Reply: If the drawer of the check in this case had sufficient money on deposit to meet it our correspondents have no other recourse except against the assets of the insolvent bank; the depositor is discharged. The usual rule is that when a check is delivered that is drawn upon a bank in the same place in which the payee resides the drawer guarantees the solvency of the bank during the remainder of the day on which the check was delivered and the whole of the next day. The holder has this much time in which to present the check and draw the money; if the bank fails meanwhile the loss is upon the drawer of the check and the holder takes the risk of failure after the second day. But this rule does not apply when the holder of the check takes it to the bank and has it certified before the end of the next day after he receives it. Certification binds the bank and releases the drawer. So far as the drawer and holder are concerned, the effect is precisely the same as if the holder had drawn the money and had then deposited it to his own credit in the same bank.
A CONTRACT MAY BE CANCELLED WHEN ONE PARTY IS GUILTY OF BREACH.
Question—Lumber has been sold for delivery in installments running through a considerable period. Payments are to be made in installments also. The buyer has been very lax in this regard, however; he has not made a single payment strictly on time, and in some cases has delayed until the seller has been compelled to threaten suit. Is the seller bound to go on making deliveries to the end of the time named in the contract, getting his money whenever and however the tardy buyer sees fit to pay it?
Reply: If a seller agrees to deliver the goods at certain times, and the buyer agrees to pay for them in installments at given dates, each promise is a consideration for the other. If either the buyer or the seller fails to do his full duty under the contract he is in no position to demand that the other shall do what he has agreed to do. In other words, as soon as either is guilty of any breach of the contract the other may declare the whole agreement at an end; he may refuse to do anything further under the contract himself, and may demand damages of the person who was guilty of the breach. If a buyer fails to meet any payment promptly when it is due, the seller, if he chooses to do so, may immediately rescind the contract and bring suit for the unpaid installments and for damages. If he had not this privilege he might be compelled to go on for months delivering his goods to one who had already shown his unwillingness or inability to make good his promise of payment.