When a joint account, or an "and/or" account, is opened, the signature department should procure a statement that the ac count opened by the parties therein named is their joint property and subject to the check of either; and in the event of the death of either the money on deposit is considered the property of the survivor. This letter is practically a will; therefore, after the bank has received notice of the death of either party, it is neces sary for the signature department to obtain a waiver of inherit ance tax from the state comptroller before a check can be drawn against such account. State law may vary the procedure.
An account opened by a firm or corporation of which a person is sole owner requires special care to protect the bank. Some states require that a certificate of sole ownership be filed with the county court, in which case a copy of the certificate should be obtained by the signature department for its files. If such firm or corporation wishes to empower someone else to sign checks, a power of attorney should be procured by the department and it should be so phrased as to protect the bank.
When an account is opened by an agent of a foreign house and is to remain for a sufficient length of time to allow communicating with the agent's principals, a letter should be requested from them by the department, defining the nature of the agency and the ownership of the funds and giving the signatures of those who have the right to withdraw the funds.
Certification Department—Function and Organization In a small bank all the certification work is done by the paying teller; but in large banks, particularly in the vicinity of the specu lative exchanges, the volume of business is large enough to require a specialized certification department. A single Wall Street bank, in the days of unsecured day loans, certified between Soo and ,000 checks per day, in an amount ranging from SI 5,000,000 to $35,000,000.
The internal organization of such a department in a large bank would consist of : 1. A clerk at the receiving window, who receives the items for certification and issues in exchange an identification receipt.
2. A certification clerk, who supervises the department and passes upon the certification.
3. Entry clerks, who keep records of the certifications and balances.
4. Another window man, who hands out the certified items in exchange for the identification receipts.
The certification of an item is accomplished by the proper officer of the drawee bank writing upon the face of the item the word "good," "certified," "accepted," or other equivalent phrase, and signing. The certification operates as a guaranty that the signature is genuine, that the bank has in its possession sufficient funds of the drawer to meet the item at maturity, and that it will hold enough of those funds for that purpose; it re leases the drawer, but does not guarantee the indorsements to be genuine.
The object of certifying is to enable the holder to use the check more readily. The transferee takes it with the same readi ness and sense of security with which he would take the notes of the bank. It may even serve all the purposes of money until it is pre sented for payment and extinguished; small, round-denomination certified checks become very current in times of financial strin gency. This enables persons not well acquainted with each other to deal together promptly and with safety, for the credit of the checks is guaranteed or assumed by the bank, which is well known.
Outstanding Certified Checks and Identification Receipt System The bookkeepers in the check desk department keep a book called the "outstanding certified check book." It contains a record of checks that have been certified by the bank but have not been presented for payment through the clearing house or tellers. Outstanding certified checks are continuing liabilities of the bank; some may date back many years; the writer knows of one which a bank has carried since 1879.
When a certified check is mislaid, stolen, lost, or destroyed and the maker desires credit for it, the certifying bank requires him to file an indemnity bond relieving the bank of responsibility in the matter. If a depositor has a check certified, which later for some business or personal reason he finds he cannot use, his ac count is restored by his depositing it to his own account; the check reaches the check desk through the regular channels, where it is written off the outstanding certified check book and credited to his account again; whether the check is payable to "bearer" or a specific payee or indorsee, it is sufficient that only the maker indorse such redeposited certified check.