The Meridian National Bank of Indianapolis v. The First National Bank of Shelbyville

• Decision Date: 24 June 1893
• Docket Number: 600
• Citation: 34 N.E. 608,7 Ind.App. 322
• Parties: THE MERIDIAN NATIONAL BANK OF INDIANAPOLIS v. THE FIRST NATIONAL BANK OF SHELBYVILLE
• Court: Indiana Appellate Court

34 N.E. 608

7 Ind.App. 322

THE MERIDIAN NATIONAL BANK OF INDIANAPOLIS v. THE FIRST NATIONAL BANK OF SHELBYVILLE

No. 600

Court of Appeals of Indiana

June 24, 1893

7 Ind.App. 322. At 335.

Original Opinion of February 1, 1893, Reported at: 7 Ind.App. 322.

Petition for rehearing overruled.

OPINION

ON PETITION FOR A REHEARING.

GAVIN C. J.

Counsel for appellant have filed quite an earnest petition for rehearing, in which they assail the proposition of the original opinion that the appellee, if a bona fide assignee by indorsement for value, took the certified check freed from any equities existing between the original parties. They assert the opinion to be in direct conflict with the case of Parke v. Roser, 67 Ind. 500.

We have examined the case carefully, as we did in the former hearing and are unable to see the slightest conflict between the holding in this case and the decision in that. There no such question as here presented was under consideration. That case simply holds that the certifying bank does not guaranty the genuineness of the body of the check, following the Marine Bank v. Nat'l City Bank, 59 N.Y. 67.

This was the only question before that court for its determination. A careful re-examination of the brief of counsel for appellants shows that they themselves did not controvert their liability, if the appellee was a bona fide holder for value and by indorsement. Their claim was that there was no legal and valid indorsement, and that therefore the check was subject to equities, relying upon Freund v. Importers, etc., Bank, 76 N.Y. 352, and kindred cases.

To show their position upon this subject, we quote from their brief, somewhat in addition to what was set out in the original opinion:

"It follows, therefore, that Stockton, Gillespie & Co. could countermand payment at any time of this check, so long as it remained out in the hands of the thief, or any other person taking it with notice. Or to put the proposition from the other side, until the check comes in due course of business to the hands of a bona fide holder for value without notice, neither the maker or the banker can be compelled to pay a check given for stolen cattle, or otherwise invalid."

In support of their claim, appellants quoted also the following from the case of Goshen Nat'l Bank v. Bingham (118 N.Y. 349, 23 N.E. 180), 23 N.E. 180:

"It is too well settled by authority, both in England and in this country, to permit of questioning, that the purchaser of a draft or check who obtains title without an indorsement by the payee holds it subject to all equities and defenses existing between the original parties, even though he has paid full consideration, without notice of the existence of such equities and defenses." (Citing very many cases.) "The reasoning on which this doctrine is founded may be briefly stated as follows: The...