Case ID: walker_2/html/0493-01.html
Source: Caselaw Access Project
Author: {"author": "Per Curiam.", "license": "Public Domain", "url": "https://static.case.law/"}
Date Created: 2024-08-24T03:29:51.129683

THE NATIONAL BANK OF THE REPUBLIC VS. GORMLEY.
    A bank has not a right to charge a note against the deposit of an indorser, who dies insolvent before the note becomes due.
    Error to the Court of Common Pleas, No. 1, of Philadelphia County. No. 151 July Term, 1883.
    This was an action to recover a deposit which stood in the name of Joseph Gormley, and was brought by Mary E. Gormley, his administratrix, against the National Bank of the Republic. The jury find a special verdict as follows: That Joseph Gormley died on April 12th, 1881, insolvent, and that the plaintiff is his administratrix. That John A. Shermer- gavé his promissory note, dated March .3,1881, on 3 months for. $500, to the order of Joseph Gormley, for the. accommodation of said Joseph Gormley, and without consideration moving, to the said John A. Shermer. That on March 4th, 1881, the defendant discounted the said note for the said Gormley, and placed the proceeds, $492.08, to the credit of said Gormley, in his account in said bank, and that the said sum of $492.08, the proceeds and the discount of said note, are in the said bank, and are part of the balance of $587.81 for which this suit is brought. That on June-7th, 1881, the'defendant charged back the note, which had been protested on June 6th, 1881, to the said Gormley in his account with the said bank. That on April 30th, 1883, the defendant tendered to the plaintiff the note discounted as aforesaid, and the amount of the discount namely, $7.92, with. interest from March 4th, 1881, and offered to rescind the contract, which plaintiff refused to accept. That the present suit was brought on June 3,1881. That if under the above findings, of fact the Court should be of the opinion that the plaintiff is entitled to recover the full amount claimed by her, then the jury find for the plaintiff, and assess the damages at $575.28. That if the Court should be of the opinion that the defendant be entitled to retain the proceeds and the discount of the note, then they find for the defendant. The Court entered judgment in favor of the plaintiff, upon special verdict, delivering the following opinion:
    Per Curiam.
    The only question here is how the rights of the parties are affected by the death of the plaintiff'. In Dougherty vs. Bank, 9th W. N. C. page 1, the Supreme Court decided that when a bank had discounted a note for a customer, and placed the amount of it to his credit, they could withdraw the credit upon 'tendering him the note and the amount of the discount. They were careful, however, to add the qualification that this must be done before payment or notice of any checks drawn upon the fund. In this case the discount was obtained by Gormley on March 4th, 1881, and the proceeds placed to his credit. On the 12th of April, 1881, he diéd insolvent. On the 6th of June, 1881, the bank protested the note, which they had held up to that time, and on the next day charged the amount back to the account of the decedent, without tendering the note or the amount of the discount. Can it be truly said, in a case of this kind, that the rights of third parties are unaffected by his death. 'The rights of the creditors at once attach, and the fact was known to the bank for almost a month before they attempted to revoke the credit. If notice to the bank of an outstanding ‘ ■check, or an assignment, is sufficient to bar the bank of this right, it would seem that so open and notorious a transfer as the law makes in cases of death, should be sufficient to do so.
    The bank then took a writ of error, complaining of the action of the Court in entering judgment for the plaintiff.
    
      Messrs. Hood Gilpin and Charles Gilpin, Esqs., for plaintiff in error
    argued that the bank had the right to rescind the contract upon tendering the note and the discount; Dougherty vs. Bank, 9 W. N. C. 1; Conyers vs. Ennis, 2 Mason 236; Seymour vs. Newton, 105 Mass. 105; Hays vs. Mouille, 14 Penna. 48. Where the rights of the parties remain unchanged, the right to rescind' continues; Morgan vs. McKee, 77 Penna. 228; Pearsoll vs. Chapin, 8 Wr. 9; Negley vs. Lindsay, 67 Penna. 217; Leaming vs. Wise, 73 Penna. 173.
    
      Paul M. Elsasser, Esq., for defendants in error
    argued that in the case of Dougherty vs. Bank the owner of the deposit was .alive. The right of the creditors attached upon the death of Gormley; Jordan vs. Sharlock, 3 Norris 368; Bosler’s Administrator vs. Bank, 4 Pa. 32.
   The Supreme Court affirmed the judgment of the Court of Common Pleas oh Feb. 4th, 1884, in the following opinion:

Per Curiam.

On the death of Joseph Gormley insolvent, all his creditors '.acquired a claim on his estate. Although this money was on deposit in the bank, yet it stood to his credit, and until his death was subject to his .check. The fact that the bank held a note which they had discounted for him on his indorsement; b.ut which was not due when he died, gave it no lien on this money, nor any preferred right thereto over other creditors of the decedent. As it had .no such preferred right during his life, it acquired none by his death. The case of Dougherty vs. Bank, 9 W. N. C. 1, is not applicable to the facts in this case.

Judgment affirmed.