First Huntington Nat. Bank v. Salt Lick Deposit Bank

• Decision Date: 13 May 1932
• Docket Number: No. 5906.,5906.
• Citation: 58 F.2d 553
• Parties: FIRST HUNTINGTON NAT. BANK v. SALT LICK DEPOSIT BANK.
• Court: U.S. Court of Appeals — Sixth Circuit

58 F.2d 553 (1932)

FIRST HUNTINGTON NAT. BANK v. SALT LICK DEPOSIT BANK.

No. 5906.

Circuit Court of Appeals, Sixth Circuit.

May 13, 1932.

George Martin, of Catlettsburg, Ky. (Martin & Smith, of Catlettsburg, Ky., Fitzpatrick, Brown & Davis, of Huntington, W. Va., on the brief), for appellant.

Robert H. Winn., of Mt. Sterling, Ky., for appellee.

Before MOORMAN, HICKS, and HICKENLOOPER, Circuit Judges.

HICKENLOOPER, Circuit Judge.

The only question presented by this appeal is whether the amended petition of the plaintiff below states a cause of action. Although an answer and reply had been filed, the action was dismissed as upon demurrer to the petition. The parties have not argued, and we do not therefore consider, whether the answer of the defendant set forth facts constituting a valid defense, or whether the reply of the plaintiff properly raised any issues of fact or law.

The petition as amended sets forth in substance that prior to maturity the plaintiff, First Huntington National Bank, became the owner of a certain promissory note made or executed by the Salt Lick Lumber Company, a Kentucky corporation, dated March 21, 1925, payable to Ritter-Burns Lumber Company, a West Virginia corporation, three months after date, in the sum of $5,577.12; that prior to maturity this note was forwarded to the First National Bank of Cincinnati, Ohio, to be in turn forwarded for collection to the bank where said note was payable, to wit, Salt Lick Deposit Bank, defendant; and that, by an understanding and agreement between the First National Bank of Cincinnati and the plaintiff, the First National Bank of Cincinnati was to act, and did act, only as the agent of the plaintiff in forwarding the item for collection, with power and authority to select for and on behalf of the plaintiff an agent to make collection, being obligated only to exercise care in the selection of such agent, and not assuming or agreeing to assume any liability growing out of the negligence or default of any agent to whom it might forward the item. The petition further alleges negligence of defendant, Salt Lick Deposit Bank, in failing to present the note for payment or to notify the maker upon maturity, and in failing to give proper notice of dishonor and protest to the indorser, Ritter-Burns Lumber Company; that the maker of the note "is now insolvent;" that no part of said note has been paid except the sum of $1,960.77, which amount was paid to plaintiff by the receiver of the maker; that the Ritter-Burns Lumber Company was then and is now solvent, but that it was discharged from liability as indorser by reason of the negligence of the defendant; and that, by reason of said facts, the plaintiff has been damaged in the sum of $5,577.12, with interest thereon from June 21, 1925, subject to a credit of $1,960.77 as of July 15, 1927, for which judgment is prayed.

One objection raised to the sufficiency of the allegations of this petition is that it does not contain an express allegation that the note is now wholly worthless, or that no part of the unpaid balance is collectible, by suit or otherwise, from the maker; and thus it is urged that the fact of damage due to the negligence of defendant does not appear. If liability of the defendant to the plaintiff for negligence in handling the collection be conceded, we think that it is clearly to be inferred from the amended petition as a whole that the unpaid balance is now wholly uncollectible. But, even though this were not so, we think that the allegations of the amended petition are sufficient. The measure of damages for negligence of a bank in failing to present a bill or note for...