Speroff v. First Central Trust Co.

149 Ohio St. 415; April 21, 1948; Weygandt, C.J.

Digest by Donna
FACTS

Vassil Speroff issued a check drawn on First Central Trust Co. on April 26, 1945. On the
same day, he revoked and countermanded the check notifying the Bank not to pay.

When Speroff ordered the Bank not to pay, he signed a release or statement to the effect
that it is understood that [the Bank] will in no way be held responsible if [it]
should pay the check through inadvertency or oversight.

The Bank nevertheless paid the check a month thereafter so Speroff sued the Bank to
recover the amount of the check.

The trial court ruled in favor of the Bank. On appeal, the CA reversed the trial court on the
grounds that the release or statement signed by Speroff is void:
1. for want of consideration and
2. because it is contrary to public policy

ISSUES:
Whether or not the statement or release signed by Speroff constitutes a valid defense. NO
HELD:
The release is void and not a valid defense. However, defendant Bank stated a valid defense
in alleging that it exercised good faith and reasonable care. The judgment is MODIFIED and
cause REMANDED.
RATIO
Speroff had the right to countermand or revoke the check.
A bank check, being an order on the bank by the drawer to pay his money as
therein directed, is revocable by him before its presentation for payment,
unless the bank on which it is drawn has accepted or certified it. (Khan, Jr. v.
Waltoin)

Defendant Bank alleges that the payment was occasioned by inadvertence and/or
oversight invoking the release or statement signed by Speroff. However, the Court upheld
the holding of the CA that the release is void for want of consideration and because it is
contrary to public policy.
1. Want of consideration.
The defendant Bank was aware that a check is simply an order which may be
countermanded and payment forbidden by the drawer any time before it is actually
cashed or accepted and that an order to stop payment may either be oral or in writing
so long as it convey to the bank a definite instruction to that effect.
Under the reciprocal rights and obligations inherent in the relationship between a bank
and its depositors, it was the duty of the Bank not to pay the check after receiving such
an order from plaintiff depositor.
No benefit or consideration was received by plaintiff in signing the release, on the
contrary, it suffered a detriment and the Bank suffered no detriment but received a
benefit,
2. Contrary to public policy.
A bank is required by law to act in good faith and exercise reasonable care in its
relationship with its depositors. The obtaining from the plaintiff of a purported release

from liability for inadvertence or oversight as a condition of the order to stop payment
of the check was contrary to public policy and did not relieve the defendant Bank from
its duty to act in good faith and exercise reasonable care.