Holder v. Western German Bank

• Decision Date: 15 February 1905
• Docket Number: 1,343.
• Citation: 136 F. 90
• Court: U.S. Court of Appeals — Sixth Circuit
• Parties: HOLDER v. WESTERN GERMAN BANK.

136 F. 90

HOLDER v. WESTERN GERMAN BANK.

No. 1,343.

United States Court of Appeals, Sixth Circuit.

February 15, 1905

Albert Bettinger, for plaintiff in error.

H. D Peck, Frank H. Shaffer, and J. W. Peck, for defendant in error.

Before LURTON, SEVERENS, and RICHARDS, Circuit Judges.

SEVERENS Circuit Judge.

This was an action prosecuted by the plaintiff in error to recover from the Western German Bank the sum of $4,000, being the amount of a check deposited with it for collection, and interest from March 13, 1903. The case was tried before the court without a jury. The following statement of the material facts as found by the court, and, as we think, fairly exhibited in the brief for plaintiff in error, is sufficient for the purposes of our decision:

'On the 10th day of March, 1903, the plaintiff, being the holder of a check for $4,000, drawn upon the Commercial Bank of Jacksonville, in the state of Florida, indorsed the same, 'For deposit,' and caused said check to be deposited for collection in the Western German Bank of Cincinnati, Ohio, where he was a regular depositor. Said check was received and credited subject to the conditions printed on the deposit ticket, delivered to defendant with the deposit, and in plaintiff's book in which the deposit was entered, to the effect that the Western German Bank received said check for collection only as the agent of the plaintiff, and that credit for the same would be given subject to its payment; that the bank would observe due diligence in the selection of banks or agents for the collection of the check, but should not be responsible for the failure or negligence of said banks or agents; and further, that said check was received, credited, and forwarded at depositor's risk only until satisfactory returns should be received for the same.

'On the same day that the check was deposited, viz., March 10, 1903, the officers of the Western German Bank duly forwarded said check to the First National Bank of Florida, at Jacksonville, in said state, for collection, accompanied by a letter wherein said bank was instructed to collect and return the proceeds of said check, with the further request to said First National Bank of Florida, 'Please remit New York exchange.' The First National Bank at Jacksonville, on the 13th day of March, 1903, received payment of the same, and on the same day forwarded to the Western German Bank of Cincinnati, by mail, a draft of said National Bank of Florida upon the Chemical National Bank of New York for $3,995, the amount of said check less $5 exchange or collection charges. This draft was received by the Western German Bank at the opening of business on Monday, March 16, 1903, and on the same day the First National Bank of Florida, before it could open its doors for business, was taken possession of by a receiver acting under orders of the Comptroller of the Currency, and was and is insolvent, and is now being wound up by the receiver so appointed.

'On the same day the draft was so received from the First National Bank of Florida, and before the close of business hours, defendant was first informed of the insolvency of the First National Bank of Florida, and of the fact of its having been taken possession of by a receiver. The Western German Bank forthwith forwarded the draft to New York for collection, but the Chemical National Bank, upon which the draft was drawn, acting under orders from the receiver of the First National Bank of Florida, refused payment of the draft, and, although defendant afterwards demanded payment from the receiver, and made all reasonable efforts to collect said draft, the same remains wholly unpaid.

'The court further finds that it is, and was at the time of the receipt of this check by defendant for collection, a general and uniform custom among banks and bankers of the United States to remit, in the absence of instructions to the contrary, the proceeds of checks, drafts, notes, and other instruments sent to them for collection by means of drafts or bills of exchange drawn upon banks located in the larger cities of the country, and that a great majority, probably three-fourths, of all remittances, are made by means of drafts upon banks located in the city of New York.'

The court's conclusion of law upon these facts was:

'That the Western German Bank, in requesting said First National Bank to remit in New York exchange, did not exceed its

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