Branch v. U.S. Nat. Bank of Omaha

• Decision Date: 03 February 1897
• Citation: 50 Neb. 470,70 N.W. 34
• Parties: BRANCH v. UNITED STATES NAT. BANK OF OMAHA ET AL.
• Court: Nebraska Supreme Court

50 Neb. 470

70 N.W. 34

BRANCH

v.UNITED STATES NAT. BANK OF OMAHA ET AL.

Supreme Court of Nebraska.

Feb. 3, 1897.

Syllabus by the Court.

1. The legal title of commercial paper indorsed “For collection” passes to the indorsee only so far as to enable him to demand and enforce payment thereon.

2. The owner of paper so indorsed may control the same until paid in full, and may intercept the proceeds thereof in the hands of an intermediate agent.

3. The mere crediting of the account of the remitting bank by a correspondent employed by it to make collections does not create, in favor of the latter, such an equity as can be interposed in defense of an action by the owner of the paper so collected for the proceeds thereof.

4. Evidence examined, and held insufficient to prove that the position of appellant, a subagent for the collection of commercial paper, has been altered to its damage through the placing of the proceeds of such paper to the credit of the bank from which it was received.

Appeal from district court, Lancaster county; Strode, Judge.

Action by Charles W. Branch against the United States National Bank of Omaha and others. From a judgment against it, the bank appeals. Affirmed.Cowin & McHugh, for appellant.

John S. Bishop, for appellee.

POST, C. J.

This was an equitable proceeding in the district court for Lancaster county, whereby the appellee, Charles W. Branch, seeks to recover the sum of $941.34 and interest, being the proceeds of a check drawn to his order by the Hamilton-Brown Shoe Company upon the Continental National Bank of St. Louis, under date of January 11, 1893. A final decree was by the district court rendered against the appellant the United States National Bank of Omaha, in accordance with the prayer of the petition, and dismissing the action as against the defendant Hayden, receiver of the Capital National Bank. The issues presented by the pleadings are fairly indicated by the findings of the district court, viz.: “That on the 13th day of January, 1893, at Lincoln, Nebraska, the plaintiff indorsed said check, and delivered it to the defendant the Capital National Bank of Lincoln, for collection, and that the said Capital National Bank received the same, for collection, as the agent of the plaintiff, without paying any consideration therefor, and stamped its collection number 15,227 on the face of said check, and entered the same on its collection register as the collection of plaintiff; that on the 14th day of January, 1893, the defendant the Capital National Bank indorsed said check to the order of M. T. Barlow, cashier of the United States National Bank of Omaha, Neb., for collection, and forwarded the same by mail to the said United States National Bank, at Omaha, Neb., as the property and collection of this plaintiff; that the defendant the United States National Bank received said check for collection, without paying any consideration therefor, on the 16th day of January, 1893, and that said United States National Bank had notice, by the collection number of the Capital National Bank thereon, and the letter of the said Capital National Bank forwarding the same, that the Capital National Bank was not the owner of the said check, but was agent of the plaintiff for the collection thereof; that on the 20th day of January, 1893, the defendant the United States National Bank collected the full amount of said check, to wit, the sum of $941.34; and that the said defendant the United States National Bank has not paid the amount it received on said check, but still has the same in its possession. The court further finds that the defendant the Capital National Bank acted as the agent of the plaintiff in making this collection, and in forwarding the same to the defendant the United States National Bank, and that said defendant the Capital National Bank never received the proceeds of said check. The court further finds that the defendant Kent K. Hayden, as the receiver of the said Capital National Bank, never received the proceeds of said check. The court further finds that the plaintiff, before the commencement of this action, demanded from the defendant the United States National Bank payment of the amount received by it as the proceeds of said check, and that said demand was refused. The court further finds that the plaintiff is not indebted to the defendant the Capital National Bank, and was not a depositor therein, and that on January 20, 1893, said Capital National Bank was insolvent, and that its doors were closed on January 21, 1893, and that on the morning of January 23, 1893, said bank passed into the hands of a United States bank examiner, and afterwards into the hands of a receiver.” In addition to the facts as above found, it appears that the check in question was by the plaintiff indorsed in blank at the time of its delivery to the Capital National Bank for collection; that said check, when received by the United States National Bank, bore upon its face the following indorsement, “Report by this No. 15,227 Capital National Bank,” and was indorsed...