Corn Exchange Nat Bank v. Locher

• Decision Date: 13 February 1907
• Docket Number: 484.
• Parties: CORN EXCH. NAT. BANK v. LOCHER et al.
• Court: U.S. Court of Appeals — Third Circuit

151 F. 764

CORN EXCH. NAT. BANK v. LOCHER et al.

No. 484.

United States Court of Appeals, Third Circuit.

February 13, 1907

H Gordon McCouch, for appellant.

Malcolm Lloyd, Jr., for appellees.

Before DALLAS, GRAY, and BUFFINGTON, Circuit Judges.

DALLAS Circuit Judge.

The Eastern Milling & Export Company of Pennsylvania executed and delivered to the Corn Exchange National Bank a certain paper dated January 22, 1903, in which there was a clause as follows:

'In consideration of granting any credit by said bank, the undersigned agree that in case of failure or insolvency on the part of the undersigned, or in the event of it appearing at any time that any of the following representations are untrue, or in case of the occurrence of such change as aforesaid, or in failure to notify such change as above agreed, all or any of the claims or demands against the undersigned held by said bank shall, at the option thereof immediately become due and payable; and it is hereby understood and agreed that all moneys, funds, stocks, bonds, notes, and other property in the hands of the said bank, belonging to the undersigned, may at all times, at the option of the bank, be held and appropriated by said bank to the payment of all notes, indorsements, obligations, or indebtedness in any form, matured or unmatured, made by the undersigned, which the said bank may hold. Further, that the exercise of or omission to exercise such option or options in any instance shall not waive or affect any other or subsequent right to exercise the same.'

On May 11, 1903, the milling company became debtor to the bank upon a promissory note at 60 days for $4,500, with which nine $1,000-mortgage bonds of the milling company were pledged as collateral. On July 3, 1903, the milling company, then having credit with the bank as a depositor for $554.54, issued its check for $500, which was presented upon the same day and payment thereof was refused, but not upon the ground that the bank had made the appropriation of the milling company's balance which it now claims it had a right to make. On July 6, 1903, a receiver was appointed for the milling company because of its insolvency, and on July 11, 1903, its $4,500-note fell due; but the books of the bank continued to show a deposit credit to the milling company of $554.54, down to February 9, 1904, when a charge of that amount was entered against its deposit account, and a...