97 Tenn. 550 | Tenn. | 1896
This is a suit to recover from defendant, as receiver of the First National Bank of Johnson City, the proceeds of a check for $1,282.50. The Chancellor granted the relief prayed and defendant appealed. The cause has been heard by the Court of Chancery Appeals, and that Court reversed the decree of the Chancellor and dismissed complainants’ bill, and they have appealed and assigned errors.
The facts are that the check in controversy was drawn by William' L. Taylor & Son, of Lafayette, Ind., on the Chase National Bank of New York, payable to Mrs. Friberg, and was indorsed by her, and delivered to the Johnson City bank on November 9, 1894. In return for the check, she received from the bank $41.71 in cash, $175 in a certificate of deposit payable to her order, and $1,065.73 in
But it is said that the bank officials were guilty of fraud in the transaction, and that Mrs. Friberg, in consequence and by reason of this fraud, has a right to reclaim the amount of the check out of the funds which the receiver collected from the New York bank after he took charge. It appears that when the Johnson City bank failed, the New York bank owed it $5,644.67, which it afterwards paid to the receiver, except a balance of $771.62. The theory of complainants is, that they have traced the proceeds of their check into the fund that was due the Johnson City bank from the New York bank, even if it cannot be further separated and identified, and, having done so, and that fund having been paid over to the receiver of the Johnson City bank after he took charge, they have a right to reclaim the amount of their check (less the cash paid them), out of this fund. This right of reclamation unquestionably exists where the fund has been kept separate and can be identified. Craigie v. Hadly, 52 Am. Rep., 11. But when it can only be traced into a general mass or fund, the question is more difficult. But we think the case must turn
Here the credit by the New York bank and the failure of the Johnson City bank occurred the same day, and it does not appear which occurred first in point of time. Under this state of facts, we must presume, in the absence of proof, and in favor of the other creditors of the bank, that the credit was given and entered before the bank failed. This being so, the right to reclaim the proceeds of the check must be considered as lost, and the decree of the Court of Chancery Appeals must be affirmed.