Atlantic Nat. Bank of Jacksonville v. Pratt
| Decision Date | 26 April 1928 |
| Parties | ATLANTIC NAT. BANK OF JACKSONVILLE v. PRATT. |
| Court | Florida Supreme Court |
Suit by the Atlantic National Bank of Jacksonville against Fredrick R. Pratt, as receiver of the Bank of South Jacksonville. From an order sustaining a demurrer to the complaint, complainant appeals.
Reversed.
Syllabus by the Court
Bank held, under circumstances, entitled to preference as to collections remitted by collecting bank's check, not paid because of insolvency. Where A bank remits to B bank several items of negotiable paper 'for collection and remittance according to the custom and understanding between' the banks, viz., that B bank should remit to A bank 'the amount of money collected each day on the day the same was collected,' and B bank collects the several items from other banks or persons and remits to A bank checks of B bank on other banks for the amounts of the collections, but such checks are not paid in due course because of the failure of B bank after making the collections and after remitting its checks therefor, but before the checks of B bank are paid and there was no commingling of funds by consent and no reciprocal accounts or deposits between the two banks, B bank having an account with a balance to its credit with A bank but a bank having no account with B bank, A bank is entitled to a preference in payment by the receiver of B bank for the collections made.
Appeal from Circuit Court, Duval County; George Couper Gibbs, judge.
Baker Baker & Rutherford, of Jacksonville, for appellant.
Walter F. Rogers and Thomas K. Shuff, Jr., both of Jacksonville, for appellee.
The amended bill of complaint, in effect, alleges that the bank of South Jacksonville was the regular correspondent of the complainant, the Atlantic National Bank; that on January 10 1927, and January 11, 1927, the complainant sent to the Bank of South Jacksonville, 'for collection and remittance in accordance with the usual custom between' the two banks checks and other items payable by and at or drawn on the Florida Southside Bank; that on December 31, 1926, complainant sent to the South Jacksonville Bank, 'for collection and remittance,' a draft due January 10, 1927; that on January 10, 1927, the draft was paid to the Bank of South Jacksonville by check on the Florida Southside Bank; that on the 11th and 12th of January, 1927, the Bank of South Jacksonville collected from the Florida Southside Bank all of said items or checks, and collected and actually received from the Florida Southside Bank $11,171.70 in payment for said items and checks; that the said Bank of South Jacksonville sent complainant in payment of said items its checks or drafts payable to complainant, drawn on its New York correspondent and on complainant, and at the same time sent complainant its checks or drafts drawn on the Barnett National Bank of Jacksonville, a national banking corporation, on the People's Bank of Jacksonville, to make good its check or draft on complainant; that said checks or drafts drawn on the said Barnett National Bank of Jacksonville and on said People's Bank of Jacksonville were each dishonored by the said bank refusing to pay the same, and said New York draft was likewise dishonored; the said Bank of South Jacksonville did not have the funds to its credit with complainant to pay the check or draft drawn on complainant unless the checks or drafts drawn on the said Barnett National Bank of Jacksonville and the said People's Bank of Jacksonville were paid; that on the 13th day of January, 1927, the said Bank of South Jacksonville closed its doors; Fredrick R. Pratt was appointed receiver for said bank; that the said Bank of South Jacksonville is insolvent and was insolvent both at the time it received and at the time it collected the aforesaid checks from the said Florida Southside Bank, and complainant did not know that the said Bank of South Jacksonville was insolvent at said time; that complainant has made demand on the defendant receiver for the said sum of $11,171.70 as preferential claim, payable before the unsecured claims against the said Bank of South Jacksonville are paid. Complainant further claims that it has a preference on the assets of the said Bank of South Jacksonville for the payment of the items herein mentioned, but the defendant, as receiver as aforesaid, has...
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