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Full Opinion
I.
The case sub judice involves a bank check. A check is defined as a draft payable on demand and drawn on a bank. Maryland Code (1974, 2002 Repl.Vol.), Commercial Law Article, § 3-204(f)(i).
The case sub judice arises from Petitioner’s irritation with the Bank of America’s Thumbprint Signature Program. Under the Thumbprint Signature Program, a bank requests non-customer presenters of checks over the counter to place an “inkless” thumbprint or fingerprint on the face of the check as part of the identification process. The program was developed, as the Court of Special Appeals informs us in its opinion in this case, by the American Bankers Association, working with the Federal Deposit Insurance Corporation (FDIC), the Federal Reserve Banks, the Office of the Comptroller of the Currency, the Federal Bureau of Investigation, and other law enforcement officials and banking trade associations across the county in response to rising instances of check fraud. Mess
II.
At some point in time prior to 3 August 2000, Petitioner, as a holder, came into possession of a check in the amount of Nine Hundred Seventy-Six Dollars ($976.00)(the check) from Toyson J. Burruss, the drawer, doing business as Prestige Auto Detail Center. Instead of depositing the check into his account at his own bank, Petitioner elected to present the check for payment at a branch of Mr. Burruss’ bank, Bank of America, the drawee.
At some point during the transaction, the teller counted out $976.00 in cash from her drawer in anticipation of completing
Petitioner requested, and was referred to, the branch manager. Petitioner presented the check to the branch manager and demanded that the check be cashed notwithstanding Petitioner’s refusal to place his thumbprint on the check. The branch manager examined the check and returned it to the Petitioner, informing him that, because Petitioner was a non-customer, Bank of America would not cash the check without Petitioner’s thumbprint on the instrument. After some additional exchanges, Petitioner left the bank with the check in his possession. The branch manager advised the teller that Petitioner had left the bank with his check. In response, the teller released the hold on the customer’s funds, voided the transaction in the computer, and placed the cash back in her teller drawer.
Rather than take the check to his own bank and deposit it there, or returning it to Burruss, the drawer, as dishonored and demanding payment, Petitioner, two months later, on 10 October 2000, filed a declaratory judgment action against Bank of America (the Bank) in the Circuit Court for Baltimore City. Petitioner claimed that the Bank had violated the Maryland Uniform Commercial Code (UCC) and had violated his personal privacy when the teller asked Petitioner to place an “inkless” thumbprint on the face of the check at issue. Petitioner asked the trial court to declare that: 1) Petitioner had provided “reasonable identification” without his thumbprint;
On 15 November 2000, the Bank filed a Motion to Dismiss or, in the alternative, for Summary Judgment. Petitioner opposed the Bank’s Motion and filed a “cross” Motion for Summary Judgment. After the Circuit Court heard oral arguments on the pending motions, it denied Petitioner’s request for injunctive relief and entered summary judgment in favor of the Bank, dismissing the Complaint with prejudice.
Petitioner appealed on 17 January 2001. The Court of Special Appeals concluded that the Circuit Court’s decision in favor of the Bank was legally correct, but remanded the case for entry of a proper declaratory judgment as to the rights of the parties consistent with its opinion. Messing v. Bank of America, 143 Md.App. 1, 792 A.2d 312 (2002).
Petitioner petitioned this Court for a writ of certiorari. On 10 June 2002, we granted the petition. Messing v. Bank of America, 369 Md. 301, 799 A.2d 1262 (2002).
III.
Six questions are presented for our consideration. They are:
“1. Did the Court of Special Appeals err in construing the requirement of giving “reasonable identification” under the Annotated Code of Maryland, Commercial Law*683 Article, Section 3-501(b)(2), to require a thumbprint if demanded by a drawee to whom presentment of a check is made, notwithstanding the proffer of reasonable and customary documentary forms of identification?
“2. Did the Court of Special Appeals err in finding the [Respondent] did not accept the particular check at issue, as “acceptance” is defined in the Annotated Code of Maryland, Commercial Law Article, Section 3-409(a)?
“3. Did the Court of Special Appeals err in finding that the [Respondent] did not dishonor the particular check at issue, as “dishonor” is defined in the Annotated Code of Maryland, Commercial Law Article, Section 3-502(d)(1)?
“4. Did the Court of Special Appeals err in finding the [Respondent] did not convert the cash proceeds of the particular check at issue, as “conversion” is set out in the Annotated Code of Maryland, Commercial Law Article, Section 3-420?
“5. Did the Court of Special Appeals err in not giving full effect to the plain language of the Annotated Code of Maryland, Commercial Law Article, Section 3-111, that states that when no address is stated in an instrument, “The place of payment is the place of business of the drawee or maker. If the Drawee or maker has more than one place of business, the place of business is any place of business of the drawee or maker chosen by the person entitled to enforce the instrument”?
“6. Did the Court of Special Appeals err in vacating the judgment of the Circuit Court for Baltimore City and remanding the case to the Circuit Court for the entry of a written declaration of the rights of the parties consistent with the Court of Special Appeals’ opinion?”
IV.
Summary judgment is only appropriate where, when viewing the motion and response in a light most favorable to
Making a determination in this case will involve a considerable amount of statutory analysis. With that in mind, we reiterate the rules set forth in Jefferson v. Jones, 286 Md. 544, 547-48, 408 A.2d 1036, 1039 (1979) (citations omitted), where we stated:
Although we are directed by the General Assembly to construe the Uniform Commercial Code in a manner which “make[s] uniform the law among the various [states]” adopting it, Md.Code (1975), Commercial Law Art., §§§ 1-102(1), -102(2)(c), we nonetheless utilize, in interpreting the Code, the same principles of statutory construction that we*685 would apply in determining the meaning of any other legislative enactment. These well settled principles require ascertainment of the legislative intent, and if, as is the case here, construction becomes necessary because the terminology chosen is not clear, then we must consider not only the significance of the literal language used, but the effect of our proposed reading in light of the legislative purpose sought to be accomplished. Unlike most state statutory enactments, the U.C.C. is accompanied by a useful aid for determining the purpose of its provisions — the official comments of the Code’s draftsmen. While these comments are not controlling authority and may not be used to vary the plain language of the statute, they are an excellent place to begin a search for the legislature’s intent when it adopted the Code.
V.
A. Petitioner’s Arguments:
Petitioner argues initially that he properly presented the check to the drawee bank and that the bank accepted the check. In Petitioner’s view, the Bank’s request for thumbprint identification was unreasonable as it would not aid the Bank in identifying the Petitioner as the proper person to pay at the time payment was made, but would be useful only at some later date, if at all. Petitioner’s argument is fairly straight forward, adopting a “follow the bouncing ball” approach to the application of Maryland Code (1957, 2002 Repl.Vol.), Commercial Law Article, Title 3, to the facts of this case.
*686 Except as otherwise provided for items in Title 4 [Bank Deposits and Collections], an instrument is payable at the place of payment stated in the instrument. If no place of payment is stated, an instrument is payable at the address of the drawee or maker stated in the instrument. If no address is stated, the place of payment is the place of business of the drawee or maker. If a drawee or maker has more than one place of business, the place of payment is any place of business of the drawee or maker chosen by the person entitled to enforce the instrument. If the drawee or maker has no place of business, the place of payment is the residence of the drawee or maker.
In short, Petitioner’s position is that, assuming all else is in order, § 3-111 requires Bank of America to pay a check drawn on one of its customer’s accounts if presentment is made over the counter at the Bank.
Petitioner cites § 3-501, which states:
(a) “Presentment” means a demand made by or on behalf of a person entitled to enforce an instrument (i) to pay the instrument made to the drawee or a party obliged to pay the instrument or, in the case of a note or accepted draft payable at a bank, to the bank, or (ii) to accept a draft made to the drawee.
(b) The following rules are subject to Title 4, agreement of the parties, and clearinghouse rules and the like:
(1) Presentment may be made at the place of payment of the instrument and must be made at the place of payment if*687 the instrument is payable at a bank in the United States; may be made by any commercially reasonable means, including an oral, written, or electronic communication; is effective when the demand for payment or acceptance is received by the person to whom demand for payment or acceptance is received by the person to whom presentment is made; and is effective if made to any one of two or more makers, acceptors, drawees, or other payors.
(2) Upon demand of the person to whom presentment is made, the person making presentment must (i) exhibit the instrument, (ii) give reasonable identification and, if presentment is made on behalf of another person, reasonable evidence of authority to do so, and (iii) sign a receipt on the instrument for any payment made or surrender the instrument if full payment is made.
(3) Without dishonoring the instrument, the party to whom presentment is made may (i) return the instrument for lack of a necessary indorsement, or (ii) refuse payment or acceptance for failure of the presentment to comply with the terms of the instrument, an agreement of the parties, or other applicable law or rule.
(4) The party to whom presentment is made may treat presentment as occurring on the next business day after the day of presentment if the party to whom presentment is made has established a cutoff hour not earlier than 2 p.m. for the receipt and processing of instruments presented for payment or acceptance and presentment is made after the cutoff hour.
Petitioner argues that he correctly made “presentment” of the check to the Bank pursuant to § 3-111 and § 3-501(a), and demands that, as the person named on the instrument and thus entitled to enforce the check, the drawee Bank pay him. Petitioner further argues that his presentment was in the proper form set forth in § 3-501 (b)(2). Petitioner points out that he exhibited the instrument when he arrived at the counter and that, upon request, he provided reasonable identification in the form of his driver’s license and a major credit card, and that he surrendered the check to the teller, who
In a continuation, Petitioner contends that the teller, by placing the check in the slot of her computer, and the computer then printing certain information on the back of the check, accepted the check as defined by § 3 — 409(a), which states:
(a) “Acceptance” means the drawee’s signed agreement to pay a draft as presented. It must be written on the draft and may consist of the drawee’s signature alone. Acceptance may be made at any time and becomes effective when notification pursuant to instructions is given or the accepted draft is delivered for the purpose of giving rights on the acceptance to any person.
Relying on § 3 — 401(b), Petitioner argues that the act of the Bank’s computer printing information on the back of the check constitutes the Bank’s signature, and thus effectuates acceptance of the check on the part of the Bank. Section 3-401 states:
(a) A person is not liable on an instrument unless (i) the person signed the instrument, or (ii) the person is represented by an agent or representative who signed the instrument and the signature is binding on the represented person under § 3-402.
(b) A Signature may be made (i) manually or by means of a device or machine, and (ii) by the use of any name, including a trade or assumed name, or by a word, mark or*689 symbol executed or adopted by a person with present intention to authenticate a writing.
In support, Petitioner points to part of the Official Comment 2 attached to § 8-409, as follows:
Subsection (a) states the generally recognized rule that the mere signature of the drawee on the instrument is a sufficient acceptance. Customarily the signature is written vertically across the face of the instrument, but since the drawee has no reason to sign for any other purpose a signature in any other place, even on the back of the instrument, is sufficient. It need not be accompanied by such words as “Accepted,” “Certified,” or “Good.”9
Thus, according to Petitioner, because the Bank’s computer printed information on the back of the check, under § 3-4:01(b) the Bank “signed” the check, said “signature” being sufficient to constitute acceptance under § 3-409(a).
Petitioner’s remaining arguments line up like so many dominos. According to Petitioner, having established that under his reading of § 3-409(a) the Bank accepted the check, Petitioner advances that the Bank is obliged to pay him, pursuant to § 3-413(a) which states:
(a) The acceptor of a draft is obliged to pay the draft (i) according to its terms at the time it was accepted, even though the acceptance states that the draft is payable “as originally drawn” or equivalent terms, (ii) if the acceptance varies the terms of the draft, according to the terms of the draft as varied, or (iii) if the acceptance is of a draft that is an incomplete instrument, according to its terms when completed, to the extent stated in §§ 3-115 and 3-407. The obligation is owed to a person entitled to enforce the draft or to the drawer or an indorser who paid the draft under § 3-414 or § 3-415.
(d) Dishonor of an accepted draft is governed by the following rules:
(1) If the draft is payable on demand, the draft is dishonored if presentment for payment is duly made to the acceptor and the draft is not paid on the day of presentment.
Petitioner claims that the drawee Bank of America solely would be liable as the acceptor because, under § 3-414(c), the drawer of the check is discharged upon acceptance by the Bank. Section 3-414(c) states: “If a draft is accepted by a bank, the drawer is discharged, regardless of when or by whom acceptance was obtained.”
Petitioner extends his line of reasoning by arguing that the actions of the Bank amounted to a conversion under § 3-420, which states, in allegedly relevant part:
(a) The law applicable to conversion of personal property applies to instruments. An instrument is also converted if it is taken by transfer, other than a negotiation, from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect to the instrument for a person not entitled to enforce the instrument or receive payment. An action for conversion of an instrument may not be*691 brought by (i) the issuer or acceptor of the instrument or (ii) a payee or indorsee who did not receive delivery of the instrument either directly or through delivery to an agent or co-payee.
Based on this, Petitioner argues that because the Bank accepted the check, an act which, according to Petitioner, discharged the drawer, he no longer had enforceable rights in the check and only had a right to the proceeds.
B. Acceptance under § 3-409(a).
Predictably, Bank of America argues that Petitioner’s interpretation of Maryland’s U.C.C. is incorrect. Our intermediate appellate court brethren largely agreed with the Bank’s point of view. Setting aside for the moment the Bank’s arguments as to the reasonableness of requiring a thumbprint, we turn to the Bank’s obligations, or lack thereof, with regard to the presentment of a check by someone not its customer. Bank of America argues, correctly, that it had no duty to the Petitioner, a non-customer and a stranger to the Bank, and that nothing in the Code allows Petitioner to force Bank of America to act as a depository bank [§ 4-105] and cash a check for a non-customer. As the Supreme Court pointed out in Barnhill v. Johnson, 503 U.S. 393, 398-99, 112 S.Ct. 1386, 118 L.Ed.2d 39 (1992):
Under the U.C.C., a check is simply an order to the drawee bank to pay the sum stated, signed by the makers and payable on demand. Receipt of a check does not, however, give the recipient a right against the bank. The recipient may present the check, but if the drawee bank refuses to honor it, the recipient has no recourse against the drawee.
*692 * * * * *
This is because ... receipt of a check gives the recipient no right in the funds held by the bank on the drawer’s account.
Absent a special relationship, a non-customer has no claim against a bank for refusing to honor a presented check. City Check Cashing, Inc. v. Manufacturers Hanover Trust Co. 166 N.J. 49, 764 A.2d 411, 417 (2001). A “transient, non-contractual relationship” is not enough to establish a duty. Id. (quoting FMC Corp v. Fleet Bank, 226 A.D.2d 225, 641 N.Y.S.2d 25, 26 (1996)). It is also well settled that a check does not operate as an assignment of funds on deposit, Ward v. Federal Kemper Ins. Co., 62 Md.App. 351, 357-58, 489 A.2d 91, 94 (1985), and the bank only becomes obligated upon acceptance of the instrument. This is made clear by § 3-408, which states:
A check or other draft does not of itself operate as an assignment of funds in the hands of the drawee available for its payment, and the drawee is not liable on the instrument until the drawee accepts it.
Once a bank accepts a check, under § 3-409, it is obliged to pay on the check under § 3-413.
Respondent Bank of America argues that the intermediate appellate court correctly found that it did not “accept” the check as that term is defined in § 3-409(a). Messing, 143 Md.App. at 16-19, 792 A.2d at 321-23 (2002). We agree. The mere fact that the teller’s computer printed information on the back of the check does not, as Petitioner contends, amount by itself to an acceptance. Section 3-409(a) states:
(a) “Acceptance” means the drawee’s signed agreement to pay a draft as presented. It must be written on the draft and may consist of the drawee’s signature alone. Acceptance may be made at any time and becomes effective when notification pursuant to instructions is given or the accepted draft is delivered for the purpose of giving rights on the acceptance to any person.
Petitioner relies on the first two sentences of the statute, while ignoring the balance. The statute clearly states that acceptance becomes effective when the presenter is notified of that fact. The facts demonstrate that at no time did the teller notify Petitioner that the Bank would pay on the check. Rather, the facts show that:
[T]he check was given back to [Petitioner] by the teller so that he could put his thumbprint signature on it, not to notify or give him rights on the purported acceptance.
*694 After appellant declined to put his thumbprint signature on the check, he was informed by both the teller and the branch manager that it was against bank policy to honor the check without a thumbprint signature. Indignant, [Petitioner] walked out of the bank with the check.
143 Md.App. at 19, 792 A.2d at 323. As the intermediate appellate court correctly pointed out, the negotiation of the check is in the nature of a contract, and there can be no agreement until notice of acceptance is received.
C. “Conversion” under § 3-420.
Because it never accepted the check, Bank of America argues that the intermediate appellate court also correctly concluded that the Bank did not convert the check or its proceeds under § 3-420. Again, we must agree. The Court of Special Appeals stated:
“Conversion,” we have held, “requires not merely temporary interference with property rights, but the exercise of unauthorized dominion and control to the complete exclusion of the rightful possessor.” Yost v. Early, 87 Md.App. 364, 388, 589 A.2d 1291 (1991) (citations omitted)(quotations omitted). At no time did [Respondent] exercise “unauthorized dominion and control [over the check] to the complete exclusion of the rightful possessor,” [Petitioner].
[Petitioner] voluntarily gave the check to [respondent’s] teller. When [Petitioner] indicated to the teller that he was not an account holder, she gave the check back to him for a thumbprint signature in accordance with bank policy. After*695 being informed by both [Respondent’s] teller and branch manager that it was [Respondent’s] policy not to cash a non-account holder’s check without a thumbprint signature, [Petitioner] left the bank with the check in hand.
Because [Petitioner] gave the check to the teller, [Respondent’s] possession of that check was anything but “unauthorized.” and having returned the check, within minutes of its receipt, to [Petitioner] for his thumbprint signature, [Respondent] never exercised “dominion and control [over it] to the complete exclusion of the rightful possessor,’’[Petitioner]. In short, there was no conversion.
Messing, 143 Md.App. at 21, 792 A.2d at 324.
Nor was there a conversion of the cash proceeds. As we set forth supra, under § 3-409(a), Bank of America never accepted the check, and thus never became obligated under § 3-413(a) to pay on the check. Pursuant to § 3-408, Petitioner never had a right to the funds on deposit, and Bank of America cannot convert funds to which Petitioner has no right in the first instance.
Similarly, as Bank of America never accepted the check, Petitioner’s argument that he no longer has rights in the instrument is incorrect.
D. “Reasonable Identification” under § 3 — 501(b)(2)(ii) and “Dishonor” under § 3-502
We now turn to the issue of whether the Bank’s refusal to accept the check as presented constituted dishonor under § 3-501 and § 3-502 as Petitioner contends. Petitioner’s argument that Bank of America dishonored the check under § 3-502(d) fails because that section applies to dishonor of an accepted draft. We have determined, supra, that Bank of America never accepted the draft. Nevertheless, the question remains as to whether Bank of America dishonored the draft under § 3 — 502(b), which states:
(b) Dishonor of an unaccepted draft other than a documentary draft is governed by the following rules:
(1) If a check is duly presented for payment to the payor bank otherwise than for immediate payment over the counter, the check is dishonored if the payor bank makes timely return of the check or sends timely notice of dishonor or nonpayment under § 4-301 or § 4-302, or becomes accountable for the amount of the check under 4-302.
(2) If a draft is payable on demand and paragraph (1) does not apply, the draft is dishonored if presentment for payment is duly made to the drawee and the draft is not paid on the day of presentment.
The reason that § 3 — 502(b)(2) potentially is relevant to the case sub judice is because of § 3 — 501(b)(2) and (3), which state:
(2) Upon demand of the person to whom presentment is made, the person making presentment must (i) exhibit the instrument, (ii) give reasonable identification and, if presentment is made on behalf of another person reasonable evidence of authority to do so, and (iii) sign a receipt on the*697 instrument for any payment made or surrender the instrument if full payment is made.
(3) Without dishonoring the instrument, the party to whom presentment is made may (i) return the instrument for lack of a necessary indorsement, or (ii) refuse payment or acceptance for failure of the presentment to comply with the terms of the instrument, an agreement of the parties, or other applicable law or rule.
The question is whether requiring a thumbprint constitutes a request for “reasonable identification” under § 3 — 501 (b)(2)(ii). If it is “reasonable,” then under § 3-501(b)(3)(ii) the refusal of the Bank to accept the check from Petitioner did not constitute dishonor. If, however, requiring a thumbprint is not “reasonable” under § 3 — 501 (b)(2)(ii), then the refusal to accept the check may constitute dishonor under § 3 — 502(b)(2). The issue of dishonor is arguably relevant because Petitioner has no cause of action against any party, including the drawer, until the check is dishonored.
Respondent Bank of America argues that its relationship with its customer is contractual, University Nat’l Bank v. Wolfe, 279 Md. 512, 514, 369 A.2d 570, 571 (1977); Kiley v. First Nat’l Bank of Maryland, 102 Md.App. 317, 326-27, 649 A.2d 1145, 1149 (1994), and that in this case, its contract with its customer, the drawer, authorizes the Bank’s use of the Thumbprint Signature Program as a reasonable form of identification. The pertinent part of that Deposit Agreement states:
You [customer] agree that we [Bank of America] may impose additional requirements we deem necessary or desirable on a payee or other holder who presents for cashing an*698 item drawn on your account which is otherwise properly payable and if that person fails or refuses to satisfy such requirements, our refusal to cash the item will not be considered wrongful. You [customer] agree that, subject to applicable law, such requirements may include (but are not necessarily limited to) physical ... identification requirements ....
According to Respondent, this contractual agreement allowed it to refuse to accept the check, without dishonoring it pursuant to § 3 — 501(b)(3)(ii), because the Bank’s refusal was based upon the presentment failing to comply with “an agreement of the parties.” The intermediate appellate court agreed. Messing, 143 Md.App. at 19-20, 792 A.2d at 323. We, however, do not.
The reason why the Bank’s contract with its customer is not controlling on the issue of the reasonableness of requiring a thumbprint as identification is because the terms of § 3-501 are not modified by the terms of that contract. The terms of § 3-501 (b) require an “agreement of the parties.” The term “parties” does not refer to the parties of the Deposit Agreement, but rather, a