The record-union., 1892-04-28
POLITICS ASSIGNMENT.
The Supreme Court Decides an In
tricate Bank Transaction.
The National Bank of D. o. Mills t&
Co. Sustained-A Case of
Local Interest.

The Supreme Court has rendered an in
teresting decision in the case of William
Steinhart ct al, appellants, VS.. National
Bank of ID. o. Mills d Co., an action
brought to recover the sum of $500,
money alleged to have been received by
the defendant to and for the use of the
plaintiff.
The lower court gave judgment for the
bank, from which, and from an order re-
fuslng new trial, Steinhart appealed.
On the 18th day of December, 1888, G..
Politz of this city made his promissory
note to the plaintiffs for $3.50, payable two
months after date to the bank. They de-
llvereo it to the London, Paris and Amer
lean Bank of San Francisco for collection,
which bank forwarded it to defendant at
Sacramento to be presented for payment,
and IL was received Sunday, February II,
1889. The maker was customer Of the
Dank, and on the morning of the 18th he
deposited S4OO on general account. While
ne was at The bank, at the time he made
Ihe deposit, clerk presented the note for
payment. The maker wrote across the
face of the note. please charge the same
TO my account. @. Politz." The clerk
then wrote on the back of the note,
held, the clerk, then stamped these words
on the back of the note within square,
National Bank of ID. 0. Mills Il Co.,
February Is, 1889, Sacramento. Cal" The
square and words were in red ink and
understood to mean 'canceled." The
clerk then charged the amount of the
note in the passbook OF the maker and in
the journal of the bank.
Before the close of the business hours
OF the day the defendant drew his check
IN favor of the London, Paris and San
Francisco Bank upon the Bank of Cali
fornia, and after the close of business
hours inclosed its check in an enyelone
with letter of advice addressed to the
London, Paris and San Francisco Bank.
At the time of this transaction Politz had
no money or other funds on deposit at the
bank. Some time previous he had made
his note, payable one day after date to the
bank TO cover over-draftS, for the sum of
$500, which was accredited to his ac-
count. Allowing this note as credit in
account with Politz and charging him
with the amount said check the journal
Of the defendant at the close of the busi-
ness hours on that day showed nominal
credit in his favor of S367 but in fact he
had oyerdrawn his account IN excess of
his note, then overdue, and moneys de
posted, more than $2, coo.
At the time the defendant received the
note from Politz for $500 to cover over
drafts he was in good credit, but in fact
insolvent, and was insolvent on the 18th
day of February, 1889, at the time of the
transaction, out of which the action arose;
and about o'clock of the afternoon of
that day he made a general assignment
under the provisions of the Civil Code for
the benefit of his creditors.
The bank knew nothing of the insolv-
ency of PolitZ until after the ASSIGNMENT
was made. On the same day, imme-
diately after ascertaining that he had
made an assignment, the defendant pro-
cured the envelope from the postoffice
containing the check and Cancelled it, and
Immediately indorsed on the back of the
note these words: Charged in error: f.
Miller, Cashier" Cancelled in error. r.
Miller, Cashier" And the same evening
returned the note by mail with letter OF
adyice as TO what had been done, to the
London, Paris and American Bank of
San Francisco. There were no indorsers
on the note due plaintiffs. Neither the
plaintiffs, nor the London, Paris and
American Bank knew or had any notice
of the transaction between the defendant
and Politz, or of the drawing of the draft
by the defendant, until after the check
had been Cancelled, and the defendant
had declined to pay the note. The de-
fendant did not receive any money or
other valuable thing from Politz to or for
the use of plaintiffs, and they lost no
rights by the acts of defendants
The Supreme Court says: upon these
facts the principal question presented for
decision is, Did the transaction between
Politz and the defendant constitute a
payment of the note? The appellants
contend it did, and that the finding that
the defendant did not receive any money
or other valuable thing from Politz to or
for the use of plaintiffs-and they have
lost no rights by the acts of defendant
II
above is the only finding objected to, and
we do not think the contention to 1t can
be sustained"
After going over the case at length and
citing various cases and authorities the
Supreme Court says further: "In our
opinion the note was not paid and the
finding objected to was justified and
proper. We think the judgment and
order should be affirmed and SO advise.
Judgment affirmed"