any defeel or defense, wherehy all defenses of the maker (with few exceptions) are cut off, and Ine holder becomes absolutely cnillled lo recover.
A written order or promise may he perfectly valld as a con- Irocl ; but I will not be negollable unless certain requlalles aro complled with. The following requislles are Indlapensable ? I1 must be written ; must be signed; il must be absolule, not depend- ing upon any contingency ; It must he to pay money In a certain nmount capable of being certain by computallon ; the time of pay'- meni must be eerlaln or such as will become certain; but when no time Is expressed The law Implles that payment Is due imme- dlotely ; and Instly, the order or promise must be accompanied by words of negotlability-thal Is, payable to a certain payee's o'der or lo bearer.
PROMISSORY NOTES.
A CCORDING to the general "law merchant," unaffected by statute, a promissory note la the written promise of a por- son, called lho "maker," to pay a certain sum of money at a certain tims to n designated person lermed the "payee" or to his order or bearer. It must have all the requisites that havo been mentioned for negotiable paper, otherwise, If It falls in any of these matters It becomes a contraet, as It thus loses the ele- ment of negotiability. Contracts may he perfectly valld without ali of these regulalles, but they do not possess the peculiar qualltles which belong to promissory noter.
Il Is customary In all promissory noles to write the words "value received" but this Is not absolutely essential, as a conald- erallon and value is Implied In every note, draft, check, bill of ex- change or endorsement. It Is the common law of both England and this country that no promise can be enforced unless mode for n considernilon or sealed, but negotlable Instruments as a rule are on exception lo this. Between the original partles a want of con- slderation can be pleaded a defense and would operate to detent a recovery. It would have the same effect as between an endorsor nnd his endorsee, but this only applies to Immedlole partles or to those who had notice of the defense or became holders of the paper afler maturtty. It may be stated as an almost Invarlablo rule that no delenso wlil operate to defeat the recovery if tha paper has been negotlaled and passed Into the hands of an Inno- cent purchaser, In the regular course of business, before maturity and for value. The absence of any of these elements, however, will allow a delenss lo be set up and will defeat recovery even In the hands of third partles If It can bo shown that there was either: a want of consideration, that It was obtained by duress, or fraud or circumvention, or lareeny ; or that the conalderallon was Illegal. In order to cut off theso defenses and give the holder tho absoluto right to recover, all of the conditions named must bo fulfilled. If he purchases the nole even one day after It becomes due It Is then subject to any defense or set off wisich tho maker may have against The original payee.
Demand of payment for n note must be made at the placo where It Is payable at the time of malurity; If not pald notlee must Immediately bo given to the endorsers, otherwise, in a ma- jorlly of the States, all endorsements that are not qualified wilt bo released. If a note la not daled It will not defeat It, but will be considered as dated when It was made; but a written date Is prima facie evidence of the time of making. When a noto falls due on Sunday, or a legal holldny, It becomes payable the day pravtous. If a sum Is written at lengths In the body and also In figures at the corner the written words controt It. It destroys tho negotiablilty of a nole to write in the body of It any conditions or contingeneles. A valuable consideration Is not always money. It may be ellher any guin or advanlago to the promisor, or injury sustalned by the promisce at tho promisor's request. A previous debt, or & fluctuating balance, or a debt due from a third person. might be a valunblo consideration. So Is a moral conalderatlon, If founded upon. a previous legal consideration as, where one promises to pay a debt that Is barred by limitation or by Infancy, But a merely moral consideration as one founded upon natural love and affec- tion Is no legal consideration. No consideration is sufficient in law If it be Illegal In ils naturo, or If distinctly opposed to publlo polley, If a note la payable at a bank it Is only necessary to have the note nt the bank at the slipulated time lo constitute a suffielent de- mand; and If there are no funds there to mcot It, this Is suf- flclent refusal. "Days of DAYS OF GRACE-In n great many States three Grace." as they are termed, are allowed on negollable thalruments beyond tho dale set for payment. This Is not the universal rule, howover, as the tendeney of late years has been toward doing nway with this custom, and a number of States have already passed laws abolishing the "Days of Grace." Whare the rule Is In effect, however, and It Is not specifically walved in the Instru- ment tho payor la entitled lo three days as fully as though It wore so stipulated, and the holder cannot enforce collection until the expiration of three days after the dute set for payment.
BILLS OF EXCHANGE.
T CHE "blil of exchange" Is an open letter or order whereby one person requests another to pay a third party (or order or bearer) a cerlatn fixed sum of money. They are of two kinds, the Inland and Foreign bills, the names of which Im- ply the difference between them. The three partles to the hill are called the Drawer, Drawee and Payce. The bill must be presented to the Draweo and If ho agrees to obey the order, hio "acceply" the bill by writing the word "accopted" across Its face and signs hle namo below It-and thus becomes tho "Acceplor." The Instrument Is usually made negollablo and tho payee can Iranster it to others by endorsement, wlilch method of transfer may go on indefinitely, The following Is n common form of an Inlund blit of exchange: BILL OF EXCHANGE. CHICAGO, ILL., June 1. 1894.
$600 Sixty days afler sight pay to Jolin Sims, or order, Slx Hun- dred Dollars, and charge samo to my account. TO HENRY HOLT & CO., JOHN DOE. Boston, Moss.
CHECKS.
A CHECK on a bank is ono form of "Inland Bill of Ex- change," but there Is soma slight difference In the Hlability of the parlles lo It. A check requires no acceptance, 8s a bonk is bound to pay the checks of its depoaltors while still In possession of their funds, and the drawer of a check having funds on depoall lins an action for damage for refusal to honor his cheek, under such elreumsinnees, on the ground of an implied ob- ligatton to pay checks according to the usual course of business. Checks are usually drawn paynble Immediately, but They may be made payable al a fulure day, and In This case Ihelr resemblanco to a bill of exchange Is very close, As atuted, a check requires no acceptance, so far as payment or llability of the drawer is con- cemed, but It crentes no obligallon against a bank In favor of The holder until acceptance. When accepled by the bank tho word "Accepled" Is stamped on Its fact wlily the signaluro of the bankor, It la Then sald to he certified and thereafter The bonk Is Ilablo to tho holder. As soon as the check Is "certifed" the amount la charged against the account of the "drawer" The same as If pald, and It la considered paid so fur as the "drawer" ts concerned. The drawer of a cheek Is not a surety In the same sende as la The drawer of a bill of exchange, but le tho principal deblor Ilko the maker of a nolc. Ho cannol complain of any delny In lho pro- seni ment, for It Is an absoluto appropriallon lo the holder of Bo much money, In The hands of the bank, and there It may No al the holder's pleasure. The delay, however, Is al the holder's risk. and If the bank should fall after ho could have got his money the loss Is his. It, before ho presents The check, the bank pays out all the money of The drawer, then ho may look to the drawer for payment. If the holder of a check Imnsters It lo another ho has the right to expect that Il wlil bo presented for payment with- In a reasonable Iline. He has the right to expect that It will ellher be presented the next day or started to the point on which It Is drawn. If it Is held beyond a reasonable lime and n loss In occasioned thereby, The parly responsible for the dolny must bear the loss. If a bank pays a forged check It le so far Ils own loss that It cannot charge the monoy to the deposllor whose name was forged. Bul II Is entitled lo recover the money from tho party who presented Il. If It pay a check of which the amount has been In falsely and fraudulently Increased, It can charge the drawer only with the original amount, provided the drawer himself hos nol caused or faclillated The forgery by carelessly writing it or leaving Il In such hands na to make the forgery or aiteration ensy. some of Ilte Sinles the Supreme Court has deelded In cases whero checks were "ralsed" that The drawer must bear tho loss as they had falled to Inke reasonable precaullon to prevent II. Pertomat. Ing and culting machines are on tho markel which moko It almost Imposalbje lo ralse or aller tho amounts so na to avold delection, and the tendency of the decisions Is lo regard tho use of These as oidy a reasonable precaullon on the parl of check drawers lo savo their bank from trouble and loss. Some, howover, adopl thio plan of writing the amount In red Ink across thelr glgnalure.
If many persons, not partners, join In a depoalt they must joln In n check. If a payee's name Is misspelled or wrong In a check, the usual plan is to endorse It first exactly as It appears and then algo the name correctly,
There la no settled rulo na lo how checks should be drawn. In nearly all tho cilles it Is an almost Invariable rule to make them payable "to order" so as to require the endorsement of the payeo : but In smaller lowns mony check drawers make them payablo "to bearer," In which case they require no endorsement, and If lost or stolen may enuse loss-as whoever presents such a cheek at tho bank is entitled to payment.
DRAFTS.
DRAFT ts a form of an "Inland bill of exchange." The two forms of bills of exchange called "drafts" are the bank draft (or exchange) and the "eight or limo draft." Tho A bank draft Is, to all Intents and purposes, the samo as a check, but the term is usually applied to "cheeks" drawn by one bank upon funds which it may have In some other bank, termed Its "correspondent." "A draft Is but very seldom made payable to bearer, It being almost an Invurlable rule to moko them payablo to a certain payee or order. They are negoltable and can bo transferred Indefinitely by endorsement If a draft Is lost or atolon, by applying lo the bank that Issued It, Ihto payment can bo slopped, and after the expiration of thirty days n duplicato wili bo Issued.
The "Sight Draft'" or "Time Drofl," in which caso It reads to pay after a certain number of days, la n very common melliod of making collections to-doy by creditors, and It serves tho double purpose of being an order to pay to n bank or third party, and la also a receipt lo the dehtor. It is almple In Ils wording, tho fol- lowing being i generot form :
$1000
CHICAOO, Juno I, 1894. At sight (or so many days after aight os this case may be) pay to tho order of - Bank One Thousand Dotlors und chargo to my account To GEO. StMIS, NEW YORK, N T. JORN SIND.
ENDORSEMENTS.
T HE signature of any payee or holder on the back of any check, draft, note, bill of exchange or other negotiable In- strument Is termed hils "endorsement." It almpty means the pineing of the name of tho holder, or payee, on the back of the Instrument, thus Indicating that, for a consideration, ho has reingulslied hls Iltle to it, und In the absence of any condl- tion or qualifientlon expressed In the endorsement, It Implies Ilint the endorser will see that the Instrument Is pald In case It la not taken up by the maker or payor. Where the Instrument la made payable to "bearer," as to "John Sims or bearer." no endorsement Is necessary to pass the tiile-It passes with dellvery and any holder may collect or suo upon Il the same as It hio were lho payee named thereln. In a case of Ihits kind If any holder en- dorses the Instrument, tho low Is construed strictly against him, and, as It was not necessary for hhn lo endores lo pass lille, thin law presuines in the absence of a postlive qualification that hla en- dorsement was made for the purpose of Indicating that he would pay it If tho payor falled lo do so. Where several payees ara named In the instrument it must bear the endorsement of all of them to pass the tlile and make ono transfer of It. In this case, however, their tiablilly as endorsere Is joint, not soveral, But where two or more holders endores ono after the other in making a transfer fram ono to the other Their Ilability Is soveral, not Joint. Every check, draft, bill of exchange, nole or other negolloblo Instrument which Is made payabio to a certain "payco or order" must bear tho endorsement of the party named, to pass the title, and even In cases Where they are made payablo lo "bearer" It Is generally customary for the party to whom a transfer is mado to require tho person from whom ho secures it to pinco his endorse- ment thercon.
There are several kinds of endorsement which should be men- tloned In this connection. The first Is the "btank endorsement," or "endorsement in blank," In making which the payce simply places his signature on the back of the Instrument, without condll- tlon or qualification of any kind. Thils passes tho title to lho In. strument, and, from that time on, It becomes payable to Wwarer. and the title passes with dellvery, until somo subsequent holder wees fit to ilmit by making It payable lo some other payco, or places somo other qualification or condillon In tho endorsement. When a negotiable Instrument benring a "blank endorsement" has once been put Into circulation, any subsequent holder of It has the right to limit or restrlet It by writing the conditions over his own endorsement, or, by writing over the endorsement of the original payee, words making It payable to himself or somo other party. "or order." This point has been deelded by Tho supreme courts of several of the Stutes.
The endorsement may bo reatrleted or quallfiled In a number of ways. One, which is called a "full endorsement," Is very e inmon In the business world, tt Is simply the act of tho puyce named making It mayable to some other certain payeo or order To do this, tho endorser writes on the back of the Instrument, the dl- rections, us: "Pay lo Jolin Shins, or nrder," and plures hl» alg- nalure below It. This does not limit his llubility as un enverser. but tho tlile to the Instrument must thereafter mim throu'h Lohn Sims, and It must beor hils endorsement before It will be patl or honored,
COPYRIGHT 1910, BY GEO, A. OGLE & CO.
SUPPLEMENT VEL
GENERAL INFORMATION ON BANKING AND BUSINESS METHODS.
Another common form of Ilmlling The endorsement Is to enable the payee twhen It is made payable to his order) to transfer hlu litle 10 the Instrument without becoming responsible for Its pay- ment, and taking the party to whom It Is transferred assume all responsibility concerning payment. To do Ihts the endorser writes the words "Without Recourse" over his signature, which has Iho effect of relinquishing his Ittfe whhout making bilin labie lo the bolder In case the payor falls to lake h up.
Another method of limiting the endorsement Is to make It con- ditlanal. a good Illustration of which Is the following: "Pay to John Sims or order upon his delivering to the First Nallonal Bank a warranty deed te fot 5, block +, etc.," below which the emforser pisces his signature. He can also make It payable lo "A. B. only." or in equivalent words, In which case "A. B." cannot enilorsu it over.
A In fact, the endorser has The power to Ilmll his emlorsement as he sees de and either lo lessen or Increase his Ilability, such as either "walving notice of demand," making his endorsement a "generaf and special guaranty of payment" to all future Itoiders, elc., but he cannol, by his endorsement, elther Increase or lessen the lisblilly of any other endorser on the Instrinnent.
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