39 F. 231 | U.S. Circuit Court for the District of Southern Ohio | 1889
(orally.) This case is before the court on an agreed statement for- instructions under the banking law. The case stated is that these two banks had mutual dealings. The First National Bank of Elk-hart claims that the Fidelity National, at the time of its failure, owed the Elkhart Bank a large sum of money, which is unpaid. The First National Bank of Elkhart sent to the Fidelity National Bank, for credit and advice, certain sight drafts and checks (charging them to the Fidelity Bank on the date they were sent) on certain persons and banks, as appears by the agreed statement of facts. The total amount of these drafts is $1,106.70. Each of them was indorsed as follows: “Pay Fidelity National Bank of Cincinnati, Ohio, or order, for collection for the First National Bank, of Elkhart, Ind. William H. Knickerbocker, Cashier.” Each of these drafts, upon its reception by the Fidelity National Bank, was credited to the First National Bank as cash, and that gave the Elkhart Bank the right to draw upon the same as cash, as had been agreed between said banks, as shown by a letter of the counsel of the Elkhart Bank, which is attached to the agreed statement of facts, and made a part thereof. This was the uniform custom and understanding of both banks. It was also their uniform custom and understanding that, when any draft should be returned to the Fidelity Bank unpaid, it should be charged back to the Elkhart Bank, and returned to it. The statement then sets forth the facts,’ which need not be given in detail, of the failure of the Fidelity National Bank on the 20th day of June, 1887, at the close of business on that day, the appointment of a receiver, and the dates when these drafts were sent out to its correspondents,—that is to say, the drafts making up the total of $1,106.70. These dates run from June 15th up to about the date of the failure of the Fidelity National Bank, the 20th of June; and all the drafts were paid after the failure of the Fidelity Bank, or, at least, all received at Cincinnati after the date of the failure, and after the bank had passed into the hands of the examiner, and they actually came into the hands of the receiver, and are in his possession now. On the 8th of January, 1888, the First National Bank of Elkhart demanded these moneys of the receiver, and he refused to comply with the demand. That is the first branch of the case, and the question presented is whether the Elkhart Bank, as to the proceeds of those drafts, stands in the position of a general creditor, or whether those proceeds, having been received, not by the Fidelity Bank, but by the receiver, should be treated as trust funds which he should, therefore, pay in full to the Elkhart Bank. It appears from the letter of counsel for the Elkhart Bank, which is attached to the statement of facts, and referred to as a portion thereof, that, prior to the negotiations between the Elkhart Bank and the Fidelity Bank, a circular was mailed to the Elkhart Bank by the Fidelity Bank, offering to collect drafts, and, upon their receipt for collection, to credit the amounts as cash to the banks sending the drafts, with the understanding that, if any draft was not collected, the amount thereof should be charged back
The second branch of the case presents a different question. It may he stated as follows: The Fidelity National Bank is indebted to the First National Bank of Elkhart, Ind., including the $1,106.70 above mentioned, in the sum of $5,861.40, about which there is no dispute. There is also a further sum of $1,873.97, composed of four collections, as follows: Fidelity, No. 60,304. Maxon & Darling note, $831.54. Due July 2, 1887. Old National Bank, Grand Ilapids, Mich. Fidelity, No. 60,305. Maxon & Darling note, $729.88. Due January 26,1887. Old National