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Articles 1 - 28 of 28
Full-Text Articles in Law
Banks And Banking -- Stop-Payment Orders Releasing Bank From Liability For "Inadvertent" Payment
Banks And Banking -- Stop-Payment Orders Releasing Bank From Liability For "Inadvertent" Payment
Michigan Law Review
In an action by a depositor against his bank for money paid out on a check in violation of a stop-payment order, the bank interposed the defense that the terms of the order excused it if it should pay through "inadvertence or accident," and that the check was so paid. It was held that the bank was not liable. Hodnick v. Fidelity Trust Co., (Ind. App. 1932) 183 N. E. 488.
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.
Bank Reorganization And Recapitalization In Michigan, Ellis B. Merry
Bank Reorganization And Recapitalization In Michigan, Ellis B. Merry
Michigan Law Review
On January 2, 1933, 420 state and 68 national banks were operating in Michigan. On February 13, the Governor of Michigan proclaimed a banking holiday for eight days which was extended in effect on February 22. On March 4, the President proclaimed a national banking holiday until March 9. Under the provisions of the President's proclamation lifting the national banking holiday, 198 state and approximately 30 national banks were reopened by the appropriate authorities as "sound" banks. State bank conservators assumed the management and custody of 215 state banks which did not open, on appointment by the Commissioner of the …
Constitutional Law - Bank Reorganization Legislation - Composition With Depositors And Other Creditors, Maurice S. Culp
Constitutional Law - Bank Reorganization Legislation - Composition With Depositors And Other Creditors, Maurice S. Culp
Michigan Law Review
Twenty States and the federal government now have laws permitting the reorganization and reopening of insolvent or failing banks. The usual statute provides for the reorganization of a bank upon some plan approved by a large majority of the general creditors of the institution; the plan must also have the approval of state banking officials and of a court of general jurisdiction, although the last is by no means a universal requirement. The reorganization, when approved, becomes binding upon all depositors and general creditors of the bank regardless of consent. By the terms of a few statutes, non-assenting creditors are …
Bills And Notes-Bonds Payable At Office Of Trustee Which Becomes Insolvent After Due Date But Before Bonds Presented, Ralph W. Aigler
Bills And Notes-Bonds Payable At Office Of Trustee Which Becomes Insolvent After Due Date But Before Bonds Presented, Ralph W. Aigler
Michigan Law Review
In Morley v. University of Detroit, decided May 16, 1933, the Supreme Court of Michigan reaches a conclusion not only of intense interest as a matter of legal doctrine, but also tremendously important, if followed, in determining the location of losses that may run into large sums. The defendant had floated a large bond issue secured by trust mortgage to a Trust Company. Among the obligor's undertakings in the mortgage was one to the effect that it would punctually pay the principal and interest of every bond according to the terms of the bond and coupons and would "deposit …
Banks And Banking - Liability Of Bank For Paying Check After "Stop-Payment Order"
Banks And Banking - Liability Of Bank For Paying Check After "Stop-Payment Order"
Michigan Law Review
The plaintiff drew a check on the defendant bank in which he had deposited sufficient funds to meet his order. Before the check was presented, the plaintiff telephoned the defendant bank to stop payment. He described the check as to payee, date, number and amount and in the course of his conversation informed the bank employee that he was "Shude, from the Anchor Steel Co." The countermanding order was applied to the account of the Anchor Steel Co. and plaintiff's check was payed. Held, plaintiff should recover. Shude v. American State Bank, 263 Mich. 519, 248 N. W. …
Banks And Banking-Liability Of Drawee Bank For Payment On Forged Indorsement
Banks And Banking-Liability Of Drawee Bank For Payment On Forged Indorsement
Michigan Law Review
Plaintiff's depositor gave to A a check, payable to A and B, in return for a chattel mortgage and a note, both signed by A and B. The check was indorsed and presented to the defendant bank for collection. The plaintiff paid the check, debiting the drawer's account. Two years later, when the note came due, it was found that B's name had been forged to the note, the mortgage, and the check. Plaintiff then credited its depositor's account with the amount of the check, and now seeks to recover from the defendant. The court held that …
Bills And Notes - Forged Indorsement - Liability Of Collecting Bank To Drawer
Bills And Notes - Forged Indorsement - Liability Of Collecting Bank To Drawer
Michigan Law Review
Plaintiff drew a check payable to V. It was stolen by H, plaintiff's employee, and delivered to a confederate who forged V's indorsement and deposited the check in the defendant bank which collected on the instrument. Plaintiff was reimbursed by H's bonding company, and then sought to recover the amount of the check from the defendant. Held, that though plaintiff could ordinarily recover the proceeds of its stolen, undelivered check from the collecting bank, recovery here would be denied because plaintiff had already been reimbursed for its loss. Washington Mechanics' Savings Bank v. District Title …
Banks And Banking -Trust Funds - Deposits For A Special Purpose
Banks And Banking -Trust Funds - Deposits For A Special Purpose
Michigan Law Review
Plaintiff had an arrangement with defendant bank whereby receipts of certain of plaintiff's branch stores were to be deposited daily with defendant, and the latter was to transmit each day by draft to a bank in Pittsburgh for plaintiff's credit all sums in excess of a dormant balance of $2,000. Drafts covering two days' deposits were in process of transmission to the Pittsburgh bank when defendant bank was taken over by the Comptroller of the Currency. The deposits represented by these drafts were made at a time when defendant's officers and directors knew the bank to be insolvent, though negotiations …
Banks And Banking - Land Contract As Item For Collection Under The Bank Collection Code
Banks And Banking - Land Contract As Item For Collection Under The Bank Collection Code
Michigan Law Review
The petitioner deposited with A Bank a land contract. The bank was to collect payments thereon and remit them to the petitioner. After making two collections amounting to $100, the bank became insolvent and the petitioner sought a preferred claim against all the assets of the bank. The Bank Collection Code (sec. 13 of Act No. 240 of the Public Acts of Michigan, 1931) was the basis of his claim. The trial judge allowed him a preference as to cash assets on hand at the time the receiver took possession. Since it was doubtful whether there would be any cash …
Bills And Notes - Due Presentment Of Checks When Drawee Is In Same Town
Bills And Notes - Due Presentment Of Checks When Drawee Is In Same Town
Michigan Law Review
The plaintiff, payee of a check, received it on December 1st early enough to present it for payment on that day to the drawee bank which was located in the same town. Instead of presenting it to the drawee directly, he deposited the item in another local bank on December 2d. The latter presented it to the drawee through the clearing house on December 3d, but it was not paid, the drawee having closed its doors the same day. If the check had been presented on December 2d it would have been paid, since there were enough funds in the …
Banks And Banking - Power To Pledge Assets To Secure Private Depositors
Banks And Banking - Power To Pledge Assets To Secure Private Depositors
Michigan Law Review
Plaintiff railway company deposited funds in the national bank of the defendant receiver. Dissatisfied with the guaranty of his deposits by surety bonds, the plaintiff demanded and received from the bank Liberty Loan Bonds, which were deposited with the trust officer of the bank to be held as security for the repayment, on demand, of the deposits. On the insolvency of the bank, the receiver refused to turn over the bonds, whereupon the plaintiff brought an action on the contract of pledge. Held, that the contract of pledge of the bank's assets to secure the private deposit was invalid …
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 -- Non-Negotiable Because Of Reference To Trust Agreement
Bills And Notes -- Non-Negotiable Because Of Reference To Trust Agreement
Michigan Law Review
Whether certain purchasers of notes occupied a better position than the ones from whom they purchased depended upon whether the notes in question were negotiable. Each note contained the following clause: "This note is one of a duly authorized issue of notes . . . issued under and all legally entitled to the benefit of a trust indenture. . . . For a description of the rights of the holders of the notes and the terms and conditions upon which the notes are issued, reference is made to said Trust Indenture with like effect as though said Trust Indenture were …
Bills And Notes-Acceleration Clause Affecting Negotiability
Bills And Notes-Acceleration Clause Affecting Negotiability
Michigan Law Review
A promissory note maturing by its terms ninety days after date contained a provision authorizing the payees to declare the note due "at any time they may deem this note insecure, even before the maturity of the same." In an action against indorsers, it was held that the note was rendered non-negotiable by the acceleration provision. Guio v. Lutes, (Ind. App. 1933) 184 N. E. 416.
Bills And Notes - Negotiable Despite Reference To Trust Agreement
Bills And Notes - Negotiable Despite Reference To Trust Agreement
Michigan Law Review
In an action of replevin for the recovery of stolen debenture bonds, the defense relied upon the contention that the bonds were negotiable and that they had been bought by an innocent purchaser. The bonds in terms referred to a trust agreement "for a statement of the terms under which the said debentures are issued, and the rights. and obligations of the company, of the trustee and of the respective holders of the said debentures under the said trust agreement." It was further provided in the bonds that "to the extent provided in the said trust agreement all rights of …
Subrogation -An Equitable Device For Achieving Preferences And Priorities
Subrogation -An Equitable Device For Achieving Preferences And Priorities
Michigan Law Review
Courts are seldom embarrassed in modern times by the poverty of their resources. On the contrary, with the multiplication of "substantive law" formulae and of new procedural devices, their difficulties more often result from the embarrassment of overwhelming riches. This statement may be best illustrated by a brief review of the equitable devices for achieving preferences and priorities, which have developed so rapidly within the last fifty years and have surmounted almost completely the artificial barriers of legal doctrine. In this field the chief effort of the courts must now be not to develop new machinery, but to reexamine the …
Banks And Banking-Set -- Off -- Deposits In Fiduciary Capacity
Banks And Banking-Set -- Off -- Deposits In Fiduciary Capacity
Michigan Law Review
Plaintiff, receiver for an insolvent national bank, sued to recover money deposited in defendant bank. The defendant sought to set off a deposit as trustee in the insolvent bank. Held, the set-off would be improper. The claims are not mutual. A claim in a fiduciary' capacity cannot be set off against an individual debt. Thomas v. Potter Title & Trust Co., (D. C. W. D. Pa. 1932) 2 Fed. Supp. 12.
Banks And Banking - Changing Character Of Deposit To Establish Trust
Banks And Banking - Changing Character Of Deposit To Establish Trust
Michigan Law Review
Respondent had a savings account with a local bank and, having arranged that the bank should purchase certain bonds for him, made an additional deposit therein. Four days later respondent was informed by an officer of the bank that the bonds had been purchased and was given a slip noting that his account had been charged with an amount equal to the purchase price. On its own books the bank charged the respondent's savings account with that amount and entered it as a "deposit" in its "bond account." Upon the insolvency of the bank it was found that no bonds …
Banks And Banking - Holder Of Draft Paid For By Check On Issuing Bank As Preferred Upon Drawer's Insolvency
Michigan Law Review
A depositor received from his bank in exchange for his check a New York draft drawn by the bank payable to a third person. The draft was dishonored because of the insolvency and closing of drawer. After redemption of the draft the depositor sought to establish a preferred claim therefor against the bank's assets. An Ohio statute declared that when there remains unpaid at the time the bank is closed a check drawn by a depositor which has been presented to the drawee bank "for collection and payment," charged to the depositor's account, and a draft issued in payment thereof, …
Banks And Banking - Deposit Of Trust Funds In Individual Account Of Trustee - Liability Of Depositary
Michigan Law Review
Committee for an incompetent was directed, by the court order appointing him, to deposit in X bank all funds which might come into his possession. In violation of this order he deposited checks payable to himself as committee in his individual account in the defendant bank. Plaintiff, as substituted committee, sued the depositary for alleged diversions by the original committee, on the theory that the defendant aided the diversions by accepting the deposit of trust funds in the individual account of the committee. Held, under the rule of Bischoff v. Yorkville Bank defendant bank is not liable for the …
Banks And Banking - Right To Recover For Benefits Conferred Under An Illegal Contract
Banks And Banking - Right To Recover For Benefits Conferred Under An Illegal Contract
Michigan Law Review
The Rowena State Bank, a corporation organized under the laws of South Dakota, borrowed a sum of money from the plaintiff who was the president of the bank. A state statute provided : "In all cases where money is borrowed, a bank shall issue its 'Bills Payable' and shall show the true amount of borrowed money on its books." The bank failed to comply with this statute. A short time later the defendant as superintendent of banks took charge of this bank. The plaintiff brought an action to recover upon a quantum meruit for the money loaned. Held, that …
Confusion Of Goods - Gold Seized During Russian Revolution
Confusion Of Goods - Gold Seized During Russian Revolution
Michigan Law Review
Plaintiff in 1915-16 purchased from Russian banks $10,000,000 in alloy gold ingots, about 78% fine. These were entrusted to the Russian State Bank at Petrograd, deliverable on demand to the plaintiff after the war. In 1928 the State Bank of the Union of Soviet Socialist Republics sent a shipment of refined gold ingots, 98% fine, to the defendant bank for deposit. The plaintiff seeks to replevin these ingots, alleging that their ingots in Petrograd were seized by the Bolsheviki during the revolution in 1917-18 and by them transported to Moscow, commingled with other gold, and then refined into ingots of …
Banks And Banking -Trust Companies - Deposit Of Trust Funds By Corporate Trustee In Own Banking Department
Michigan Law Review
The appearance of the corporate fiduciary, the trust company, in the modern banking and business world has, because of its peculiar composite structure, been attended by some confusion in the application to it of certain rules designed for the administration of trusts by private persons as trustees. The trust company maintains a department which acts as trustee, executor under wills, and in such other capacities as a natural fiduciary might assume; and in addition there usually exists, within the same corporate structure, a commercial and savings banking business. Each of these departments is capable of dealing with the other as …
Trust Receipts
Michigan Law Review
That the conflict between the convenience of business and the rigidity of the law continually brings about modifications and expansions of legal doctrine is nowhere better illustrated than in the field of commercial financing. A merchant wishes to purchase goods; he has no funds or available unencumbered property for security; his general credit is too poor to warrant either the manufacturer or a bank in making advances without security. How can the manufacturer give the merchant possession and power of sale of the goods and yet retain a legal hold on them or their proceeds as security for the payment …
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-Liability Of An Acceptor On An Altered Instrument
Bills And Notes-Liability Of An Acceptor On An Altered Instrument
Michigan Law Review
Section 62 of the N. I. L. (Uniform Negotiable Instruments Law) provides: "The acceptor by accepting the instrument engages that he will pay it according to the tenor of his acceptance; and admits,-- (1) The existence of the drawer, the genuineness of his signature, and his capacity and authority to draw the instrument, and (2) The existence of the payee and his then capacity to indorse." A recent California case decided that by force of this section, a bank certifying and paying a check on which the payee's name had been changed could not recover the money from the holder …
Bills And Notes - Holders In Due Course - Notice To A Corporation
Bills And Notes - Holders In Due Course - Notice To A Corporation
Michigan Law Review
The plaintiff, as assignee of certain negotiable bonds, brought replevin to recover the same from the defendant who had acquired them as collateral on certain loans made to the thieves. The plaintiff proved that blanket notices of the theft had been sent to a number of banks, including the defendant bank, before the bonds were accepted as collateral, thereby raising a presumption that the notice was received by the mailing clerk of the bank. The officers of the defendant trust company denied having seen the notice or having knowledge of it at the time of the acceptance. Held, since …