The Fourth Nat'l Bank of Chicago v. the City Nat'l Bank of Grand Rapids.

• Decision Date: 30 September 1873
• Citation: 1873 WL 4761,68 Ill. 398,10 N.B.R. 44
• Parties: THE FOURTH NATIONAL BANK OF CHICAGOv.THE CITY NATIONAL BANK OF GRAND RAPIDS.
• Court: Illinois Supreme Court

68 Ill. 398

1873 WL 4761 (Ill.)

10 N.B.R. 44

THE FOURTH NATIONAL BANK OF CHICAGO

v.THE CITY NATIONAL BANK OF GRAND RAPIDS.

Supreme Court of Illinois.

September Term, 1873.

APPEAL from the Circuit Court of Cook county; the Hon. ERASTUS S. WILLIAMS, Judge, presiding.

Messrs. HOWE & RUSSELL, for the appellants.Messrs. SLEEPER & WHITON, for the appellees.

Mr. CHIEF JUSTICE BREESE delivered the opinion of the Court:

This was a bill in chancery, by appellants, to enjoin a suit at law brought by the appellees against appellants, to recover the proceeds of a check drawn by one Latourette on appellants, and for which appellees had paid the money, and thereby became the owners of it in the course of business, and for value. Appellants are a banking institution in Chicago, and appellees in the city of Grand Rapids, in the State of Michigan. Latourette was a resident of the last named city, and had, on the 25th of September, 1871, obtained a discount of appellants on his note for five thousand dollars, and which sum was duly placed to his credit on their books. On the 6th of October thereafter, Latourette drew his check against a portion of these funds, for one thousand dollars, in favor of the appellees, who, on the same day, paid the cash for it, taking it in the usual course of business. The check was sent immediately to Chicago for collection, but it did not reach there in time to be presented for payment on the next day, which was Saturday. On the following day, Sunday, the memorable fire occurred, preventing the bank from doing business until the 17th of October, on which day the check was duly presented and payment refused. Appellees brought assumpsit in the circuit court to recover the amount of the check, which is the suit sought to be enjoined.

The prayer of the bill is, not only that appellees be enjoined from prosecuting this suit, but that complainants may be decreed, as against appellees, to have a just and valid lien on Latourette's deposits, to secure the payment of his note. It was also alleged that Latourette had gone into bankruptcy on or about the 8th of November, 1871, on a petition filed on October 13, and an assignee appointed, to whom was assigned all the estate of the bankrupt.

The object of the bill is, to ascertain and settle the rights of the appellants as against the appellees, the holders of the check, and the assignee in bankruptcy.

A demurrer was interposed, on which the court gave judgment for the defendant, and entered a decree dismissing the bill.

To reverse this decree an appeal is taken to this court.

The note discounted by appellants was not due, three days' grace being allowed, until the 28th day of October. The check was presented for payment on the 17th of October, on which day there were funds belonging to the drawer of the check in the bank sufficient to pay it. On the authority of Munn et al. v. Burch et al. 25 Ill. 35, we must hold, the holder of the check, who had paid value for it, was entitled to so much of this fund as the check called for, and when presented to appellants, they became the holder of the money, to the use of appellees, and were bound to account to them for that amount, unless other equities have intervened.

It is claimed by appellants, they have equities superior to those of appellees, and of such a nature as to override the legal claim of appellees. These equities are based, first, upon an alleged lien on the funds of its depositors to secure their indebtedness, whether matured or not; second, in a case of insolvency of a depositor, a right to an equitable set-off exists in...