Banking and Finance Law Commons^™

Installment Contracts

Michigan Law Review

Section 301 of the Soldiers' and Sailors' Civil Relief Act of 1940, as amended in 1942, is designed to protect the serviceman who has purchased property on the installment plan against forfeitures. It provides that a vendor or seller (or his assignee) of real or personal property (including a lease or bailment with a view to purchase) may not terminate or rescind his contract or resume possession of the property because of nonpayment or for any other breach of contract except by an action brought in a court of competent jurisdiction. This section is applicable in all cases in which …

Secured Obligations, Benjamin M. Quigg, Jr.

Michigan Law Review

The scope of this discussion probably is best defined in the words of the act itself as appear in section 302 (1): "obligations secured by mortgage, trust deed, or other security in the nature of a mortgage · upon real or personal property, owned by a person in military service at the commencement of the period of military service"; and the problems herein discussed are those which arise under the act in connection with the sale, foreclosure, seizure, or repossession of property which is security for such obligations.

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 …

Foreign Exchange Restrictions And Public Policy In The Conflict Of Laws: Part Ii, Evsey S. Rashba

Michigan Law Review

Political Laws have been the subject of a much disputed doctrine. It has been stated by Dicey, and by other authoritative writers in various countries, that a court has no jurisdiction to entertain an action for the enforcement of a "political law" of a foreign state. The term "political law" is not limited to the field of public law. It is, of course, only exceptionally that rules governing the relations between a state and its citizens are given extraterritorial effect. The doctrine goes further. It holds that rules which are technically a part of private law, but which are designed …

Bills And Notes -Acceleration Provision As Affecting Negotiability

Michigan Law Review

In an action against the maker of a promissory note by an indorsee thereof, claiming to be a holder in due course, the question was the negotiability of the note. It contained a provision that "If the maker or anyone of the makers hereof shall fail to furnish additional security upon the demand of said company, said company is authorized to declare all indebtedness owed to it by the maker or makers hereof immediately due and payable without giving notice of said declaration." Held, the quoted language rendered the note nonnegotiable. American Finance Corp. v. Bourne, 190 Okla. …

Some Legal Aspects Of Guaranteed War Loans, William B. Cudlip

Michigan Law Review

Of the many innovations in the field of commercial banking since 1933, one of the most important introduced as a result of the war emergency is the "guaranteed" war loan plan which was authorized by the President under Executive Order 9112, dated March 26, 1942. Under the plan any loan made by any financing institution, including specified government agencies, to a borrower engaged in the production of war materials may be guaranteed by the War or Navy Departments or the Maritime Commission of the federal government, in those cases where the borrower is unable to obtain adequate financing without such …

Banks And Banking - Immunity Of National Banks From State Escheat Statute, Spencer E. Irons

Michigan Law Review

A Michigan statute provided that bank deposits, in the possession or control of insolvent banks, which have remained inactive for a period of seven years or more shall escheat to the state. In a suit for a declaratory judgment, filed by the Attorney General of Michigan, against the receiver of an insolvent national bank and the Comptroller of the Currency of the United States, the federal district court held that the receiver must turn over deposits coming within the terms of the statute. Held, the statute is invalid if so applied, since it would constitute an unlawful interference with …

Bills And Notes - Effect Of Unreasonable Delay In Presentment For Payment Of Demand Notes And Bills Of Exchange, Lloyd M. Forster

Michigan Law Review

The Negotiable Instruments Law, section 71, provides: "Where [the instrument] is payable on demand, presentment must be made within a reasonable time after its issue, except that in the case of a bill of exchange, presentment for payment will be sufficient if made within a reasonable time after the last negotiation thereof." This section raises some extremely complex problems: (1) Can the discharge of the contractual liability of the drawer and all indorsers of a demand bill of exchange be indefinitely postponed by successive negotiations, each within a reasonable time after the last? (2) Can the liability of the drawer …

Execution - Misdirection Of Process - Validity Of Amendment, Michigan Law Review

Michigan Law Review

A statute provided that where the writ of execution requires the delivery of real or personal property, it "must" be issued to the sheriff of the county where the property is situated. The judgment debtor had some money deposited with the defendant bank in Y county on which plaintiff sought execution. The writ was directed to the sheriff of X county but was delivered to the sheriff of Y county. The writ was served on the defendant bank and the vice president of the bank made a return stating that the bank had no property in its possession, nor under …

Joint Obligations- Effect Of Release Or Covenant Not To Sue, Michigan Law Review

Michigan Law Review

Defendants mortgaged their farm to plaintiff and later conveyed to one Ahart, who assumed the mortgage indebtedness. In a written extension agreement between all three parties it was provided that the defendants and Ahart should be jointly and severally liable for the debt. After foreclosure proceedings were started, Ahart and the plaintiff entered into a written contract by which the plaintiff agreed to release Ahart from all personal liability on the mortgage indebtedness in consideration of a deed to the farm. Thereafter the plaintiff sought a deficiency judgment against the defendants. Held, the defendants were not discharged from their …

Mortgages - Recording - Effect Of A Mortgage Recorded In The Book Of Deeds, Paul M. Oberndorf

Michigan Law Review

An interest in certain land was mortgaged by the owners to the plaintiff in October, 1933. This same interest was subjected to a lien of certain judgment creditors recovered against the owners in July, 1936. The defendant, as assignee of the claim of the judgment creditors, claimed priority over the mortgagee by reason of the fact that the mortgage was delivered to the register for the purpose of being recorded as a deed and was in fact so recorded. The judgment creditors disclaimed all notice of this prior mortgage. The statutes of New Jersey provide that mortgages should be registered …

Principal And Surety - Effect Of Release Of Principal Debtor With Reservation Of Rights Against Surety, Raymond H. Rapaport

Michigan Law Review

Plaintiff leased property to defendant, who in turn assigned his rights under the lease to one Garber, the latter assuming the covenants to pay rent and against commission of waste. Plaintiff did not release defendant from the lease. After the expiration of the lease plaintiff recovered judgment for $2,844.75 against defendant, for breaches of the covenants, and then recovered a similar judgment against Garber. Subsequently Garber paid the plaintiff $2,000, and plaintiff gave him a receipt acknowledging "full satisfaction of the judgment rendered against me in the within action. The receipt of said sum is not a release of any …

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 …

Exemptions - Loss Of Homestead Exemption, Felicia I. Hmiel

Michigan Law Review

Due to inability to make a living, the defendant and his family left their homestead in 1932 with the intention of re-occupying it as soon as they secured enough money to buy the necessary equipment to maintain themselves on the farm. In October, 1937, a judgment was recovered by plaintiff against defendant, execution was issued and levy made on the still vacant homestead, and a date of sale set for June, 1939. Defendant claimed homestead exemption. Held, that since it did not appear when, if ever, defendant would return to the homestead, the removal and seven years' absence was …

Douglas On Democracy And Finance -- A Review, Arthur A. Ballantine

Michigan Law Review

A book by a Justice of the Supreme Court of the United States would be important under any circumstances. Such a publication is of special significance when its author is the youngest member of the Court, with many years of service ahead, and is endowed with unusual character, ability and earnestness of purpose. In these days of change such a book supplies valuable insight into the mental processes and attitude that will enter deeply into the shaping of our institutions.

Banks And Banking - Right Of National Bank To Sue On Personal Guaranty To State Bank After Consolidation L Of State Bank With National Bank, William C. Whitehead

Michigan Law Review

Defendants guaranteed payment to a state bank of the notes and renewals made by a borrower. Shortly thereafter the state bank was consolidated with a national banking association. The borrower issued a renewal note to the consolidated bank for the indebtedness owing the state bank. This was followed by a consolidation with another state bank, the appointment of a receiver, and the sale of the consolidated bank's assets to plaintiff. In answer to the claim on the guaranty for payment of the renewal note, defendants declared that the obligation was not assignable and that the identity of the obligee was …

Fraudulent Conveyances - Executory Consideration As "Fair Consideration" Under The Uniform Fraudulent Conveyance Act, Robert Kneeland

Michigan Law Review

Plaintiff, a purchaser of mortgaged realty, claimed that there had been a series of conveyances of this property originating with a remote grantor, fraudulent as to said grantor's creditors. At the time plaintiff learned of this, he had already paid taxes on the property and paid $4605 on the purchase price, leaving a balance of $2986 due on his contract. Since, allegedly, plaintiff would have been subject to an action of the creditors to have the conveyance to him set aside/ plaintiff sought to join all creditors and defrauders in an attempt to clear the title, or, if the transaction …

Bills And Notes - Effect On Negotiability Of Recital Of Transaction Giving Rise To Note, Michigan Law Review

Michigan Law Review

For Mighty King #14468 Saddle Horse was inscribed on the face of the note upon which the plaintiff, the holder of the note, brought suit against the maker. At the trial it was discovered that the payee of the note still held title to the horse, and the sale for which the note was given was a conditional one depending on whether or not one hoof of Mighty King healed. The plaintiff had been given no notice of this condition. Held, the mere statement of the consideration giving rise to the note did not serve as notice of the …

Instalment Payment Of Judgments, Frederick Woodbridge

Michigan Law Review

This article is concerned primarily with a discussion of satisfaction of judgments by instalment payments where the judgment debtor is the typical American wage earner. It is based upon an analysis of the applicable statutes, the experience recorded in decided cases, interviews with numerous judges administering the statutes, and observations in certain of the courts where that method is used.

Glenn On Fraudulent Conveyances And Preferences, Fred T. Hanson

Michigan Law Review

Professor Glenn's new two volume work on Fraudulent Conveyances and Preferences is much more than a revised edition of his previous book. The treatment of preferences is new and the material in the old book is revised and expanded. This expansion is particularly evident in his dealing with commercial financing devices--consignments, trust receipts, after-acquired property clauses, and freehanded mortgages of goods and accounts--which he now views also from the standpoint of preference.

Banks And Banking -Trusts - Right Of Bank To Sell Participating Trust Certificates In Self-Owned Property, Michigan Law Review

Michigan Law Review

In 1923 the trust company entered into a transaction with the land company by which the land company borrowed $130,000 with which it purchased a city property for slightly less than that amount and gave title to the trust company as security for the loan. Through a series of loans later negotiated the trust company came to have an investment of $150,000 in the property. In 1926 the trust company made an agreement with the land company pursuant to which the trust company declared itself trustee of the property at an appraised value almost fifty per cent above the purchase …

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 …

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 …

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 …

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 …

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 - 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 …

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 …