Nelson v. Citizens' Bank

Headnote

Negotiable instrument — banks and banking — when certificate of deposit negotiable instrument.

Nelson v. Citizens’ Bank, 191 App. Div. 19 , affirmed.

Appeal from a judgment, entered March 24, 1920, upon an order of the Appellate Division of the Supreme Court in the first judicial department, reversing a judgment in favor of defendant entered upon a verdict directed by the court and directing judgment in favor of plaintiff.

This action was brought to recover on several written instruments, all in the same form, of which the following s a copy:

“ No. 4858 Citizens’ Bank.

“ Lexington, Tenn., Oct. 10, 1917.

“ Partin Manufacturing Co. has deposited with this bank five hundred dollars ($500.00) payable after six months without per cent, per annum interest on return of this certificate properly endorsed.

“ JOHN A. McCALL,

“ Not subject to check. A. Cashier."

The plaintiff is the assignee of the Continental Credit Trust, to which it is claimed the instruments were indorsed by the Partin Manufacturing Company, for a valuable consideration and before maturity. The defendant contends that the instruments in question are not negotiable, and are, therefore, subject to the defense pleaded, that at the time the paper was issued the Partin Manufacturing Company entered into a written agreement with the defendant, whereby the payment of the sum of money mentioned in the instruments sued upon, and the use, transfer and indorsement thereof, were made dependent and conditional upon the fulfillment of certain terms and conditions mentioned, and that this agreement was one of the considerations for which the instruments in question were issued by defendant; that the conditions were not fulfilled, and the instruments were diverted and transferred in a manner contrary to the terms of the agreement and the proceeds misapplied.