Bank of Saginaw v. Title & Trust Co. of Western Pennsylvania

• Decision Date: 26 December 1900
• Docket Number: 23.
• Citation: 105 F. 491
• Parties: BANK OF SAGINAW V. TITLE & TRUST CO. OF WESTERN PENNSYLVANIA.
• Court: U.S. District Court — Western District of Pennsylvania

105 F. 491

BANK OF SAGINAW V. TITLE & TRUST CO. OF WESTERN PENNSYLVANIA.

No. 23.

United States Circuit Court, W.D. Pennsylvania.

December 26, 1900

Robinson & McKean and R. B. Ivory, for plaintiff.

Murphy & Hosack and Edward Willson Boyd, for defendant.

ACHESON Circuit Judge.

The plaintiff is a corporation of the state of Michigan, engaged in the banking business at Saginaw, in that state. The defendant is a corporation of the state of Pennsylvania doing business at Connellsville, Pa. The suit is upon six certificates of deposit issued by the defendant, and of which the plaintiff is indorsee and holder. These certificates are alike in form, and the following copy of one represents the general character of all of them: a1

The sworn statement of claim sets forth that on or about February 12, 1900, J. F. Barrows, having indorsed each of these certificates in blank in the usual manner, presented them, so indorsed, at the plaintiff's banking house in Saginaw asking that they be cashed, and that thereupon the plaintiff in the usual course of its business as a bank, received and cashed them, paying therefor full value. These allegations are not denied in the affidavit of defense, and there is no suggestion therein that the plaintiff is not a bona fide holder for value of the certificates. Upon the pleadings the plaintiff must be so regarded.

That the defendant company is authorized to receive deposits of money is conceded, but it is denied that it had lawful authority to issue such certificates as those in suit. There is, however, no statutory or other inhibition of such certificates. These certificates are in the form commonly used everywhere in the commercial world by bankers and companies receiving money deposits, and the defendant's right to issue them in the course of its business and as an incident thereto is not to be doubted. At any rate, I do not see that it is open to the defendant to raise the question.

The case, I think, turns upon the question of the negotiability of the certificates sued on. Now, that such a certificate of deposit is a negotiable instrument possessing the qualities of a negotiable promissory note was determined by the supreme court of the United States in Miller v. Austen, 13 How. 218, 228, 14 L.Ed. 119. To the same effect are the decisions of all the state courts except those of Pennsylvania. 5 Am.& Eng.Enc.Law (2d Ed.) 805. The supreme court of Pennsylvania has held that a certificate of deposit although containing negotiable words, has none of the incidents of a negotiable promissory note. Patterson v. Poindexter, 6 Watts & S. 227; Bank v. Mangan, 28 Pa.St. 452; London Sav. Fund Soc. v. Hagerstown Sav. Bank, 36 Pa.St. 498. There is, however, no statute in Pennsylvania regulating this matter, and the question here is one of general jurisprudence. That courts of the United States are not controlled by the decisions of the state courts on questions of general commercial law is authoritatively settled. Swift v. Tyson, 16 Pet. 1, 10 L.Ed. 865; Oates v. Bank, Bank of New York, 102 U.S. 14, 29, 31, 26 L.Ed. 61. Mr. Justice Bradley in Railroad Co. v. Lockwood, 17 Wall. 357, 367, 21 L.Ed. 627, said 'But on a question of general commercial law, the federal courts administering justice in New York have equal and coordinate jurisdiction with the courts of that state. ' In Brooklyn City & N.R. Co. v. National Bank of New York, supra, the question related to the legal effect of a transfer by indorsement of negotiable paper before maturity as mere security for an antecedent debt. The transaction occurred in New York, and the...