Cent. Sav. Bank & Trust Co. of Kentucky v. Wachman

• Decision Date: 23 March 1923
• Citation: 221 Mich. 512,191 N.W. 5
• Parties: CENTRAL SAVINGS BANK & TRUST CO. OF KENTUCKY v. WACHMAN et al.*
• Court: Michigan Supreme Court

221 Mich. 512

191 N.W. 5

CENTRAL SAVINGS BANK & TRUST CO. OF KENTUCKY

v.WACHMAN et al.*

Supreme Court of Michigan.

FN* Rehearing denied March 23, 1923.

No. 178.

Dec. 29, 1922.

Error to Circuit Court, Wayne County; Clyde I. Webster, Judge.

Action by the Central Savings Bank & Trust Company of Kentucky against Robert Wachman and others. Judgment for defendants, and plaintiff brings error. Reversed and remanded, with directions.

Argued before FELLOWS, C. J., and WIEST, McDONALD, CLARK, BIRD, SHARPE, and STEERE, JJ. Frank D. Andrus, of Detroit, for appellant.

Samuel Shimans, of Detroit, for appellees Stotter and Erwin.

McDONALD, J.

This action is brought by the plaintiff, a banking institution of Covington, Ky., to recover on three promissory notes given by the defendants, payable to one Luther B. Watson, and discounted by him at plaintiff's bank. The case has been to this court before, and is reported in 207 Mich. 329, 174 N. W. 142. The facts are there fully stated. On the first trial there was a directed verdict for the plaintiff. The defendants appealed. The judgment of the circuit court was reversed because there was no evidence as to--

‘when this account to the credit of which these notes were placed was drawn upon or exhausted; whether before or after the maturity of the notes or before or after notice of the fraud or protest.’

At the close of the testimony in the instant case both parties moved for a directed verdict. The motions were denied, and the case submitted to the jury. The verdict was for the defendants. Counsel for the plaintiff then made a motion for a judgment non obstante veredicto. This motion was denied, and judgment entered on the verdict. From this judgment the plaintiff appealed.

In this record the evidence is undisputed that the bank took the notes and credited Mr. Watson's account with the proceeds, amounting to $2,079.40. After which, with his consent, it charged his account with the indebtedness of the Jiffy Starter Company. This left an overdraft in his account of $97.33, which he paid. All of this was done before the maturity of the notes, and before there was any notice of fraud or of protest. The notes were valid on their face. Under these circumstances, the bank was a purchaser in good faith and for value. The case is controlled by Fredonia Nat. Bank v. Tommei, 131 Mich. 674, 92 N. W. 348, and by Central Savings Bank v. Stotter et al., 207 Mich. 329, 174 N. W. 142, and cases cited therein.

The claim that...