Gordon, Secretary of Banking v. Fifth Avenue Bank of Pittsburgh
| Decision Date | 30 June 1932 |
| Docket Number | 109 |
| Citation | 162 A. 825,308 Pa. 323 |
| Parties | Gordon, Secretary of Banking, Appellant, v. Fifth Avenue Bank of Pittsburgh |
| Court | Pennsylvania Supreme Court |
Argued April 22, 1932
Appeal, No. 109, March T., 1932, by plaintiffs, from order of C.P. Allegheny Co., Jan. T., 1932, No. 3651, discharging rule for judgment for want of sufficient affidavit of defense, in case of William D. Gordon, secretary of banking of the Commonwealth of Pennsylvania in possession of business and property of Merchants Savings & Trust Co. by Walter C Brenneis, special deputy, v. Fifth Ave. Bank of Pittsburgh. Reversed.
Rule for judgment for want of sufficient affidavit of defense.
The opinion of the Supreme Court states the facts.
Rule discharged in opinion by EGAN, J.
Plaintiff appealed.
Error assigned was order, quoting record.
The order discharging the rule for judgment is reversed and the record is remitted with directions to enter judgment against the defendant for such sum as to right and justice may belong unless other legal or equitable cause be shown why such judgment should not be so entered.
David Glick, Special Deputy Attorney General, with him Edward O Spotts and William A. Schnader, Attorney General, for appellant. -- A certificate of deposit is a negotiable instrument in Pennsylvania.: Forrest v. Banking A Trust Co., 174 F. 345.
It is submitted that it is almost uniformly held throughout the United States that a certificate of deposit in the regular ordinary form, payable to order or bearer, is a negotiable instrument.: Fallon v. Safety Banking & Trust Co., 45 Pa. Superior Ct., 193; Schwartz's App., 291 Pa. 463; Snyder v. Bank, 294 Pa. 1.
R. A. Applegate, with him O. K. Price and Rose & Eichenauer, for appellee. -- The instrument upon which suit is brought is not a negotiable instrument: Patterson v. Poindexter, 6 W. & S. 227; Charnley v. Dulles, 8 W. & S. 353; Lebanon Bank v. Mangan, 28 Pa. 452; Loudon Savings Fund Society v. Savings Bank, 36 Pa. 498; Dempsey v. Harm, 7 Sadler 426.
This question is not affected by the passage of the Negotiable Instruments Act: Fehr v. Campbell, 288 Pa. 549; Gratz v. Ins. Co., 282 Pa. 224; Stadler v. Bank, 22 Mont. 201.
In another respect a certificate of deposit differs from a promissory note, to-wit, in the necessity for presentment and demand: Lebanon Bank v. Mangan, 28 Pa. 452.
Before FRAZER, C.J., SIMPSON, KEPHART, SCHAFFER, MAXEY, DREW and LINN, JJ.
Plaintiff is secretary of banking, in possession of the Merchants Savings and Trust Company for purposes of liquidation under the Banking Act of 1923 P.L. 809 as amended. Among the assets was a certificate of deposit issued by defendant to a payee named Breitwieser, and endorsed by him; payment was refused and this suit followed. The certificate is in these word:
Defendant filed an affidavit of defense averring that on or about the date of the certificate, the payee, Breitwieser, borrowed from defendant the sum of $13,750 on his collateral note payable on demand; that on November 10th defendant demanded payment and that Breitwieser refused to pay, whereupon defendant, before the maturity of the certificate, appropriated the deposit represented by it and so applied the fund to the payment of his note. A rule for judgment for want of a sufficient affidavit of defense was taken on the ground that the certificate was a negotiable instrument and that plaintiff was a holder in due course. The learned court below held that the certificate was not negotiable and discharged the rule. Plaintiff appeals.
While certificates of deposit appear to vary greatly in form, this is the first time, since the enactment of the Negotiable Instruments Law, that it has become necessary to pass on the negotiability of such an instrument. It is a subsisting chose in action representing the fund which it describes. Without inquiring whether it is true, as has been said, that Pennsylvania is the only state in which a certificate of deposit is held not to be negotiable, it is a fact that in Patterson v. Poindexter, 6 W. & S. 227 (followed in Charnley v. Dulles, 8 W. & S. 353; Lebanon v. Mangan, 28 Pa. 452; Loudon Savings Fund v. Hagerstown Bank, 36 Pa. 498, 1860), it was decided that such certificates, in the form considered in those cases, were not negotiable. In the Patterson Case importance was attributed to the fact that the certificate was not a promissory note within the statute of Anne (Roberts's Digest 375). In that connection, therefore, it should be noted that the statute did not specify or define what should constitute a promissory note. [*]
Since the decision of Patterson v. Poindexter and the cases following it, the legislature has specified what shall constitute a negotiable instrument: Act of May 16, 1901 P.L 194. Many instruments which would not have been negotiable in the sense in which we are considering the term, prior to the Negotiable Instruments Law, are negotiable according to its provisions. The question must, therefore, now be considered in the light of the statute, keeping in mind that we are dealing with a law, with slight variations, in force all over the country and enacted, in this...
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