Hobart Nat. Bank v. McMurrough

• Decision Date: 13 July 1909
• Citation: 103 P. 601,24 Okla. 210,1909 OK 173
• Parties: HOBART NAT. BANK v. McMURROUGH.
• Court: Oklahoma Supreme Court

103 P. 601

24 Okla. 210, 1909 OK 173

HOBART NAT. BANK v. McMURROUGH.

Supreme Court of Oklahoma

July 13, 1909

Syllabus by the Court.

M delivering a check to H. Bank on April 27, 1903, on I. Bank in the sum of $314.50, with the understanding that said sum would be immediately placed to his credit in the former bank and that he could check against same, at the time of the delivery of the check to H. Bank he checked against same in the sum of $50; H. Bank transmitting said check to its correspondent, C. Bank, charging said item against and receiving credit in a like sum in said bank as a cash item said C. Bank in turn transmitting said check to its correspondent bank at G., charging said sum to said bank as a cash item, said bank at G. transmitting said check to the drawee bank by mail for remittance thereon. On May 12, 1903 said check was canceled by said drawee bank, and the amount of same charged against the account of M. On June 2, 1903, H. Bank was notified by the bank at G., through C. Bank, that it had no response from the drawee bank; said H. Bank notifying M. of such information, without returning or offering to return said check. In the meantime I. Bank failed. Held, that H. Bank was the owner of said check for value, and liable to M. for loss on account of such laches.

A check is a bill of exchange upon a bank or banker, payable on demand without interest.

Error from District Court, Kiowa County; F. E. Gillette, Judge.

Action by T. H. McMurrough against the Hobart National Bank. Judgment for plaintiff, and defendant brings error. Affirmed.

L. M. Keys and N. Rummons, for plaintiff in error.

G. A. Brown, for defendant in error.

WILLIAMS J.

In this case, on the 27th day of April, 1903, the plaintiff in error received the check on the Indiahoma Bank in the sum of $248 in satisfaction of the note, on which there was a balance due in that amount, secured by the mortgage, and the other check in the sum of $314.50, at least with the implied understanding that said amount might be checked against by the defendant in error, for at the time that the checks were received and credited on the account of the defendant in error, he checked against such account in the sum of $50, and also prior to the time that plaintiff, to wit, June 2, 1903, advised him that there were any infirmities in either of said checks, the defendant in error checked again against the same in the further sum of $50. These checks on the Indiahoma Bank were indorsed and transmitted to the Citizens' National Bank of Chickasha; the plaintiff in error receiving credit therefor on its account with said bank. Then in turn they were indorsed by the Chickasha Bank and transmitted to the Capitol National Bank, of Guthrie, where the Chickasha Bank received credit therefor; the plaintiff in error drawing on its credited balance as it desired in the Chickasha Bank.

A "check" being a bill of exchange upon a bank or banker, payable on demand without interest (chapter 54, art 4, § 113 [section 3703], Wilson's Rev. & Ann. St. 1903), when the plaintiff in error received the two checks on the Indiahoma Bank, canceling and surrendering up the note and chattel mortgage for the check for $248, and then and there permitting the defendant in error to check against the other check in the sum of $50, and thereafter, on, to wit, May 29, 1903, and prior to the discovery of the infirmity in the $314.50 check, again in the sum of $50, the plaintiff in error became the owner of the $314.50 check for value. In the case of Noble et al. v. Doughten, 72 Kan. 344, 83 P. 1050, 3 L. R. A. (N. S.) 1167, the court said: "The payee indorsed the check and deposited it in the Philadelphia Bank, with which it was in the habit of dealing, according to the business forms under which transactions of that character are usually conducted. The legal effect of such conduct, where no reservations are made or limitations are imposed by either party, and no agreement or understanding appears other than that which the law implies, is well settled by the best-considered cases. When the payee of the check received credit for it, the bank became indebted to him in a sum equal to the amount of the credit, his funds in the bank subject to the immediate withdrawal upon his check were augmented to the same extent, the check itself became the property of the indorsee, and the payee's relation to it became that of one who had transferred title to it by indorsement. If the depositor had desired to establish the relation of principal and agent...