In re Armstrong

• Citation: 33 F. 405
• Parties: In re ARMSTRONG.
• Decision Date: 01 January 1887
• Court: U.S. District Court — Southern District of Ohio

33 F. 405

In re ARMSTRONG.

United States Circuit Court, S.D. Ohio, Western Division.

1887

E. W Kittredge and W. P. Burnet, Dist. Atty., for receiver.

JACKSON J.

The petition of the receiver sets out the following state of facts, on which the instructions of the court are asked viz.: On the eighteenth day of May, 1887, the Winters National Bank of Dayton, Ohio, being the holder and owner of a certain note for $2,000 made by L. H. Lee & Bro., of Baltimore, Maryland, dated March 17, 1887, payable three (3) months after date at the Third National Bank of Baltimore, to the order of Whitely, Fassler & Kelley, and by them indorsed to said Winters National Bank, forwarded the same to the Fidelity National Bank of Cincinnati for collection and credit, placing on the note the following special indorsement: 'Pay Fidelity National Bank, Cincinnati, O or order, for collection for account of the Winters National Bank, Dayton, Ohio. J. C. REBER, Cashier. ' The Fidelity National Bank forwarded the note to the Drovers' &amp Mechanics' National Bank of Baltimore for collection, and on the twentieth day of June, 1887, the day of its maturity, it was paid by the makers, and the amount thereof was on the same day credited on the books of the Drovers' & Mechanics' National Bank to the Fidelity National Bank. On the morning of June 21, 1887, before receiving any advice of the payment of said note, and before any credit was given on its books to the Winters National Bank for said note, or for the amount collected thereon by its correspondent, the Fidelity National Bank was closed by officers of the treasury department as insolvent, and its assets placed in the hands of David Armstrong, as receiver. No charge was made of the amount of said note to the Drovers' & Mechanics' National Bank by the Fidelity National Bank, nor was any credit given to the Winters National Bank for the same, until after the Fidelity National Bank was in possession of the receiver. On the twentieth of June the Drovers' & Mechanics' National Bank, by letter, advised the Fidelity National Bank of the collection of the note, and for the credit given it for the amount; upon the receipt of this advice the receiver credited the Winters National Bank, and charged the Drovers' & Mechanics' National Bank with the amount on the books of the Fidelity National Bank, under or as of the date of June 20, 1887. The Winters National Bank did not anticipate payment of the note by drawing on the Fidelity National Bank for the whole or any portion of the amount thereof. The Winters National Bank had a credit balance with the Fidelity Bank, and, in the course of business, would not have drawn on the amount of said note until after being advised that said note had been paid. The Drovers' & Mechanics' National Bank's account with the Fidelity Bank shows a debit balance. The Winters National Bank and the Drovers' & Mechanics' National Bank both had reciprocal accounts with the Fidelity National Bank. The $2,000 collected as aforesaid having come into the possession of the receiver since his appointment, and since the doors of the Fidelity Bank were closed, is now demanded by the Winters National Bank, and the receiver 'prays instructions from the court as to whether said amount belongs to the Winters National Bank or to himself as receiver.'

Under the facts thus presented the $2,000 in question is clearly the property of the Winters National Bank, and cannot be rightfully retained by the receiver as part of the assets of the Fidelity National Bank. Under the special and restrictive indorsement which the Winters Bank placed upon the note when it was transmitted to the Fidelity Bank for collection and credit, viz., ...