9 Ind. 217 | Ind. | 1857
Addison H. Sanders, on the first day of June, 1854, made his promissory note of that date, payable six months after date, to the Cincinnati Type Foundery Company. Subsequently, and before the note fell due, the Type Foundery Company indorsed it in blank, and delivered it to the Mechanics and Traders’ Bank of Cincinnati; which indorsement and delivery the said company now contend was for the purpose of collection only, and that they still continued to be the owner thereof. Afterwards, and before the note fell due, the Mechanics and Traders’ Bank, by its cashier, Charles Conahan, indorsed said note as follows: “Pay G. W. Rathbone, Esq., cashier, or order, Charles Conahan,” — and forwarded the note so
The reply of the plaintiff, stated in brief, is in substance, “that at the time the note was transmitted to the Evansville Branch Bank, it came duly indorsed from the Type Foundery Company to the Mechanics and Traders’ Bank, and duly indorsed by the Mechanics and Traders’ Bonk to the Evansville Branch Bank, that is, to her cashier for her use; that at the time it was received the branch bank had no notice that the note did not belong to the Mechanics and Traders' Bank, nor was any notice communicated to her to that effect, until the Mechanics and Traders’ Bank had failed; that from the time of the receipt of that note till the failure of the Mechanics and Traders’ Bank, the Evansville Branch Bank supposed said note to be the property of the Mechanics and Traders’ Bank; that ever since the year 1840, the said two banks have had continued mutual dealings with each other, and have acted as the agents of each other in the collection of notes, bills of exchange, drafts, and other evidences of indebtedness, which accounts have been settled and adjusted monthly, semiyearly, and yearly, as the convenience of themselves or
To this reply the defendant demurred. The Court sustained the demurrer, and rendered judgment for the defendant, from which judgment the plaintiff appeals.
The plaintiff contends that under the circumstances of
The objection is not made that the suit is by Rathbone, for the use of the bank, and we shall not consider the point. The main principle involved in the case is settled by authority; and we need only state the principle and cite the authority.
The principle is this: that where there have been, for a considerable period of time, mutual dealings between two banks, and an account current between them, in which they mutually credited each other with the proceeds of all paper remitted for collection, when received, and charged all costs of protest, postage, &c., — the respective accounts being regularly transmitted from one to the other and settled as accounts of the respective banks; and upon the face of the paper transmitted it always appeared to be the property of the banks respectively, remitted on their own account; and balances were generally suffered to remain until reduced by the proceeds of bills transmitted from one to the other in the usual course of business; there is a lien for a general balance of account upon the paper thus transmitted, no matter who may be its real owner. This was decided in Bank of the Metropolis v. New England Bank, 1 How. (U. S.) 234, and reaffirmed in Wilson v. Smith, 3 id. 763.
Where a principal permits his agent to hold himself out as principal, he cannot complain that third persons who dealt with him bona fide as such, hold him liable as principal. The Evansville bank, having a lien upon the paper sued on, and its proceeds, to secure the payment of the balance due it from the Mechanics and Traders’ Bank, has a right to collect the note, and hold the proceeds accordingly.
The judgment is reversed with costs. Cause remanded for a new trial.