Facts:

• Bryan, Landon Co. filed a complaint against the American Bank.
• The plaintiff purchased a check worth $4,000 from the American Bank on April 19, 1905.
• The check was made payable to R.R. Landon and was to be paid by the First National Bank in San Francisco.
• The plaintiff paid $4,000 in US currency for the check.
• On May 18, 1905, the American Bank was closed by the government and a receiver was appointed.
• The check was presented for payment to the First National Bank, but payment was refused and the check was protested for nonpayment.
• The plaintiff claims that the purchase of the check operated as an equitable assignment of the funds in the San Francisco bank to the credit of the American Bank.

Issue:

• (Unlock)

Ruling:

• The court ruled in favor of the American Bank and its receiver, denying the plaintiff's claim for preference in...(Unlock)

Ratio:

• The court based its decision on the decisions of the Supreme Court of the United States.
• The court cited the cases of Laclede Bank vs. Schuler, Florence Mining Co. vs. Brown, and Fourth Street Bank vs. Yardley, which all established that a check, in the ordinary form, does not constitute an equitable assignment of an indebtedness.
• A check is simply an order that may be countermanded by the drawer before it is cashed.
• A check d...continue reading