Court Opinion

ID: 8255691
Source: CourtListenerOpinion
Date Created: 2022-10-16 13:40:16.216159+00
Date Added: 2024-06-11T16:42:59.162815
License: Public Domain

By the Court.

Whether there be a general balance of account, due from the insolvents to the defendants, is a question which is to be determined by the nature of the dealings and transactions between the parties ; not from the *346manner in which the defendants have made entries in their books.
The Bank of the United States, and it is believed, like it, every other incorporated bank in these states, carry on business in a manner quite different, than English bankers do. The latter make actual loans and advances of money to their customers, the American banks deal no otherwise, in advances of money, than by discounting or purchasing bills or notes. Cash is obtained from the defendants on contracts executed : never on an executory one. On the discount being effected, the net proceeds of the note are instantly placed to the credit of the person presenting it, as if he had actually deposited the specie : and when the day of payment arrives, they present always a note, never an account, for payment : so that they never are creditors of a balance of account. They cannot, therefore, successfully invoke the principles, on which factors and others are allowed to retain the property of their principals, for the payment of the general balance of their accounts.
The claim, which the defendants have on the insolvents, arises, therefore, on their notes, discounted for their (the insolvents’) benefit, or that of other persons. As to the notes which were discounted for the benefit of the insolvents, the discount was effected, according to the rules of the bank, ( art. 4, pages 17-50) on personal *347security only, with at least, two responsible names. It cannot be pretended, that the insolvents impliedly assented to the lenders having any security, in to on money was obtained.—The defendants, therefore, have no lien on any property of the insolvents, which, at the time of the discount, happened to be in their hands, or has fallen into them since—unless they are intitled thereto, under the ordinance of Bilboa.
As to notes of the insolvents, which were discounted, for the benefit of other persons, the defendants are much less founded in claiming the lien.
With regard to the defendants’ right of setting off the debt, due them by the insolvents, against the claim of the plaintiffs, it appears to the court, that, from the nature of that claim and the things which are the object of it, no set off, or compensation can be admitted against it.
By the 4th article of the regulations of the bank, (pages 22-79) on the faith of which the notes in dispute were placed in the defendants’ hands, notes or bills deposited for collection.....shall remain subject to the order of the depositor, as is provided, in cases of other deposits,” The bank (id. pages 28-109) “ shall take charge of the cash.....shall receive deposits of ingots of gold, &c. and return them, on demand, to the depositor,”
*348The defendants, m all these cases, being depositaries, cannot oppose any set on or compensation against the claim of the deposit. In causa depositi compensatiom locus non est. n. 12. 13.
Pothier thinks that this is to be understood of an irregular deposit, such as is spoken of in the laws 24. 25. s. 1. and 26. s. 1 ff. depos. by which, (like in deposits of money in a bank) one gives, in trust to another, a sum of money to be put with other sums, deposited by other persons, and return, not the same pieces, but the same sum. For, in the case of a regular deposit, as that of a bag sealed, an ingot of gold or the like, no set off or compensation can be opposed, not only because a deposit is claimed, but on account of the general rule, that on claims of a thing certain, no set off or compensation is to be admitted. 2 Pothier on obligations 95.
The ordinance of Bilbao is not applicable to the present case. It does not expressly reach it and we cannot extend it by implication : for the cases are not parallel. If I deposit my goods in a merchant’s warehouse, I hereby give him credit and induce others, who are ignorant of the nature of the bailment, by which he acquires the possession of them, to place a greater confidence in the depositary, than they otherwise would—while, if I deposit them with my creditor, he cannot be deceived and extend credit to me on *349that account, for he knows that his, is my possession and that his precarious hold will not avail him, if he make advances to me.
Judgment fo the Plaintiffs.