Banque Worms v BankAmerica International: Difference between revisions
Amwelladmin (talk | contribs) m Amwelladmin moved page Banque Worms v Bank America to Banque Worms v BankAmerica |
Amwelladmin (talk | contribs) No edit summary |
||
| Line 3: | Line 3: | ||
On 10 April 1989, at 12:36 am, Spedley instructed its bank, SPI, to wire the total amount due to the Banque at its BankAmerica International account. By 3:37 am the same day – not three hours later – Spedley had a change of heart and instructed SPI to stop payment to Banque Worms and instead make a payment in the same amount to National Westminster Bank USA.” | On 10 April 1989, at 12:36 am, Spedley instructed its bank, SPI, to wire the total amount due to the Banque at its BankAmerica International account. By 3:37 am the same day – not three hours later – Spedley had a change of heart and instructed SPI to stop payment to Banque Worms and instead make a payment in the same amount to National Westminster Bank USA.” | ||
You won’t believe this, but notwithstanding the second instruction SPI went ahead and wired the full amount to BankAmerica. Can you imagine it? | You won’t believe this, but notwithstanding the second instruction SPI went ahead and wired the full amount to BankAmerica. Can you imagine it? About two hours after ''that'' SPI informed BankAmerica of the mistake and asked for the money back. ''Assuming that BankAmerica would send the money back'',<ref>Don’t ''arseyoume'', kids: it makes an “arse” out of “you” and “me”. Actually, given that its first instruction was in breach of mandate, it was obliged to send the money to NatWest whether it got it back or not.</ref> SPI then sent the exact same amount to National Westminster Bank USA as well. | ||
Banque Worms refused to return the money and invoked the famous [[discharge-for-value defense]]: it was a creditor with a right to the payment from Spedley. | |||
SPI argued that it was entitled to a return of the payment under restitutionary principles unless Banque Worms had relied on the payment to its detriment, and it hadn’t. The New York Court of Appeals considered that section 14 of the ''Restatement of the Law of Restitution''’s description of the discharge-for-value defense as applying in the case. That provides: | |||
{{quote|{{Restatement of Restitution Section 14}}}} | |||
{{sa}} | |||
*[[discharge-for-value defense]] | |||
*[[Revolving credit facility]] | |||
{{a|casenote|}}Banque Worms involved a [[revolving credit facility]] between Spedley and the Banque. In 1989 the Banque Worms informed Spedley that it would not be renewing the [[revolver]] and demanded payment of the outstanding balance on April 10, 1989. | |||
On 10 April 1989, at 12:36 am, Spedley instructed its bank, SPI, to wire the total amount due to the Banque at its BankAmerica International account. By 3:37 am the same day – not three hours later – Spedley had a change of heart and instructed SPI to stop payment to Banque Worms and instead make a payment in the same amount to National Westminster Bank USA.” | |||
You won’t believe this, but notwithstanding the second instruction SPI went ahead and wired the full amount to BankAmerica. Can you imagine it? About two hours after ''that'' SPI informed BankAmerica of the mistake and asked for the money back. ''Assuming that BankAmerica would send the money back'',<ref>Don’t ''arseyoume'', kids: it makes an “arse” out of “you” and “me”. Actually, given that its first instruction was in breach of mandate, it was obliged to send the money to NatWest whether it got it back or not.</ref> SPI then sent the exact same amount to National Westminster Bank USA as well. | |||
Banque Worms refused to return the money and invoked the famous [[discharge-for-value defense]]: it was a creditor with a right to the payment from Spedley. | |||
SPI argued that it was entitled to a return of the payment under restitutionary principles unless Banque Worms had relied on the payment to its detriment, and it hadn’t. The New York Court of Appeals considered that section 14 of the ''Restatement of the Law of Restitution''’s description of the discharge-for-value defense as applying in the case. That provides: | |||
{{quote|{{Restatement of Restitution Section 14}}}} | |||
{{sa}} | {{sa}} | ||
*[[discharge-for-value defense]] | *[[discharge-for-value defense]] | ||
*[[Revolving credit facility]] | *[[Revolving credit facility]] | ||
Revision as of 18:06, 18 February 2021
|
The Jolly Contrarian Law Reports
Our own, snippy, in-house court reporting service.
|
Banque Worms involved a revolving credit facility between Spedley and the Banque. In 1989 the Banque Worms informed Spedley that it would not be renewing the revolver and demanded payment of the outstanding balance on April 10, 1989.
On 10 April 1989, at 12:36 am, Spedley instructed its bank, SPI, to wire the total amount due to the Banque at its BankAmerica International account. By 3:37 am the same day – not three hours later – Spedley had a change of heart and instructed SPI to stop payment to Banque Worms and instead make a payment in the same amount to National Westminster Bank USA.”
You won’t believe this, but notwithstanding the second instruction SPI went ahead and wired the full amount to BankAmerica. Can you imagine it? About two hours after that SPI informed BankAmerica of the mistake and asked for the money back. Assuming that BankAmerica would send the money back,[1] SPI then sent the exact same amount to National Westminster Bank USA as well.
Banque Worms refused to return the money and invoked the famous discharge-for-value defense: it was a creditor with a right to the payment from Spedley.
SPI argued that it was entitled to a return of the payment under restitutionary principles unless Banque Worms had relied on the payment to its detriment, and it hadn’t. The New York Court of Appeals considered that section 14 of the Restatement of the Law of Restitution’s description of the discharge-for-value defense as applying in the case. That provides:
A creditor of another or one having a lien on another’s property who has received from a third person any benefit in discharge of the debt or lien, is under no duty to make restitution therefor, although the discharge was given by mistake of the transferor as to his interests or duties, if the transferee made no misrepresentation and did not have notice of the transferor’s mistake.
See also
|
The Jolly Contrarian Law Reports
Our own, snippy, in-house court reporting service.
|
Banque Worms involved a revolving credit facility between Spedley and the Banque. In 1989 the Banque Worms informed Spedley that it would not be renewing the revolver and demanded payment of the outstanding balance on April 10, 1989.
On 10 April 1989, at 12:36 am, Spedley instructed its bank, SPI, to wire the total amount due to the Banque at its BankAmerica International account. By 3:37 am the same day – not three hours later – Spedley had a change of heart and instructed SPI to stop payment to Banque Worms and instead make a payment in the same amount to National Westminster Bank USA.”
You won’t believe this, but notwithstanding the second instruction SPI went ahead and wired the full amount to BankAmerica. Can you imagine it? About two hours after that SPI informed BankAmerica of the mistake and asked for the money back. Assuming that BankAmerica would send the money back,[2] SPI then sent the exact same amount to National Westminster Bank USA as well.
Banque Worms refused to return the money and invoked the famous discharge-for-value defense: it was a creditor with a right to the payment from Spedley.
SPI argued that it was entitled to a return of the payment under restitutionary principles unless Banque Worms had relied on the payment to its detriment, and it hadn’t. The New York Court of Appeals considered that section 14 of the Restatement of the Law of Restitution’s description of the discharge-for-value defense as applying in the case. That provides:
A creditor of another or one having a lien on another’s property who has received from a third person any benefit in discharge of the debt or lien, is under no duty to make restitution therefor, although the discharge was given by mistake of the transferor as to his interests or duties, if the transferee made no misrepresentation and did not have notice of the transferor’s mistake.
See also
- ↑ Don’t arseyoume, kids: it makes an “arse” out of “you” and “me”. Actually, given that its first instruction was in breach of mandate, it was obliged to send the money to NatWest whether it got it back or not.
- ↑ Don’t arseyoume, kids: it makes an “arse” out of “you” and “me”. Actually, given that its first instruction was in breach of mandate, it was obliged to send the money to NatWest whether it got it back or not.