Court Opinion

ID: 8200866
Source: CourtListenerOpinion
Date Created: 2022-09-09 23:28:52.532456+00
Date Added: 2024-06-11T16:40:54.960293
License: Public Domain

Currie, J.
{dissenting). While I am in accord with the principles of law enunciated in the majority opinion I disagree with their application to the instant case. Here, plaintiff bank stopped payment on its own draft on September 18th, after being apprised of the fraud, and did not lift this stop-payment order until October 15th. I would hold that such stopping of payment had the effect of reversing the prior completed transaction, whereby plaintiff had exchanged its own draft drawn on the First National Bank of Chicago for defendant’s drafts, so as to make applicable sec. 116.59, Stats. This statute provides:
“Where the transferee receives notice of any infirmity in the instrument or defect in the title of the person negotiating the same before he has paid therefor the full amount agreed to be paid he will be deemed a holder in due course only to the extent of the amount theretofore paid by him.”
*51After having stopped payment on its own draft, such draft should only be construed as constituting “payment” within the meaning of sec. 116.59, Stats., if it was held by a holder in due course at the time payment was stopped. Such a determination would in no wise disrupt ordinary commercial banking practices and might result in protecting the defrauded party against loss.
For example, in the instant case if La Salle National had only granted a deposit credit to S & S Motors, Inc., or to Sauer for plaintiffs draft at the time plaintiff stopped payment, La Salle National would not have been a holder in due course because it had not parted with value under our decisions in Hodge v. Smith (1907), 130 Wis. 326, 110 N. W. 192, and First Nat. Bank v. Court (1924), 183 Wis. 203, 197 N. W. 798. Once plaintiff stopped payment on its draft it thereafter paid the same at its peril if such draft was not in the hands of a holder in due course at the time of such stoppage of payment.
I would reverse and remand for determination of the issue of whether La Salle National was a holder in due course of plaintiff’s draft at the time payment was stopped thereon.