First Nat. Bank v. Coates

• Decision Date: 01 January 1881
• Parties: FIRST NAT. BANK OF CINCINNATI v. COATES and another. THIRD NAT. BANK OF CINCINNATI v. SAME. COMMERCIAL BANK OF CINCINNATI v. SAME. RENO COUNTY STATE BANK v. SAME.
• Court: U.S. District Court — Western District of Missouri

8 F. 540

FIRST NAT. BANK OF CINCINNATI v. COATES and another.

THIRD NAT. BANK OF CINCINNATI v. SAME.

COMMERCIAL BANK OF CINCINNATI v. SAME.

RENO COUNTY STATE BANK v. SAME.

United States Circuit Court, W.D. Missouri, Western Division.

1881

Gage &amp Ladd, for complainants.

Pratt Brumback & Ferry, for defendants.

The Martin Bank carried on business at Kansas City, and between July 25 and August 2, 1878, made and delivered to the complainants in these cases its drafts or checks on the Metropolitan National Bank, of New York. They were in the following form, the only difference being in number, date amount, and name of payee:

'STATE OF MISSOURI.

'$714.65. THE MARTIN BANK, NO. 196,104.

'KANSAS CITY, MO., JULY 30, 1878.

'Pay to the order of Theo. Stanwood, Cashier, $714.65.

'D. O. SMART, Vice President.

'To Metropolitan National Bank, New York.'

The drawer bank failed, and on August 3, 1878, made an assignment under the laws of Missouri to the defendant Coates, of all its property and effects, for the equal benefit of all its creditors. The first notice which the Metropolitan National Bank received of the assignment was on the morning of August 5th, when it received a telegram from Coates which simply stated that fact. At that time the Metropolitan Bank had in its hands, on deposit to the credit of the Martin Bank, about $56,000. The two banks had for many years been correspondents, and most of the New York exchange sold by the Kansas City Bank had been on the Metropolitan Bank. After this notice of the assignment the latter bank paid none of the drafts drawn on it. The drafts belonging to the complainants were presented on the fifth, sixth, and seventh days of August. Payment of these was refused and they were protested.

In September the Metropolitan Bank turned over to Coates, as assignee, the moneys in its hands. In accordance with the law of Missouri governing voluntary assignments, the assignee gave notice that he would, on certain days, sit for the allowance of demands against the estate, on which days creditors were required to appear and present their claims. The complainants appeared, presented their drafts, which were allowed by the assignee as general demands, without objection on their part, and they afterwards received from him two dividends, which were declared alike on all claims against the estate. Subsequently, these bills were filed to compel the assignee to pay to the complainants the full amount of the drafts out of the moneys in his hands which he had received from the Metropolitan National Bank. About $80,000 of drafts drawn by the Martin Bank on the Metropolitan National Bank were outstanding and unpaid, but actions of this character for about $22,000 only, had, at the time of this hearing, been begun. On the hearing it was insisted on behalf of the assignee that the complainants were general creditors of the bank; that the funds received by him from the New York bank were a part of the general assets of the Martin Bank; and, further, that having presented and obtained from the assignee a general allowance of their demands, on which they had accepted dividends, they had thus elected to be considered general creditors, and that such election prevented a recovery here, based on the assertion of a different remedy.

MILLER Justice, (orally.

) My first impression was that the paper which is called indifferently a draft, a bill, a check, and on which these actions are founded, was in the nature of a bill of exchange or draft, and not in the nature of a bank check; but the authorities looked at satisfied me that I was wrong. Even an inland bill of exchange is payable on demand, without days of grace, and is a check of one bank on another, and whatever may have been my original idea as to whether it was a bill of exchange or a check, the authorities have settled that, and I must say it is a bank check. I think the authorities have also settled, perhaps not with unanimity, but with such weight as...