The defendant, a savings bank, seeks to justify the payment by it of a depositor's money, to a stranger upon the ground that such payments were made to a person having possession of the depositor's pass-book. Such a pass-book is not negotiable paper, and its possession constitutes in itself no evidence of a right to draw money thereon. It merely imports a liability of the bank to the depositor for the moneys deposited, and an agreement to repay them at such time and in such manner as he shall direct. This contract is implied from the nature and objects of the transaction occurring between the parties. (Crawford v. WestSide Bank, 100 N.Y. 51.) The depositor may by special contract authorize payments to be made in some other manner than by his directions, but, in order to make such payments a protection to the bank, it is necessary for it to show some special agreement with the customer, authorizing such a mode of payment.
The defendant in this case claims to have had such authority by force of a by-law printed in the pass-book, delivered to the plaintiff at the time of making his first deposit. Assuming, for the purpose of the argument, that the mere acceptance by the depositor of a pass-book containing by-laws regulating the manner of making deposits, and payments, constitutes a contract between the parties, we will inquire into the meaning and intent of the by-law referred to. It reads as follows: "All *Page 61 deposits and drafts must be entered in the pass-book at the time of the transaction, and all payments made by the bank, upon the presentation of the pass-book, and duly entered therein, will be regarded as binding upon the depositor. Money may also be drawn upon the written order of the depositor or his attorney when accompanied by the pass-book. No money shall be received, nor shall any money be paid out except by the teller at the bank in the presence of an officer or trustee. No money shall be withdrawn as a matter of right without three months' previous notice." We do not think this by-law supports the contention of the defendant.
It is argued by it that the phrase "all payments," as used therein, means any sum of money, delivered by it, to any person who may for the time being, have in his possession the pass-book, and it is only by assuming that such a delivery of money, is a payment upon that account, that any color of support is afforded to the argument. This may have been the understanding, and intention of the bank in framing the by-law, but in order to make that understanding obligatory upon the customer, it was also necessary that he should have a similar understanding, or that the law should have been expressed in language incapable of any other fair construction. We do not think that the word "payments," as used in it, can, according to the legal or common acceptation or meaning of the word, be construed to mean any sums which the bank might choose to disburse, regardless of the person to whom they were made. Payment by a debtor can be legally made only to the creditor or his authorized representative, and in order to constitute any other transaction a payment, it is essential to its validity, that it should be authorized by the person entitled to demand it.
The defendants have not here shown any such authority. An agreement that payments made in a particular manner shall be binding and conclusive upon the depositor does not tend to authorize a payment made to a stranger, or give any other signification to the word "payment" than it usually bears. The effect which, it is argued, should be given to the language used can be indulged in only by force of a contract with the *Page 62 depositor; but it is here attempted to imply the contract from the mere use of the word "payments," etc. This is reasoning in a circle, and proves nothing.
Further examination of the provisions of the law confirms our views. It is quite improbable that so important a power should have been left to be inferred form loose and doubtful phraseology, if it had been originally intended to be conferred by the parties, and the plaintiff is entitled in this case to that construction of the by-law which makes it conform to the popular and ordinary signification of its language.
The by-law seems to contemplate but two modes of payment, both of which require the presentation of the pass-book as the condition thereof, one apparently authorizing a payment to the depositor personally, and the other, one which may be made in his absence. The one provides for the conclusive effect of payments made, and duly entered in the pass-book, and the other, for payments made in his absence to a third person, having possession of the pass-book. This provision requires the depositor's written order to accompany the pass-book.
The fair implication from this provision is, that no other payments to strangers are contemplated or authorized. Expressiounius est exclusio alterius. Any other construction of the by-law would render the clause referred to unmeaning and inoperative. If the bank were authorized to make payments to a stranger, having possession of the pass-book alone, the provision authorizing the bank also to make such payments to a stranger, not only having possession of the pass-book, but also of the depositor's written order, would be useless and unmeaning.
It is the duty of a court to give effect to all of the provisions and language used in framing a law, if it is susceptible of such a construction, and they are precluded from giving it such an effect as will render any of its clauses inoperative or ineffectual. Such a construction as we have indicated is the only one which gives a legitimate operation to the clause referring to a written order.
This case is not affected by the decisions in Schoenwald v. *Page 63 Metropolitan Bank (57 N.Y. 418) and similar cases, where the language of the contract was substantially different. There the language of the by-law plainly implied and provided for payment, made to other persons than the depositor, and gave a signification to the word "payments" which included strangers having possession of the pass-book.
The conclusion reached by us, as to the authority conferred by this by-law upon the bank in making payments, renders it unnecessary to refer to the other questions in the case. It may not, however, be inappropriate to say that we are also of the opinion that, within the cases of Boone v. Citizens' SavingsBank (84 N.Y. 88) and Allen v. Williamsburgh Savings Bank (69 id. 321), the court below erred in refusing to submit the question to the jury as to whether, upon the evidence in the case, the defendant exercised reasonable care and prudence in making the alleged payments.
It follows of course from this, that the trial court also erred in excluding evidence tending to show the want of care and prudence on the part of the bank in disbursing the plaintiff's funds.
The judgments of the General and Trial Terms should be reversed, and a new trial ordered, with costs to abide the result.
All concur.
Judgment reversed.