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Stephen Patton
Legal Brief #1

1. Case Name, Citation, and Court
Siegel v. New England Merchants National Bank, 386 Mass. 672, 437 N.E.2d 218, Web 1982 Mass. Lexis 1559 (Supreme Judicial Court of Massachusetts)

2. Key Facts
A. David Siegel maintained a checking account with New England Massachusetts National Bank. B. On September 14, Siegel drew and delivered a $20,000 check payable to Peter Peters. C. The check was dated November 14.

D. Peters deposited the check in his personal banking account. E. On September 17, the bank paid the check and charged it against Siegel's account. F. Siegel discovered that the check had been paid and informed the bank that the check was postdated for November 14.

G. Siegel demanded the funds be returned to his account and the bank refused. H. The bank refused to refund the $20,000 and Siegel sued for wrongful debit of his account.

3. Issue
Is the bank required to refund Siegel's money because the check was postdated for November 14?

4. Rule
Commercial Code 542 (2d ed. 1980). If the depositor were permitted to retain benefits, and recover the amount of the check as well, he would profit at the bank's expense. Therefore, Section 4-407 provides that upon payment, the bank is "subrogated" to any rights prior holders may have had against the drawer-depositor, on either the check or the initial underlying transaction, and to any rights the drawer may have against the payee or other holders. G. L. c. 106, Section 4-407.

5. AnalysisThe Supreme Court held that:A. The check was a negotiable instrument. B. The Check was not payable until November 14.
C. The bank was negligent in paying it before that date.
D. The bank had no right to debit Siegel's account.
E. Siegel had not waived his rights or ratified the bank's action and was not estopped from demanding the $20,000. F. The wrongful debit caused Siegel a loss of $20,000.
6. ConclusionThe Supreme Court held that New...
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