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Full-Text Articles in Law
Considering Sanctions Compliance In Light Of Ucc 4a, Michael Zytnick, Alaina Gimbert
Considering Sanctions Compliance In Light Of Ucc 4a, Michael Zytnick, Alaina Gimbert
Michigan Business & Entrepreneurial Law Review
As part of a bank’s financial crime compliance program, it is increasingly common to screen and halt the processing of a payment order for compliance investigation where reference is made to a potential, but unconfirmed, target of United States economic sanctions. This essay discusses challenges under Article 4A of the Uniform Commercial Code concerning the timing of such an investigation and the creation of potential liability where a bank wrongly accepts by execution a previously halted payment order received from a sender following five funds transfer business days after the relevant execution date or payment date of that order. In …
Against Balancing: Revisiting The Use/Regulation Distinction To Reform Liability And Compensation Under Investment Treaties, Jonathan Bonnitcha, Emma Aisbett
Against Balancing: Revisiting The Use/Regulation Distinction To Reform Liability And Compensation Under Investment Treaties, Jonathan Bonnitcha, Emma Aisbett
Michigan Journal of International Law
Investment treaties generate mutual benefits for host states and foreign investors to the extent that they discipline opportunistic conduct by host states. Investment treaties do not necessarily generate mutual benefits insofar as they constrain states’ ability to respond to new information or to change their policy priorities. In a companion paper, we use the tools of law and economics to formalize and clarify the relationship between problems of opportunism on the one hand, and new information and shifts in policy priorities on the other. On this basis, we develop a proposal to reform the legal principles that govern liability and …
Private Equity & Private Suits: Using 10b-5 Antifraud Suits To Discipline A Transforming Industry, Kenneth J. Black
Private Equity & Private Suits: Using 10b-5 Antifraud Suits To Discipline A Transforming Industry, Kenneth J. Black
Michigan Business & Entrepreneurial Law Review
This note demonstrates why private equity will no longer be able to avoid private investor suits as it has (mostly) done in the past and explores the industry’s response to a growing number of investor suits. Notably, the industry has already begun to shift its strategy from regulatory avoidance to regulatory capture, at least in part to avoid investor suits. Given these changes, this note proposes that the best way to maintain discipline in the transforming private equity market is to protect the ability of investors to bring private suits.
In Search Of Justice: Increasing The Risk Of Business With State Sponsors Of Terror, Gabriel C. Lajeunesse
In Search Of Justice: Increasing The Risk Of Business With State Sponsors Of Terror, Gabriel C. Lajeunesse
Michigan Law Review First Impressions
If the aims of tort law are deterrence, compensation, and provision of equitable distribution of risks, U.S. anti-terrorism laws have been margin-ally effective at best. Though Congress has passed legislation providing causes of action to U.S. victims of terrorism, compensation of victims is often difficult and terrorists are rarely deterred. Attempts to provide such recourse include the Antiterrorism Act of 1991 ("ATA"), the Antiterrorism and Effective Death Penalty Act of 1996 ("AEDPA"), and the Flatow Amendment to the Foreign Sovereign Immunities Act ("FSIA"). These attempts, however, are not enough.
Comparative Negligence Under The Code: Protecting Negligent Banks Against Negligent Customers, Julianna J. Zekan
Comparative Negligence Under The Code: Protecting Negligent Banks Against Negligent Customers, Julianna J. Zekan
University of Michigan Journal of Law Reform
This Article will examine modern banking practices with respect to processing checks and the effect of technology on liability for forged or altered checks. Part I describes the magnetic ink character-recognition system. Part II discusses check truncation. Part III recounts the evolution of contract and tort theories of liability from traditional to modern bank practices. Part IV analyzes the new comparative negligence provisions. Part V investigates the standards of ordinary care. Part VI evaluates the respective duties of the banks and their customers in light of the provisions that reflect the banking industry's transformation from the Paper Age to the …
The Liability Of Officers And Directors Under The Financial Institutions Reform, Recovery And Enforcement Act Of 1989, Jon Shepherd
The Liability Of Officers And Directors Under The Financial Institutions Reform, Recovery And Enforcement Act Of 1989, Jon Shepherd
Michigan Law Review
This Note argues that FIRREA's gross negligence standard implements a minimum federal requirement that preempts state law only to the extent state law provides a more relaxed criterion. Part I examines the plain meaning of the statute and concludes that FIRREA preempts state law only to the extent the state law standard of care is lower than gross negligence. Part II scrutinizes FIRREA's legislative history and demonstrates that Congress did not intend to prevent states from imposing more stringent standards of liability. Part III analyzes the policies behind FIRREA and argues that the statute's purposes are best served by allowing …
Travelers Checks, James J. White
Travelers Checks, James J. White
Articles
A. Travelers Checks Defined 1. Courts have variously described travelers checks as certificates of deposit, negotiable instruments, securities, cash, and cashier's checks. 2. The most persuasive analysis seems to treat travelers checks as cashier's checks on which the issuer is both the drawer and the drawee, the purchaser once he has countersigned is the payee, and both the purchaser and the next recipient are indorsers.
Checks Lost In The Collection Process, James J. White
Checks Lost In The Collection Process, James J. White
Other Publications
Given the millions of checks that are transferred among banks every year, the opportunity for loss and misplacement of such checks is enormous and the liabilities associated with such loss can be significant. This section deals with the collecting bank's liability for the check's loss before it is delivered to payer bank. If the payer bank receives and then loses the check, it will be subject to a different set of liabilities; those liabilities will be discussed elsewhere in the program.
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 …
Corporations - Liabilites - Inadequate Capitalization As Ground For Disregarding Corporate Entity, Lewis L. Clum
Corporations - Liabilites - Inadequate Capitalization As Ground For Disregarding Corporate Entity, Lewis L. Clum
Michigan Law Review
Defendant Resnick, meeting minimum statutory incorporation requirements, organized a corporation and thereafter persuaded defendants Cowan to join him in operating a used car enterprise under the corporate name. No stock was issued, nor capital paid in, although a checking account was opened for use by the business. Car purchases were financed through loans made or guaranteed by the elder Cowan, who held title until resale. Proceeds from resale transactions were deposited in the checking account, from which defendant Resnick reimbursed Cowan for money advanced. Sales volume averaged from $100,000 to $150,000 monthly. Assured that the elder Cowan was "backing" the …
Corporations - Shareholders - Majority Liability For Improper Stock Redemption By Corporation And For Misrepresentations In Private Stock Purchases From Minority Holders, James M. Tobin
Michigan Law Review
In 1942 a seemingly innocuous suit was brought against the Axton-Fisher Tobacco Corporation to determine the propriety of the alteration of a stock redemption. In 1955 Judge Leahy of the Federal District Court for Delaware handed down an opinion on the damages and relief to be given in the case in what he hopefully termed was the final phase of this famous litigation. It is the purpose of this comment to appraise the basis of the recovery allowed by Judge Leahy. Two readily distinguishable problems will be treated: (1) the nature of relief from a stock redemption called by fiduciaries …
Gifts--Banking--Gift Of Joint Savings Bank Deposits, Ira M. Price, Ii
Gifts--Banking--Gift Of Joint Savings Bank Deposits, Ira M. Price, Ii
Michigan Law Review
A, the mother of B, transferred three savings bank deposits from her sole account to the account of "A or B-either or survivor." Two of the depositors' signature cards contained this language: ''We hereby certify that this account and all moneys to be credited to it belong to us as joint tenants, and will be the absolute property of the survivor of us." There was evidence that one of the reasons for A's transferring her deposits to the joint account was to enable B to draw money therefrom for A while A was in the …
Banks And Banking-Night Depository-Relation Created Between Bank And Depositor, Irving Slifkin
Banks And Banking-Night Depository-Relation Created Between Bank And Depositor, Irving Slifkin
Michigan Law Review
By payment of a nominal charge, the plaintiff became entitled to use the night depository service offered to its customers by the defendant bank. On Christmas day, 1942, plaintiff made use of this service by depositing some currency, coins, and a check which were placed in a canvas bag supplied by the defendant bank for this purpose. Plaintiff never received credit for this deposit. Defendant bank was unable to find the bag which the plaintiff had deposited, and plaintiff sued to recover the value of its contents, obtaining a judgment in the trial court. Defendant bank appealed. Held, judgment …
Bills And Notes-Assent By Indorser To Release Of Maker As Undertaking By Former To Continue Liable-Section 120, N.I.L., Bruce L. Moore
Bills And Notes-Assent By Indorser To Release Of Maker As Undertaking By Former To Continue Liable-Section 120, N.I.L., Bruce L. Moore
Michigan Law Review
The indorser on the note in suit gave his assent to the holder's release of the insolvent maker in return for a deed to certain real estate given by the maker. In reply to demands of the holder for the balance remaining due after sale of the real estate, the indorser stated he would pay the note, but asked for time. On failure of the indorser to pay, this suit was brought. Held, for the plaintiff. Consent of the indorser to release of the maker is not equivalent to an express reservation of rights as required by section 120(5) …
Auditing Standards And Procedures In The Light Of Court Decisions, Frederick K. Rabel
Auditing Standards And Procedures In The Light Of Court Decisions, Frederick K. Rabel
Michigan Law Review
Ever since the Securities and Exchange Commission announced its amended rule 2-02 and required the accountant's certificate to include a statement as to compliance with generally accepted auditing standards, the accounting profession has been confronted with the problem of how to state those heretofore undefined standards. In the meantime, the committee on auditing procedure of the American Institute of Accountants requested the assistance of all practicing certified public accountants and all state accounting societies in taking prompt action toward defining auditing standards, and two members of the profession have since gone on record by courageously submitting tentative lists of proposed …
Principal And Surety- Right Of Surety On Building Contract To Be Subrogated To Funds In Owner's Hands As Against Right Of Bank That Advanced Funds To Contractor, Mary Jane Morris
Principal And Surety- Right Of Surety On Building Contract To Be Subrogated To Funds In Owner's Hands As Against Right Of Bank That Advanced Funds To Contractor, Mary Jane Morris
Michigan Law Review
A contract for construction of a city sewerage system provided for progress payments on the fifteenth of each month of ninety per cent of the engineer's estimate of work done during the preceeding month, ten per cent being retained by the owner until final completion of the contract. The contract also required the contractor by the twentieth of the month to pay all labor costs and ninety per cent of the cost of materials delivered the month before. Because the necessary estimates had not been made, the June check was not paid to the contractor on the payment date. On …
Bills And Notes - Accommodation Paper - Defenses Which Can Be Asserted Dy Maker Against One Not A Holder In Due Course, Robert A. Solomon
Bills And Notes - Accommodation Paper - Defenses Which Can Be Asserted Dy Maker Against One Not A Holder In Due Course, Robert A. Solomon
Michigan Law Review
The defendant, at the request of her husband, signed a blank promissory note. After making the note payable to himself, the husband discounted the note before maturity at the plaintiff bank. In an action by the bank against the wife, the accommodation maker claimed that the bank took in bad faith and that the negotiation to the bank was a diversion from the intended purpose of the accommodation. The plaintiff bank sought to recover upon the ground that the defendant was liable to it as a holder for value irrespective of whether it was a holder in due course. Held …
Contracts - Assignments - Sufficiency Of Notice To A Bank Of The Assignment Of An Account, Michigan Law Review
Contracts - Assignments - Sufficiency Of Notice To A Bank Of The Assignment Of An Account, Michigan Law Review
Michigan Law Review
On March 25, 1933 an account in D Bank was assigned to P. A week later the bank received from P a formal statement of the assignment, which the bank totally ignored for nine months. In the meantime the bank debited the account for the price of thirty shares of its stock which the depositor-assignor bought in October. On January 2, 1934, D Bank acknowledged receipt of the letter of notice, but denied any liability to P thereunder. In a suit brought by P for the account, the only question was the right of D Bank to take the …
Principal And Surety - Duty Of Obligee To Disclose To Surety - Surety's Right Of Subrogation, Julian Caplan
Principal And Surety - Duty Of Obligee To Disclose To Surety - Surety's Right Of Subrogation, Julian Caplan
Michigan Law Review
Surety defended an action on the bond of the town treasurer on the ground that at the time the bond was entered into the treasurer, in violation of statute, had deposited in a local bank an amount exceeding thirty per cent of the total deposits of the bank and that the town selectmen, although well aware of the situation, failed to disclose the facts to the surety. Plaintiff contended that there was no duty to disclose these facts to the surety, especially since the treasurer's annual report showed that the amount of the deposits exceeded the legal limit. As an …
Bills And Notes - Qualified Indorsement - By Assignment Of "Right, Title And Interest'', Michigan Law Review
Bills And Notes - Qualified Indorsement - By Assignment Of "Right, Title And Interest'', Michigan Law Review
Michigan Law Review
Defendant, payee of a promissory note, transferred it by writing on the back, "For value received, I hereby assign all my rights, title and interest to the within note .... " Held, defendant's indorsement was qualified, and she was not liable for its payment. Fecko v. Tarczynski,. 281 Mich. 590,275 N. W. 502 (1937).
Trusts - When Is The Beneficiary Of A Trust A Necessary Party In A Proceeding Involving The Trust Estate, Charles William Allen
Trusts - When Is The Beneficiary Of A Trust A Necessary Party In A Proceeding Involving The Trust Estate, Charles William Allen
Michigan Law Review
Two recent cases present the problem of the power of the trustee to represent the beneficiary in proceedings involving the trust estate. In Hood v. Cannon, arising in South Carolina, the trustee of an estate, upon merger of A bank into B bank, had applied to the probate court for permission to exchange A bank stock, held by the estate, for B bank stock. The court authorized the exchange in an ex parte proceeding to which the beneficiaries were not parties. B bank later failed, and the commissioner of banks brought suit against the defendant, the successor trustee, to …
Unforgetable Knowledge, Maurice H. Merrill
Unforgetable Knowledge, Maurice H. Merrill
Michigan Law Review
In another article, the writer had occasion to analyze the concept of notice. He there called attention to the fact that in some instances the existence of notice depends upon awareness by the person to be charged, either of the ultimate facts or of circumstances placing him upon inquiry thereof, while in other cases notice exists entirely independent of such awareness. To characterize notice of the first class he suggested the term "cognitive notice," applying to the latter the designation "absolute notice."
Banks And Banking - Collections -"Cash Or Solvent Credits"
Banks And Banking - Collections -"Cash Or Solvent Credits"
Michigan Law Review
The plaintiff drew an out of town draft and deposited it with the A bank for collection. The A bank sent the draft to its correspondent, B bank, to collect and make return when actually paid. The B bank collected the amount of the draft and, according to a custom between the two institutions, credited the account of the A bank and sent them a notice of collection. On the very day this notice was received the B bank closed its doors. A statute provided that items deposited for collection should be credited subject to final payment in cash or …
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 …
Bills And Notes-Warranty Of Qualified Indorser -When Instrument "Valueless"
Bills And Notes-Warranty Of Qualified Indorser -When Instrument "Valueless"
Michigan Law Review
In an action based upon the vendor's warranty in the sale of a note as set forth in the N.I.L., sec. 65 (4), it being alleged that the maker was insolvent and the mortgaged property worth much less than the debt at the time of the transfer of the note and that both such facts were known to the transferor, held, a ruling sustaining a demurrer should be affirmed. Leekley v. Short, (Iowa 1933) 249 N. W. 363.
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 …
Bills And Notes - Rights Of Holder Of Bill Against Drawee
Bills And Notes - Rights Of Holder Of Bill Against Drawee
Michigan Law Review
An employee of the plaintiff, payee of a check drawn on the defendant bank, indorsed the check without authority and cashed it, retaining the proceeds. The check was sent through the clearance to the defendant bank and charged to the drawer. The plaintiff brought suit against the bank by a complaint in the form of damages for the conversion of a check. It was adjudged for the plaintiff and the defendant appealed. On appeal, the plaintiff insisted that the payment of the check amounted to an acceptance by the defendant bank and that a liability to the plaintiff as payee …
Bills And Notes - What Constitutes A Reasonable Time In Presenting A Check For Payment
Bills And Notes - What Constitutes A Reasonable Time In Presenting A Check For Payment
Michigan Law Review
Defendant delivered to the plaintiff, at about 10 o'clock A. M., a check drawn on the B bank. The next morning at 10:30 o'clock the plaintiff's agent went to drawee to cash the check. As there was "a run" being made on the bank that day, the agent was forced to stand in line. After waiting from 10:30 o'clock in the morning to 1 o'clock in the afternoon, he left without cashing the check. The next day the bank failed to open its doors. In an action by the plaintiff to recover the debt covered by the check, the defendant …
Bills And Notes - Waiver Of Presentment And Notice Of Dishonor
Bills And Notes - Waiver Of Presentment And Notice Of Dishonor
Michigan Law Review
The defendant was an accommodation indorser on a demand note without interest. Almost three years after date of the note the holder notified defendant that repeated attempts had been made to secure payment from the maker, but without avail, and that the defendant was expected to pay. This resulted in a conversation between holder and defendant in which defendant indicated that it was not convenient for him to pay the note, and some discussion occurred as to the defendant's giving collateral security and an effort on his part to get some protection from the maker, the holder allowing the note …