Banque Worms v. BankAmerica International
New York Court of Appeals
570 N.E.2d 189 (1991)
Spedley Securities told its bank, Security Pacific (plaintiff), to wire almost $2 million to Banque Worms (defendant) at BankAmerica (defendant). Hours later, before the transfer went through, Spedley told Security to stop that payment and instead wire the same amount elsewhere. Security mistakenly sent both wires, debiting Spedley's account twice even though it lacked funds to cover both. Spedley collapsed into involuntary liquidation, and Security sued Banque Worms and BankAmerica to recover the mistaken wire. BankAmerica settled; the case proceeded against Banque Worms, and the Second Circuit certified to the New York Court of Appeals whether New York recognizes a "discharge for value" rule.
Whether, under New York law, a beneficiary that receives money in payment of a debt through a mistaken wire transfer has a duty to repay the funds when the beneficiary did not know the transfer was erroneous.