Schinotti v. Whitney

• Decision Date: 31 May 1904
• Docket Number: 13,222.
• Citation: 130 F. 780
• Parties: SCHINOTTI v. WHITNEY.
• Court: U.S. District Court — Eastern District of Louisiana

130 F. 780

SCHINOTTI v. WHITNEY.

No. 13,222.

United States Circuit Court, E.D. Louisiana.

May 31, 1904

Farrar Jonas & Kruttschnitt, for plaintiff.

Saunders & Gurley, for defendant.

PARLANGE District Judge (after stating the facts as above).

The question to be decided is whether the bank deposits in question were 'money lent' within the meaning of article 3538 (3503), Civ.CodeLa., which provides that actions 'for the payment of money lent' are prescribed by three years. The matter was argued before me on the assumption that it was one wholly governed by the law of Louisiana a conclusion. As I read the decisions of the Supreme Court of Louisiana, that court has never decided the precise matter now in hand. But I am inclined to believe that in such a case as the present one, where the agreement was to pay interest on the moneys, it would be held under Louisiana law (as it certainly would be held in other states) that the transaction was a loan. However, it is obvious that, in order to ascertain the nature of the contract, we must look not to the law of Louisiana, but to the law of New York. Liverpool Steam Co. v. Phoenix Ins. Co., 129 U.S., at page 447, 9 Sup.Ct. 469, 32 L.Ed. 788; Am.&Eng.Ency. of Law (2d) Ed.) verbis 'Private International Law,' vol 22, p. 1322, and cases there cited. The plaintiff, a citizen and resident of New York, deposited her money in the private bank of defendant's firm in New York, the defendant being then, presumably at least, a resident of New York. Interest was to be paid on the deposits in New York, and the moneys themselves were to be paid back in New York by checks on the banks there. No plainer or stronger instance of a New York contract could be conceived. Whatever difficulties might arise in determining whether, under the law of Louisiana, the deposits constituted 'money lent,' it is perfectly plain that under the law of New York they were 'money lent.' In Phoenix Bank v. Risley, 111 U.S., at page 127, 4 Sup.Ct. 322, 28 L.Ed. 374-- a case in error to the Court of Appeals of New York-- language from the decision in the case of Marine Bank v. The Fulton Bank, 2 Wall. 252, 17 L.Ed. 785, was quoted approvingly to the effect that a bank deposit is a loan to the banker. In Davis v. Elmira Savings Bank, 161 U.S., at page 288 16 Sup.Ct. 505, 40 L.Ed. 700-- also a case in error to the Court of Appeals of New York-- it was said:

'The deposit of money by a customer with his banker is one of loan, with a superadded obligation that the money is to be paid when demanded by check;'--citing cases.

See, also, to the same effect, N.Y. County Bank v. Massey-- a New York case-- 192 U.S., at page 145, 24 Sup.Ct. 199, 48 L.Ed.-- . In Morse on Banks and Banking, Sec. 298, it is said:

'The original and every subsequent deposit by the customer is in strict legal effect a loan by the customer to the bank, and e converso every payment by the bank to or on account of the customer is a repayment of the loans

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