CONFLICT OF LAWS-BILLS AND NOTES-LAW GOVERNING VAILIDITY OF TRANSFER OF CHECK BY INDORSEMENT

Authors

Abstract

The president of a New York corporation indorsed in blank in the corporate name a check payable to the corporation. He then indorsed the check personally and mailed it to the Banque De Bruxelles, a foreign corporation located in Belgium. The bank in Belgium received it for collection and forwarded it for collection to its correspondent in Washington, D. C. The proceeds were received by the bank in Belgium and credited to the personal account of the president of the New York corporation as directed by him. Later, he withdrew the amount from the bank for his own use. Assignees of the receiver of the New York corporation brought action against the Banque De Bruxelles to recover the amount of the check. By New York law, a bank which accepts checks of a corporation indorsed by the president thereof and credits the proceeds to his personal account is liable to the corporation for the amount of the checks unless such act is authorized or the corporation is negligent or has otherwise deprived itself of its right to recover against the bank. Wagner Trading Co. v. Battery Park National Bank, 228 N. Y. 37, 126 N.E. 347, 9 A. L. R. 340. By the law of Belgium, as pleaded and proved, no such liability is imposed on a bank. Held, that the defendant bank was liable. The court reasoned that the defendant was the banking agent of the president of the New York corporation and since the proceeds of the check were collected in Washington, D. C., the law governing the transaction should be the law of Washington, D. C., which, in the absence of proof to the contrary, was assumed to be the same as that of New York. Weissman v. Banque De Bruxelles (N. Y. 1930) 173 N.E. 835.

Recommended Citation

CONFLICT OF LAWS-BILLS AND NOTES-LAW GOVERNING VAILIDITY OF TRANSFER OF CHECK BY INDORSEMENT, 29 Mich. L. Rev. 928 (1931).
Available at: https://repository.law.umich.edu/mlr/vol29/iss7/16