Laubach v. Leibert

Chief Justice Agnew

delivered the opinion of the court,

William Leibert was an individual depositor, and the liability of the bank was to him in his own right. No other could check for the money, or prevent its payment to him. The word “ assignee ” appended to his name in the account, did not earmark the fund, and gave it no identity as belonging to any particular person or fund. Assignee of whom, or for whom, or of what fund was it ? Nothing in the addition answers these questions. Leibert’s checks were therefore good for the purposes indicated on their face. The fact that they were received under protest made no difference. What right had the bank to protest ? Its duty was payment to its depositor, and the checks were sufficient vouchers. The protest could avail no one else, for it was not a trustee for another. All it could do was to pay the money to Leibert. The checks were therefore his appropriation of his deposit to the purpose expressed, of which the bank had notice when they were received. The delay in payment resulting from the refusal and protest did not change the effect of the appropriation. The money being in the hands of the bank itself, and subject to Ms draft, and the checks being an immediate appropriation of this money, operated to extinguish the notes held by the bank against Leibert. It was not a mere assignment of a fund in the hands of a third party, but a direct application of the money which the bank itself held, and was bound to pay over to him to the notes in question, and therefore the bank was bound so to apply it. On what principle can the bank with the money in its own hands, and a direction to apply it to payment, maintain suit on the notes, and recover the cash, leaving the money in its hands already appropriated, to go to payment of its other debts ? Clearly this would be grossly inequitable. The question propounded in the case stated is, whether Leibert was liable to pay the notes in cash at the suit of the bank ? The court answered this substantially correctly. The criticism on the so-called set-off is therefore unavailing.

Judgment affirmed.