American National Bank v. Miller, 229 U.S. 517 (1913)

American National Bank v. Miller

No. 325

Argued May 9, 1913
Decided June 9, 1913
229 U.S. 517

ERROR TO THE UNITED STATES CIRCUIT COURT OF APPEALS

FOR THE SIXTH CIRCUIT

Syllabus

When a bank has performed the dual function of collecting and crediting a check, the transaction is closed, and, in the absence of fraud or mutual mistake, the transaction is equivalent to payment in usual course, as though presented to another bank and paid over the counter. National Bark v. Burkhardt, 100 U.S. 686.

While knowledge of an officer of a bank of a fact which it is his duty to declare, and not his interest to conceal, is to be treated as that of the bank; where it is his interest to conceal such knowledge, the law does not, by a fiction, charge the bank with such knowledge.

There is a presumption that an officer of a bank will disclose his knowledge of matters which affect the bank and which it is not to his personal interest to conceal, and there is also presumption that he will not disclose those matters of which he has knowledge and which it is his interest to conceal, including his own bankruptcy and indebtedness to other banks.

A bank, on which the president of another bank just before his own bankruptcy drew a check in favor of the latter, cannot, after having paid the check by crediting it to the payee bank, cancel the credit and retain the money on the ground that the payee bank is to be imputed with constructive knowledge of its president’s bankruptcy.

185 F. 338 affirmed.

The facts, which involve the right of a bank to cancel payments made on a bankrupt’s check on the ground of constructive knowledge of the bankruptcy on the part of the payee, are stated in the opinion.