No. 1421. Precedential Processed

Watkins v. Bank of Morgan City & Trust Co.

Louisiana Court of Appeal, First Circuit · Filed June 14, 1935 · 162 So. 262

Cited by

Guillot v. Union Bank 617 So. 2d 1343 La. Ct. App. 3d Cir. 1993
Van Hoosen v. First Nat. Bank 583 So. 2d 106 La. Ct. App. 3d Cir. 1991
Dauzat v. Simmesport State Bank 167 So. 2d 681 La. Ct. App. 3d Cir. 1964
Federal Deposit Ins. Corporation v. Page 195 So. 629 La. Ct. App. 1st Cir. 1940
In Re Interstate Trust & Banking Co. 194 So. 35 La. Ct. App. 1st Cir. 1940
Federal Deposit Ins. Corp. v. Lowery 183 So. 113 La. Ct. App. 1st Cir. 1938
Hammond Box Co. v. Tangipahoa Bank & Trust Co. 169 So. 87 La. Ct. App. 1st Cir. 1936
Williams v. Bank of Morgan City & Trust Co. 162 So. 266 La. Ct. App. 1st Cir. 1935

Authorities cited

Identified automatically; this list may not be exhaustive.

Beatty v. Scudday 10 La. Ann. 404
In Re Canal Bank & Trust Co. 178 La. 961
Bloodworth v. Jacobs 2 La. Ann. 24
Nolan v. John R. Shaw & Co. 6 La. Ann. 40
Succession of Dorsey 7 La. Ann. 34
Bogert v. Egerton 11 La. Ann. 73
Morgan v. Lathrop 12 La. Ann. 257
Murdock v. Citizens' Bank 23 La. Ann. 113
Hancock v. Citizens' Bank 32 La. Ann. 590
34 La. Ann. 604 not in our corpus
Kennedy v. New Orleans Savings Institution 36 La. Ann. 1
Seixas v. Citizens' Bank 38 La. Ann. 424

Opinion text

ELLIOTT, Judge (dissenting.) These two cases are factually governed by the same law on the subject of compensation. When the obligation which Watkins owed the bank became due, there was at the same time due Watkins by the bank, subject to check, a sum of money. And when the obligation which Williams *266 owed the bank became due, there was a.t the- same time- due Williams by the bank, subject to check, a sum of money, in both cases equally liquidated and de-mandable before the bank was declared insolvent. Neither Watkins nor Williams made demand on the bank to apply the money to their credit in the bank to the payment of their notes until after the bank became insolvent, but to the end, that compensation might operate and have effect, no demand or request was necessary, because “Compensation takes place of course by the mere operation of law, even unknown to the debtors; the two debts are reciprocally extinguished, as soon as they exist simultaneously, to the amount of their respective sums.” Civil Code, arts. 2208, 2130; Act No. 64 of 1904, § 119, subd. 4. Bank of La. v. Fowler, 10 Rob. 196 , bottom of page 200; Beatty v. Scudday, 10 La. Ann. 404 ; In re Canal Bank, etc. (Intervention of Wainer), 178 La. 961, 962 , 152 So. 578 , are supporting in principle. Ruling Case Law, vol. 3, Subject Banks § 157, p. 529. Supplement; same work, same subject, p. 825, is directly supporting. A number of cases, Bloodworth v. Jacobs, 2 La. Ann. 24, 25 ; Nolan v. Shaw, 6 La. Ann. 40, p. 46 ; Succession of Dorsey, 7 La. Ann. 34, 35 ; Bogert, etc., Co. v. Egerton, 11 La. Ann. 73 ; Morgan v. Lathrop, 12 La. Ann. 257 ; Murdock & Williams v. Citizens’ Bank, 23 La. Ann. 113 ; Hancock v. Citizens’ Bank, 32 La. Ann. 590 ; Gordon & Gomila v. Müchler, 34 La. Ann. 604 , p. 606; Kennedy v. New Orleans Sav. Inst., 36 La. Ann. 1, p. 13 ; Seixas v. Citizens’ Bank, 38 La. Ann. 424, 425, p. 432 , and others are to the effect that compensation does not take place, although the two debts are equally liquidated and de-mandable, unless there be request and consent to that effect. In some of the cases, but not in all of them, it is said that compensation does not take place when it is against equity, good conscience, and contrary to the course of dealing or understanding of the parties. In some instances that would be true, but some of the cases are not based on the reason that it would be against equity, good conscience and contrary to the understanding and course of dealing between the parties to hold that the debts were extinguished by compensation. They follow, in my opinion, other cases as a precedent, without taking into account the theory on which the previous case is founded. In the present two consolidated cases, there will be no disregard of equity, good conscience, or violation of understanding as a result of the compensation. I therefore think judgment should be rendered in favor of Watkins and Williams as prayed for in their respective petitions, and dissent from the opinion of the majority of the court on that subject.