Mechanics’ & Metals Nat’l Bank v. Ernst, 231 U.S. 60 (1913)
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General SummaryThis case is from a collection containing the full text of over 16,000 Supreme Court cases from 1793 to the present. The body of Supreme Court decisions are, effectively, the final interpretation of the Constitution. Only an amendment to the Constitution can permanently overturn an interpretation and this has happened only four times in American history.
Mechanics’ & Metals Nat’l Bank v. Ernst, 231 U.S. 60 (1913)
Mechanics’ & Metals National Bank v. Ernst No. 44 Argued October 20, 1913 Decided November 3, 1913 231 U.S. 60
APPEAL FROM THE CIRCUIT COURT OF APPEALS
FOR THE SECOND CIRCUIT
Syllabus
National City Bank v. Hotchkiss, ante, p. 50, followed to effect that the delivery by the bankrupt of securities to a bank to secure a clearance loan constituted an illegal preference.
This Court approves the findings of the court below that the bank knew of the impending bankruptcy when it demanded and accepted security for an existing loan.
An unusual proceeding in the banking business, such as an officer’s leaving the bank and going to the customer’s office and demanding additional security for a loan made earlier the same day, indicates knowledge of the impending bankruptcy of such customer.
A general promise to give security on demand puts the creditor in no better position than an agreement to pay money, and does not justify a delivery of securities after knowledge of impending bankruptcy. It is an illegal preference.
A deposit made after the bank’s officers have forbidden payment of checks against the bankrupt’s deposit account is a payment and a preference, and a set-off cannot be allowed.
200 F. 295 affirmed.
The facts, which involve the determination of the question of whether the delivery of securities by a broker immediately preceding his bankruptcy to a bank to secure its loan was an illegal preference, are stated in the opinion.
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Chicago: U.S. Supreme Court, "Syllabus," Mechanics’ & Metals Nat’l Bank v. Ernst, 231 U.S. 60 (1913) in 231 U.S. 60 231 U.S. 65. Original Sources, accessed November 24, 2024, http://originalsources.com/Document.aspx?DocID=E6DIT232CNJAVAN.
MLA: U.S. Supreme Court. "Syllabus." Mechanics’ & Metals Nat’l Bank v. Ernst, 231 U.S. 60 (1913), in 231 U.S. 60, page 231 U.S. 65. Original Sources. 24 Nov. 2024. http://originalsources.com/Document.aspx?DocID=E6DIT232CNJAVAN.
Harvard: U.S. Supreme Court, 'Syllabus' in Mechanics’ & Metals Nat’l Bank v. Ernst, 231 U.S. 60 (1913). cited in 1913, 231 U.S. 60, pp.231 U.S. 65. Original Sources, retrieved 24 November 2024, from http://originalsources.com/Document.aspx?DocID=E6DIT232CNJAVAN.
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