Bank of Marin v. England

PETITIONER: Bank of Marin
RESPONDENT: England
LOCATION: Samuel Spevack's Office

DOCKET NO.: 63
DECIDED BY: Warren Court (1965-1967)
LOWER COURT: United States Court of Appeals for the Ninth Circuit

CITATION: 385 US 99 (1966)
ARGUED: Oct 20, 1966
DECIDED: Nov 21, 1966

Facts of the case

Question

Media for Bank of Marin v. England

Audio Transcription for Oral Argument - October 20, 1966 in Bank of Marin v. England

Earl Warren:

Number 63, Bank of Marin, petitioner versus John M. England trustee of bankruptcy.

Mr. Washburn.

Edgar B. Washburn:

Mr. Chief Justice, may the Court please.

The sole issue that is presented in this case is whether a bank which honors the checks of a depositor is to be held responsible to a trustee in bankruptcy or the depositor if the bank honored the checks after the depositor has filed a voluntary petition in bankruptcy and where the bank had no notice of the bankruptcy.

The facts of this matter are --

Potter Stewart:

No notice and no knowledge.

Edgar B. Washburn:

No notice and no knowledge.

The facts are virtually undisputed.

Between August 27th and September 17th 1963, Marin Seafoods drew and delivered five checks on its commercial count with the Bank of Marin.

These checks were delivered to Eureka Fisheries.

On September 26th, 1963, Marin Seafoods filed a voluntary petition of bankruptcy in the District Court.

Four days later, John M. England was appointed receiver and on October 20th, 1963, he became the trustee.

On October 2nd, 1963, the checks which had previously been drawn and delivered were presented by Eureka Fisheries to the bank for payment.

As of this date, the bank had no notice and no knowledge for the bankruptcy.

There were sufficient funds on deposit.

The bank therefore honored the checks.

Subsequently, the trustee applied to the referee in bankruptcy for a turnover order.

The referee held that the bank and the payee of those checks were jointly responsible to the trustee for the amount of the checks.

Subsequently the payee paid the judgment and has now sought contribution against the bank.

After that occurred the bank petition for review in the District Court ultimately appealed to the Court of Appeals.

In the Court of Appeals, it was held that the lack of notice afforded no protection to the bank because of the wording of Section 70a and 70d of the Bankruptcy Act.

As the contention of the petitioner, Bank of Marin that the application of these two Sections of the Bankruptcy Act by the Court of the Appeals violates due process in two regards.

Firstly, it's requiring the bank who had previously satisfied its obligation to its depositor to satisfy this obligation without notice a second time.

As a part of that same contention is the second question is that the bank is being compelled to pay the same debt twice.

When the checks were originally presented for payment the bank was discharging its legal obligation to its depositor by honoring the checks.

If the bank is to be compelled to satisfy this obligation again to the trustee, we contend that the bank is in fact being compelled -- pay twice.

Is your argument -- is only the (Inaudible)?

Edgar B. Washburn:

No Your Honor.

The -- in addition to our constitutional argument, we feel that the Bankruptcy Act can there -- very reasonably be construed to protect the bank and that this Court need not rule on the constitution argument.

We feel firstly that Section 70d(5), the last sentence in that particular Section which provides that nothing in this Title shall impair negotiability, or currency or negotiable instruments.