
    No. 507
    GUARDIAN SAVINGS & TRUST CO. v. SCRAP IRON CO.
    No. 19765.
    Supreme Court
    On motion to certify.
    Dock. Apr. 10, 1926.
    126. BANKS & BANKING — Where a bank has received a check from the clearing house and stamped it “Paid” by mistake, may it thereafter return it because of insufficient funds in the drawer’s account?
    Attorneys — Squire, Sanders & Dempsey for Trust Co.; Harry J. Fuerst for Scrap Iron Co.; all of Cleveland.
   The Akron Scrap Iron Company brought this action originally in the Cuyahoga Common Pleas against The Guardian Savings & Trust Company and Grodin and Company, to recover" upon a check for $1477.70 drawn by Grodin and Company in favor of the Scrap Iron Co.

It appears that Grodin delivered a check to the Scrap Iron Company on the Savings & Trust Company on Sept. 6, 1923; that the check was deposited in the payee’s bank at Akron on the same day and presented for payment at the bank through the Cleveland Clearing House on Sept. 8, 1923; that the check was stamped “Paid” by mistake of a clerk; that two days later the check was marked “Can-celled in Error” and returned and that the entries were reversed. The balance of Grodin & Co’s, account was not sufficient to cover the account after payment^ of two trade acceptances just prior to receipt of the check.

The trial court directed a verdict for the bank and against Grodin & Company who had filed no answer. The Appeals reversed the judgment for error of the trial court in directing a verdict.

The Savings & Trust Co., in the Supreme Court, contends:

1. That stamping a cheek “Paid” does not constitute an acceptance.

2. That having elected to seek and take judgment against the drawer, the Scrap Iron Co. is held to' have adopted the theory that the bank never accepted the check for otherwise such judgment would be contrary to law.

3. That the check was never “Paid”.  