Law Commons^™

Fraudulent Conveyances - Contingent Creditors - Bank Stockholders' Double Liability, Charles V. Beck Jr.

Michigan Law Review

A holder of bank stock conveyed real estate to her daughter in consideration of love and affection, leaving the grantor with no other assets than the bank stock. At the time, the bank stock had a market value of eleven dollars a share, and the bank was advertising for depositors; there was nothing in the record to indicate insolvency. About two years later the bank closed, and the superintendent of banks assessed the stockholders the amount of their statutory double liability. When the transfer was discovered the superintendent brought action to set aside the conveyance as fraudulent to the creditors …

Trusts - Constructive Trusts - Preferential Claim Against Bank's Assets For Deposits Made After Hopeless Insolvency, James W. Deer

Michigan Law Review

On proclamation by the governor of the so-called bank holiday, the Union Guardian Trust Company was closed as of February 11, 1933. The evidence showed that within nine months of closing the company had made provision for obtaining $2,500,000 by pledging assets, had received loans amounting to $12,000,000 from the Reconstruction Finance Corporation, and was conferring frequently with the officers of· that agency to negotiate an additional $44,000,000 loan. Under the authority of emergency legislation passed after the bank holiday, a conservator was appointed. By the plan of reorganization all the assets of the company were set aside in a …

Some Problems Arising Out Of Deposits To Pay Principal And Interest On Bonds, Paul P. Lipton

Michigan Law Review

Since Lawrence v. Fox contracts students have been puzzled by the numerous and varying relations that may arise when A, the debtor, delivers money to B to pay C, his creditor. Equally puzzling and much more complicated are the rights and relations of the obligor, trustee and bondholders with respect to sums deposited with the trustee to pay principal and interest on bonds.

The insolvency during recent years of many large trust companies that had been named as trustees in indentures securing corporate bonds, having on hand at the time of their failure large sums of money which …

Public Officers - Duties And Responsibilities Of Custodians Of Public Funds, Michigan Law Review

Michigan Law Review

The treasurer of a village, acting under the direction of the board of supervisors, deposited the village funds in a certain bank. The village treasurer was the managing officer of this bank. A public official's bond was given to cover his specific term beginning May 5, 1931, and ending May 5, 1932. The bond included a provision exempting the surety from liability for loss by reason of bank failure. A state statute spelled out the obligations of the principal and surety in an official bond without making provisions for any exemptions. At the close of the term of office on …

Vendor And Purchaser-Vendor's Release Of Sub-Assignee Held A Discharge Of All Prior Assignees, Robert M. Warren

Michigan Law Review

The bank for which plaintiff is receiver sold land on contract. There followed four successive assignments of the vendee's interest, in each of which the assignee expressly assumed the contract obligation. After the fourth assignment, default occurred as to payments and taxes, and plaintiff began negotiations to sell the property to an intermediate assignee, R. To effectuate this sale, plaintiff procured an assignment in blank from the fourth assignee, W, in consideration of a release of W from further liability on the contract. The negotiations with R having failed, plaintiff brought suit against the vendee and all the …

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. …

Pledges - Application Of Collateral To Other Debts, Michigan Law Review

Michigan Law Review

Plaintiff's testator, in 1922, before delivery indorsed a demand note of the corporation of which he was president, waiving presentment for payment, demand, protest, and notice of protest. In 1925, when he was no longer president, he similarly indorsed another note of the corporation. Defendant was payee on both of these notes, which were given for obligations of the corporation. In 1929, the testator executed to defendant a personal note for his own use, to secure which he pledged stock pursuant to a pledge agreement "for the payment of this and of any other liabilities of the undersigned to said …

Carriers - Collection Of Freight Charges - Liability Of Consignee Who Reconsigns Shipment, Michigan Law Review

Michigan Law Review

The original shipper consigned a shipment of melons, which was subsequently reconsigned to defendant, who in turn reconsigned the shipment to an Indiana firm over the lines of plaintiff railroad, stating in the diversion order "Protect the through rate. All charges to follow car." The Indiana firm accepted the shipment and paid freight charges with a check, which was dishonored on due presentment, the drawer having gone bankrupt. Held, plaintiff may recover freight charges for the whole trip from defendant. Pennsylvania R. R. v. Seiter, 61 Ohio App. 497, 22 N. E. (2d) 843 (1939).

Banks And Banking - Gifts -- Co-Tenancy -- Joint Accounts -- Statutes, Michigan Law Review

Michigan Law Review

Testator ordered his bank to transfer his account to a new account in the name of himself and his daughter "for either or survivor." After testator's death, suit was brought by his executor to compel discovery of $5,000 which had been withdrawn from the joint account by the daughter prior to the death of her father. The executor introduced evidence which tended to show that neither the testator nor his daughter contemplated that the daughter was to enjoy any interest in the account until her father's death. Held, that the daughter must pay to the executor the amount which …

Bills And Notes - Price V. Neal - Duty Of Presenter Bank To Make Inquiry, Oscar Freedenberg

Michigan Law Review

A stranger opened an account in the defendant bank and deposited therein several large checks (payable to himself) forged with the signature of the president of the plaintiff bank and drawn on the plaintiff. The checks were indorsed by the forger, and also by the defendant, the latter "guaranteeing prior indorsements." After payment by the plaintiff, the amounts were credited to the forger's account and soon thereafter withdrawn. The plaintiff alleged a local banking custom which required careful watching of new accounts and which the defendant failed to observe. On demurrer to the plaintiff's petition, held, that the rule …

Banks And Banking - Liability Of Bank Upon Payment Of The Check Of An Insane Depositor Without Notice Of The Insanity, William L. Howland

Michigan Law Review

The plaintiff, as trustee for a depositor, sought in this action to charge the defendant bank with the amount of a check drawn by the depositor while insane. On the ground that the depositor was an inmate of the state hospital for the insane, the plaintiff had been appointed his trustee. Subsequent to this appointment, the depositor drew the check in question, and the defendant paid the amount of the check to the payee. Held, in the absence of actual or constructive knowledge of the insanity, a payment by a bank of the check of an insane depositor is …

Bills And Notes - Effect On Negotiability Of Provision For Confession Of Judgment, Michigan Law Review

Michigan Law Review

A note was made providing for eighteen monthly payments, and on default of any payment, the whole amount to become due; a clause was inserted in the note authorizing confession of judgment on the note in favor of the holder "at any time hereafter . . . for such amount as may appear to be unpaid thereon, together with costs and attorney's fees." Held, the provision for confession of judgment did not destroy the negotiability of the note, since it authorized confession of judgment only after default in one of the installments due. United States v. Nagorney, (D. …

Bills And Notes - Holder In Due Course - Burden Of Proof Where There Is A Want Of Consideration Between Immediate Parties, James A. Lee

Michigan Law Review

Plaintiff, transferee of a promissory note and a conditional sale contract, brought suit on the negotiable promissory note, and alleged that he was a holder in due course. Defendant answered that there was no consideration for the note. Held, that the burden of proof was on the plaintiff to show that he was a holder in due course by section 59 of the Negotiable Instruments Law which provides: "Every holder is deemed prima facie to be a holder in due course; but when it is shown that the title of any person who has negotiated the instrument was defective, …