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Full-Text Articles in Law
Allocation Of Loss Due To Fraudulent Wholesale Wire Transfers: Is There A Negligence Action Against A Beneficiary's Bank After Article 4a Of The Uniform Commercial Code?, Robert M. Lewis
Michigan Law Review
This Note argues that where a bank reasonably should have known of a fraud but still pays out a wire transfer to an unauthorized recipient, common law negligence should provide a basis for recovery despite the absence of an explicit Code provision imposing liability on the bank. Part I examines the UCC's language itself and analyzes possible cases, under 4A and under articles 3 and 4 by analogy, and discusses the applicability of these other parts of the UCC to wire transfers. Part II examines how extra-Code regulatory systems and the common law would determine wire transfer liability. Part II …
Banks And Banking-Bank's Liability For Breach Of Its Duty To Corporate Depositor-Maley V. East Side Bank Of Chicago, Michigan Law Review
Banks And Banking-Bank's Liability For Breach Of Its Duty To Corporate Depositor-Maley V. East Side Bank Of Chicago, Michigan Law Review
Michigan Law Review
The three stockholders of a close corporation contracted to sell all of the corporate stock to Shulman for $5,000 down and a balance of $17,000 in two notes payable in thirty days. A resolution filed with the defendant depositary bank provided that Paul, the former president, was to act as the interim treasurer for the corporation and was to cosign, with Shulman, all checks drawn on the corporate account until the balance of the purchase price was tendered. Approximately one week after the agreement was made, the bank received an inordinate number of inquiries regarding the credit of the corporation, …
Bills And Notes-Payees By Impersonation And By Assumption Of A Name-Drawer's Intent And Commercial Policy, Stuart S. Gunckel S. Ed.
Bills And Notes-Payees By Impersonation And By Assumption Of A Name-Drawer's Intent And Commercial Policy, Stuart S. Gunckel S. Ed.
Michigan Law Review
Consider the following scheme for fraudulently obtaining money: A, a stranger to D, personally appears before D, represents himself as B and requests a loan. There is an existing person named B. For D's security a mortgage is produced in the name of B, but it has actually been penned by A. A check of the land records by D verifies that the land described in the mortgage is in fact owned by B. D, having satisfied himself as to the existence of B, draws a check payable to the …
Bills And Notes - Rule Of Price V. Neal - Application To Nonnegotiable Instruments And Money Orders, Edward W. Adams
Bills And Notes - Rule Of Price V. Neal - Application To Nonnegotiable Instruments And Money Orders, Edward W. Adams
Michigan Law Review
From a Mississippi post office, B stole fifty-five postal money order blanks. Notice of the theft was sent by the Post Office Department to all post offices. B filled in twelve of the blanks, making them appear genuine in all respects, and presented them to be cashed at defendant bank. In reliance on a confirmation of the validity of the money orders, received by calling a branch post office, defendant cashed them, giving B cash and travelers checks and starting a bank account for the balance. Defendant presented the orders at the main post office, and they were paid without …
Banks And Banking - Payment Of Check After Revocation - Right Of Drawee To Recover From Presenter, James D. Ritchie
Banks And Banking - Payment Of Check After Revocation - Right Of Drawee To Recover From Presenter, James D. Ritchie
Michigan Law Review
Defendant drawee-bank, negligently disregarding a stop-payment order received from drawer on the previous day, paid a check to a collecting bank. Return of the money was immediately demanded, and the collecting bank thereupon refused to forward it to the next correspondent or to plaintiff payee. In this action by payee, the collecting bank interpleaded drawee bank. Held, that drawee may recover, for despite its negligence, the payee had not changed his position and would not be prejudiced by having to return the inadvertent payment. Foster v. Federal Reserve Bank of Philadelphia, (D. C. Pa. 1939) 29 F. Supp. …
Banks And Banking - Duty Of Depositor To Determine Status Of His Account, James D. Ritchie
Banks And Banking - Duty Of Depositor To Determine Status Of His Account, James D. Ritchie
Michigan Law Review
Plaintiff's bookkeeper, who, as defendant bank admittedly knew, had authority only to indorse and deposit commission checks to plaintiff's account, embezzled considerable money between 1926 and 1931 by taking some of the proceeds in cash or drafts. In the passbook and in defendant's own records only the net transactions, not the total amount of the checks, were recorded. Plaintiff discovered the fraud in 1936 and now sues the receiver five years after the bank closed. Held, that plaintiff, charged with constuctive knowledge of the fraud, which reasonable examination would have revealed, is guilty of negligence and therefore barred from …
Bankruptcy -Trustee's Liability - Effect Of Requirement Of Deposit In Designated Depositary On Trustee's Common Law Duty Of Due Care, Russel T. Walker
Bankruptcy -Trustee's Liability - Effect Of Requirement Of Deposit In Designated Depositary On Trustee's Common Law Duty Of Due Care, Russel T. Walker
Michigan Law Review
In a suit to charge a trustee in bankruptcy for the loss of funds of the bankrupt estate caused by insolvency of the depositary bank, the trustee contended that as he had fulfilled the requirement of section 61 of the Bankruptcy Act by depositing the funds of the estate in a "designated depositary," he could not be charged with liability for any loss occurring thereafter; he argued that section 61 repealed, by implication, the trustee's common-law duty of due care in the handling of estate funds after they were deposited in a "designated depositary." Held, the fact that the …
Banks And Banking-Liability On Payment Of Incomplete Check
Banks And Banking-Liability On Payment Of Incomplete Check
Michigan Law Review
Plaintiff's agent signed a check in blank, and placed it in a safe. A thief broke into the safe, removed the check and other papers, inserted "Cash'' as the payee and $486.50 as the amount, and was paid by the drawee bank. In an action against the bank for charging plaintiff's account with this item, the court held that as between the parties, because the bank was negligent in paying the check without sufficient identification, it must bear the loss. Joseph Heimberg, Inc. v. Lincoln Nat. Bank, (N. J. L. 1934) 172 Atl. 528.
Banks And Banking -- Relation Of Bank To Depositor Of Checks Unqualifiedly Indorsed -- Set-Off Against A Failing Correspondent Bank
Michigan Law Review
Checks drawn on the M bank of another city were deposited by the holders in the D bank pursuant to an agreement that "in receiving and handling items for deposit or collection . . . this bank acts only as depositor's collecting agent and assumes no responsibility beyond the exercise of due care. . . . It may decline to honor or pay checks drawn against conditional credits." The checks were unqualifiedly indorsed. The D bank credited each depositor's account and forwarded the checks to M bank which charged the accounts of the drawers and sent its draft to D …
Banks And Banking-Payment By Savings Bank To Other Than Depositor
Banks And Banking-Payment By Savings Bank To Other Than Depositor
Michigan Law Review
The plaintiff, depositor in a savings bank, sued the bank to recover for a payment made, upon presentation of the passbook together with a forged receipt, to one known to have previously acted as the depositor's agent. In order to protect itself in such a case the bank had provided the following bylaw: "The passbook shall be the voucher of the depositor, and the possession of the passbook shall be sufficient authority to the bank to warrant any deposit or payment made or entered therein." Held, the bank was liable to the depositor, despite the by-law, as it was …
Quasi-Contracts -- Sufficiency Of Technical Benefit
Quasi-Contracts -- Sufficiency Of Technical Benefit
Michigan Law Review
A brokerage house, the R. Co., having purchased stock on margin for the plaintiff, requested a payment of $1100 in order to protect themselves in carrying the account. Doubting the financial stability of R. Co. the plaintiff decided to transfer the account to another firm, the defendant, and accordingly delivered to R. Co. a personal check naming the defendant as payee, at the same time orally directing R. Co. to transfer the stock and check to the defendant and from them receive payment in full. R. Co., however, falsely represented that the check was really theirs and that the plaintiff …
Banks And Banking -Sending Items Directly For Collection - Liability For Accepting A Draft In Payment
Michigan Law Review
The plaintiff deposited two checks, drawn on the X bank, with the A bank, a member of the B Federal Reserve Bank. The A bank sent the items for collection directly to the defendant Federal Reserve Bank of Minneapolis, which forwarded them directly to the X bank. After marking the checks paid, the X bank remitted to the defendant its draft on the Y bank. The draft was dishonored because of the intervening insolvency of the X bank; and the checks were accordingly charged back by the defendant to the B bank ( of which the A bank was a …
Bills And Notes - Price V. Neal - Culpability Of Holder Which Permits Drawee Who Has Paid To Recover
Bills And Notes - Price V. Neal - Culpability Of Holder Which Permits Drawee Who Has Paid To Recover
Michigan Law Review
In an action by the bank to recover money paid on a check from the holder bank which had cashed the check for an unknown payee without requiring identification, and had then presented it to the drawee bank for payment, the drawer's name being forged, it was held that the drawee bank could recover, on the ground that the holder's negligence had lulled the drawee into indifference as to the drawer's signature when paying the check. Louisa Nat. Bank v. Kentucky Nat. Bank (Ky. 1931) 39 S.W. (2d) 497.
Mortgages-Foreclosure-Default In Interest
Mortgages-Foreclosure-Default In Interest
Michigan Law Review
Plaintiff was a mortgagee of certain real property. A clause in the mortgage provided that the whole amount should become due after default for twenty days in the payment of any installment of interest. Through an arithmetical error of its clerk, the defendant corporation, owner of the equity of redemption, paid $401.87 less than the amount of interest due on one installment. The total interest due was $4621.56. The clerk discovered the error and notified the mortgagee that it would be corrected as soon as the president of the corporation, who alone was authorized to sign checks, returned from Europe. …
Recent Important Decisions
Michigan Law Review
A collection of recent important court decisions.
Recent Important Decisions, Michigan Law Review
Recent Important Decisions, Michigan Law Review
Michigan Law Review
No abstract provided.
Recent Important Decisions, Michigan Law Review
Recent Important Decisions, Michigan Law Review
Michigan Law Review
Carriers of Passengers - Duty to Stop at Station to Permit Passenger to Alight-Contributory Negligence of Passenger Plaintiff's intestate was riding in the front end of a crowded vestibule car in the coach next to the tender of the eengine. When the train stopped at his station he tried to leave by the front end, but found the door from the vestibule closed. As he did not know how to open it, or was unwilling to be carried by his station, he stepped from his platform to the bumper of the tender and tried to follow it to the side …