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Full-Text Articles in Banking and Finance Law
Bills And Notes - Bad Faith On Part Of Pledgee Taking Bonds
Bills And Notes - Bad Faith On Part Of Pledgee Taking Bonds
Michigan Law Review
Defendant, a Wisconsin firm, issued certain bearer bonds secured by a mortgage held by the T corporation, as trustee. A provision in the mortgage defining the duties of the trustee in the disposition of bonds delivered to it was incorporated into the bonds by reference. The trustee being insolvent, plaintiff bank, as pledgee of some of the bonds taken to secure personal loans to the trustee, petitioned the referee in bankruptcy for permission to sell them, claiming to be a bona fide pledgee for value. Held, since federal courts are bound to follow state decisions interpreting state statutes declaratory …
Banks And Banking - Incidence Of Loss Resulting From Payments By Drawee Bank Not In Accordance With Depositor's Orders
Michigan Law Review
The ordinary commercial deposit normally results in a debtor-creditor relationship between bank and depositor. It is familiar doctrine that in this situation a duty rests upon the bank to honor its creditor's properly drawn orders to the extent of the depositor's balance. Payments by the bank, ostensibly according to such orders, but which are in truth not in accordance therewith, are the bank's loss at least so far as the supposed drawer is concerned. In bookkeeping terms this means that payments by the bank not strictly in pursuance of genuine orders ordinarily cannot be charged against the account of the …
Bills And Notes - Execution Of Instruments By Agents - Liability Under N.I.L.
Bills And Notes - Execution Of Instruments By Agents - Liability Under N.I.L.
Michigan Law Review
The liability of parties on negotiable instruments executed by agents or representatives is a matter which has not been satisfactorily settled by the cases under the N.I.L., due partly to the ambiguity of the statute itself and partly to the obstinate refusal of some courts to adopt the approach of the ordinary business man. Under the law merchant the agent ran a great risk of personal liability in executing a negotiable instrument unless he was careful to spell out that he was signing for a named principal as agent only. If he merely added to his name the phrase "agent …
Bills And Notes - Holder In Due Course -Antecedent Obligation As Value
Bills And Notes - Holder In Due Course -Antecedent Obligation As Value
Michigan Law Review
X, entrusted with the safekeeping of negotiable bearer bonds of A and B, stole A's bonds. On A's request for his securities, X, purporting to deliver what was requested, delivered B's bonds. The wrongdoing was not discovered for over a year. B then sued A to recover the bonds. Held, B may recover, for A is not a purchaser for value. State ex rel. Sorenson v. Nebraska State Sav. Bank, (Neb. 1934) 255 N. W. 52.
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.
Bills And Notes-Accommodation Maker-Holder For Value
Bills And Notes-Accommodation Maker-Holder For Value
Indiana Law Journal
No abstract provided.
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 …
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.
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 …
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-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 - Acceleration Clause As Affecting Negotiability
Bills And Notes - Acceleration Clause As Affecting Negotiability
Michigan Law Review
Defendant was sued on a note containing, among other acceleration clauses, a provision that if any holder deemed himself insecure at any time, the note should become immediately due and payable. Appealing from a summary judgment against him, the defendant contended that the instrument was nonnegotiable. Held, the acceleration provisions in the instrument did not destroy its negotiability. Dart National Bank v. Burton, 258 Mich. 283, 241 N. W. 858 (1932).
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 …
Bills And Notes - Authority To Fill In Blanks - Effect Of Death Of Maker
Bills And Notes - Authority To Fill In Blanks - Effect Of Death Of Maker
Michigan Law Review
H gave W his note in blank with authority to fill it in at $50,000 when she wished, the note representing W's interest in their joint property. W filled in the blanks after H's death and sued H's estate on the note. Held, the authority to fill in was not revoked by H's death, for it was a power coupled with an interest. In re Ferrara (N. J. 19 3 l) 156 Atl. 265.
Bills And Notes-Waiver Of Demand And Notice In Printed Form
Bills And Notes-Waiver Of Demand And Notice In Printed Form
Michigan Law Review
The defendant, Addison, who was payee of a promissory note, indorsed it "Pay to F. Main, Wm. Addison & Son." The indorsement was directly below a printed waiver in the usual form. Apparently the only defense was failure of demand and notice. Held, the indorser must be presumed to have waived these defenses. Krenerick v. Horton, 254 Mich. 12, 235 N. W. 810 (1931).
Bills And Notes - Negotiability - Accelerating Factors Extraneous To Instrument
Bills And Notes - Negotiability - Accelerating Factors Extraneous To Instrument
Michigan Law Review
Plaintiff was a good faith purchaser of a trade acceptance payable at a fixed date with a provision for acceleration at the option of the holder [1] " . . . upon the acceptor hereof suspending payment, [2] giving a chattel mortgage, [3] suffering a fire loss, [4] disposing of his business or [5] failing to meet at maturity any prior trade acceptance." In an action by the plaintiff after the fixed date of maturity, defendant-acceptor contended that accelerating provisions 3 and 5 rendered time of payment uncertain and the instrument non-negotiable. Held, the trade acceptance was negotiable. People's …
Bills And Notes - Restrictive Indorsement
Bills And Notes - Restrictive Indorsement
Michigan Law Review
Plaintiff sued defendant to enforce the collection of two promissory notes which defendant indorsed in blank to X Bank. X Bank indorsed the notes to "Y Bank, as trustee." Y indorsed the notes to plaintiff. All the indorsements were before maturity and for value. Held, on the pleadings, that the order overruling the demurrer to the declaration be sustained. In a concurring opinion, Brown, J., stated that an indorsement to a corporation or person with the words, "as trustee," after the name is not a restrictive indorsement within the meaning of the Uniform Negotiable Instruments Law, sec. 6796, 7, …
Bills And Notes - Negotiation - Implied Warranties
Bills And Notes - Negotiation - Implied Warranties
Michigan Law Review
In a suit by the payee against the maker of a note, the defense was a failure of the consideration, i.e., several assigned drafts had been paid at the time of the assignment. It did not appear whether these unendorsed drafts were order or bearer instruments. Held, under the Negotiable Instruments Law this is not a failure of consideration because the assignor warrants only facts within his knowledge, and evidence of knowledge of these facts by the assignee is admissible to rebut the implied warranty. Queensboro Nat. Bank. v. Kelly, 48 F.(2d)574 (1931).
Bills And Notes - Negotiability Of Note Authorizing Judgment
Bills And Notes - Negotiability Of Note Authorizing Judgment
Michigan Law Review
A note, payable ninety days after date, authorized an entry of judgment against the maker by the holder "at any time after the date thereof, without stay of execution." Held, that this authority destroyed the negotiability of the note because it was neither payable on demand nor at a fixed and determinable future time. Wooleyhan v. Green (Del. 1931) 155 Atl. 602.
A Book Of Little Value, Ralph W. Aigler
A Book Of Little Value, Ralph W. Aigler
Michigan Law Review
The former edition of this textbook appeared in 1922, before the Negotiable Instruments Law had been adopted by all of the states. The changes in the present edition are numerous. Part III of the two former editions has hen eliminated by placing the citations to the Negotiable Instruments Law in the footnotes. Many new sections have been added. The chapter on Guaranty and Suretyship has been eliminated. The introductory chapter is essentially new, and a chapter on Amount of Recovery has been added. The chapter on Conflict of Laws has been rewritten. The author has incorporated the proposed amendments to …
Bills And Notes-Right To Indorsement After Transfer
Bills And Notes-Right To Indorsement After Transfer
Michigan Law Review
The payee assigned a note and mortgage to the plaintiff by separate paper. The plaintiff sued the payee under sec. 49, N. I. L. for indorsement and also for the balance due after foreclosing the mortgage. Held, the plaintiff was entitled to an unqualified indorsement and recovery in the absence of a contrary agreement. Parr v. Ft. Pierce Bank & Trust Co. (Fla. 1930) 130. So. 445.
Bills And Notes-Payee As Holder In Due Course
Bills And Notes-Payee As Holder In Due Course
Michigan Law Review
In an action by the payee against the insane accommodation maker of a promissory note, the court held that the payee is presumed to be a holder in due course. F. S. Royster Guano Co. v. Sherman (N. J. 1930) 151 Atl. 382.
Bills And Notes-Trade Acceptance-Reference To The Purchase Agreement
Bills And Notes-Trade Acceptance-Reference To The Purchase Agreement
Michigan Law Review
The defendant drew a trade acceptance in favor of the Turner Manufacturing Co. containing the following provision: "The obligation of the acceptor hereof arises out of the purchase of goods from the drawer, maturity being in conformity with the original terms of the purchase." The drawer indorsed the instrument to the plaintiff bank, a purchaser in due course. Held, that the trade acceptance was rendered non-negotiable by the clause "maturity being in conformity with the original terms of the purchase." First Nat. Bank, Statesville, N. C. v. Power-Equipment Co. (Iowa, 1930) 233 N.W. 103.
Bills And Notes-Payee As Holder In Due Course
Bills And Notes-Payee As Holder In Due Course
Michigan Law Review
P executed a note and securing mortgage leaving a blank for the name of the payee and mortgagee. A, P's agent, in excess of his authority, filled in the blanks with D's name and with D's knowledge. D in good faith paid full value. Held, under sec. 6055,. Mich. Comp. Laws (1915) D has no claim against P, for he is not a holder in due course. Bronson v. Stetson, 252 Mich. 6, 232 N.W. 741.
Bills And Notes-Checks-Effect Of Alteration Before Acceptance Upon The Acceptor
Bills And Notes-Checks-Effect Of Alteration Before Acceptance Upon The Acceptor
Michigan Law Review
The plaintiff, drawee, sued to recover money paid to the defendant on a certified check in which the name of the payee had been cleverly altered, and which had been indorsed and negotiated by the substituted payee. The plaintiff had certified the check prior to the negotiation to the defendant, an innocent purchaser for value. Held, that under sec. 62 of the N. I. L. the acceptor "engages that he will pay it [the instrument] according to the tenor of his acceptance; and admits, * * * 2. The existence of the payee and his then capacity to indorse"; …
Bills And Notes -- Principal And Agent--Payment To Agent Of Drawer Upon Indorsement Forged By The Agent
Michigan Law Review
A was an agent of P for the purpose of securing applications for loans and disbursing the money to the borrowers. The custom was for P, after approving the application, to send to A a check drawn on D bank, payable to the joint order of A and the borrower. It was also the custom for A, in following out the course of dealing outlined by P, to secure the borrower's indorsement, add his own, deposit the check to an agency account in X bank, and then pay out the money to the borrower by personal checks on his agency …
Recovery On Negotiable Instruments After Blanks Improperly Filled
Recovery On Negotiable Instruments After Blanks Improperly Filled
Michigan Law Review
At the request of a debtor a person signs a note, the amount being left blank, but on the understanding that it should be filled in with the amount of a certain account; by the principal debtor the incomplete note is delivered to the agent of the payee with instructions to fill in the amount of the account as agreed with the surety; the payee's agent, however, fills in a much larger amount. What if anything, should the payee recover from the surety in a suit on the note? A late case in Indiana allows recovery in the amount which …
Amending Our Negotiable Instruments Law, E. C. Dickinson
Amending Our Negotiable Instruments Law, E. C. Dickinson
West Virginia Law Review
No abstract provided.
Recent Important Decisions
Michigan Law Review
A collection of recent important court decisions.