Court Opinion

ID: 5221447
Source: CourtListenerOpinion
Date Created: 2022-01-06 16:34:54.029356+00
Date Added: 2024-06-11T08:27:31.240833
License: Public Domain

Ingraham, P. J.
(dissenting):
The European-American Bank was a corporation organized under the laws of the-State of'New York and the plaintiff was a depositor of such bánk. On or about May 26, 1910, he presented two notes, one dated May 24, 1910, payable three months after date to the order of the plaintiff for $2,000, arid one dated May 25, 1910, payable three months after date, for'' $4,000 for discount. The cashier of the batik offered to discount the notes provided the plaintiff would leave $2,000 of the amount that he was "to be paid for the notes on deposit with the bank, whereupon the bank credited him with the $6,000, the face of the notes less the discount, but took from the plaintiff a check payable to its order for $2,000, and this check the bank charged up against the plaintiff’s account. Thus they credited the plaintiff with $6,000, and at once as part of the same transaction charged him with $2,000.
I think the fundamental character of this transaction was an advance to the plaintiff of $4,000 on these two notes, the *691remaining $2,000 to be paid the plaintiff when the notes were paid. Whether the object of the bank in making this transaction in the form that it was made was to enable the bank to obtain interest on $6,000, when it had in effect advanced but $4,000, or whether it was willing to advance but $4,000 .on these two notes seems to me immaterial. What the bank did was to pay to the . plaintiff $4,000 on account of the discount of these two notes. and what it agreed to do was to pay the plaintiff $2,000 more when the notes were collected. Plaintiff said the cashier told him that if the plaintiff would leave collateral to secure the payment of these notes at maturity he would discount them, and when the cashier was asked how much he wanted he said $2,000 in cash, whereupon plaintiff signed a check for the $2,000, which the bank at once charged up against his account and then credited him with the $6,000, less the interest. The cashier of the bank said that when plaintiff presented the notes for discount' the cashier said that he, plaintiff, would have to leave up as collateral the $2,000 check upon his, plaintiff’s, account, and that the bank at once charged up against the plaintiff’s account the $2,000, represented by this check, with the result that the plaintiff never received that $2,000. The only arrangement in relation to this $2,000 was that it should be retained by the bank until the notes were paid, and the effect, therefore, was that all plaintiff received was $4,000 on the discount of the notes, the bank agreeing to pay him $2,000 in addition when the notes were paid. These notes became due on the twenty-fourth" and twenty-fifth of August, but on the sixth of August the bank failed and its assets were taken over by the Superintendent of Banks for the purpose of liquidation. Among the assets he found these notes and they were duly collected on the twenty-fourth and twenty-fifth of August, and the whole $6,000 received by the Superintendent from the makers of the notes. When the Superintendent of Banks collected these notes $4,000 of the amount was part of the assets of the bank, but I think it clear that the remaining $2,000 was money that belonged to the plaintiff, which under his arrangement with the bank was to be paid to him when, the bank had collected it, and the Superintendent *692of Banks acting for the bank as its liquidator having collected this $2,000 upon the notes that belonged . to the •plaintiff was responsible to the plaintiff for that amount. If the notes had been deposited with the bank as security for a loan of - $4,000, I think nobody could claim that either the bank or the Superintendent of Banks as its liquidator had a right to retain from the proceeds of the notes when paid more than $4,000,- sufficient to reimburse the bank for the loan it had made to plaintiff. If the plaintiff had put up independent collateral for the payment of those notes and the Superintendent of Banks had received that collateral when the bank failed, when the notes were paid the plaintiff would, clearly have been entitled to the return of the collateral, and if the Superintendent of Banks- refused to return it I think he could have sued him for it. It seems to me that the Superintendent stood exactly in the position of the bank,, i. e., that the bank had advanced $4,000, on the discount of these notes and the' remainder was to be paid over to the plaintiff when the bank collected it. Thus, it' was the plaintiff’s money to the extent of $2,000 when' the Superintendent collected these notes and not the money of the bank or .its creditors. ' And for that amount I think the plaintiff is entitled to judgment. The act of- the bank just before it failed in crediting plaintiff with this $2,000, without giving him any notice of that fact or opportunity to withdraw it, could not affect the rights as between the plaintiff and the bank under the original contract. The original contract was that the'plaintiff was not to receive that $2,000 until the notes were paid. The plaintiff never did receive it nor was that understanding modified by any arrangement between the parties. It is plain from the evidence that the bank never did intend by this credit to give the plaintiff an opportunity to withdraw that $2,000. It was evidently credited up to balance the account between this bank and the Mercantile National Bank as the result of the check being outstanding: But this had nothing to do with the rights- of the plaintiff and certainly until he was notified of this change in the relation that existed as to. this $2,000 no act of the bank could change that relation. What' the bank really did was to loan him $4,000 on two notes aggregating *693$6,000, and the remaining $2,000 was to he retained until the bank collected it when it would belong to the plaintiff. If the bank had failed to collect more than $4,000 on the two notes it would clearly have been entitled to retain that sum, hut the plaintiff would then have been entitled to the two notes to collect whatever he could from the makers. The Superintendent of Banks, therefore, acting as liquidator of the bank and in its right having collected, the $4,000 due the bank and the $2,000 which belonged to the plaintiff and which never had been paid to him, I think the Superintendent held that $2,000 as money had and received for the use' of the plaintiff and for that the plaintiff was entitled to judgment.
I, therefore, dissent from the reversal of this judgment.
Judgment reversed, with costs, and complaint dismissed, with costs.