In re Gubelman

• Decision Date: 01 February 1926
• Docket Number: No. 152.,152.
• Citation: 10 F.2d 935
• Parties: In re GUBELMAN et al. Ex parte ROECHLING et al.
• Court: U.S. Court of Appeals — Second Circuit

10 F.2d 935 (1926)

In re GUBELMAN et al. Ex parte ROECHLING et al.

No. 152.

Circuit Court of Appeals, Second Circuit.

February 1, 1926.

Kellogg, Emery, Inness-Brown & Cuthell, of New York City (Henry G. Hotchkiss, of New York City, of counsel), for appellants.

Rosenberg & Ball, of New York City (Ralph F. Colin and George G. Ernst, both of New York City, of counsel), for appellee.

Before HOUGH, MANTON, and HAND, Circuit Judges.

HAND, Circuit Judge.

This case presents exactly the same situation, with a single exception, to be noted, as existed in respect of the second check in Re Gubelman, ex parte Latzko & Popper, 10 F.(2d) 926, decided by this court on December 7, 1925. There the check read, "Pay to the order of Knauth, Nachod & Kuhne, favor of N. Latzko & Popper." Here one check read, "for account of Roechling Bank," and the other "a/c Gebt. Roechling." We held that "favor of" was equivalent to "collect for," and it seems to us even plainer that "for account of" is as broad. Indeed, this was the form of the check in White v. National Bank, 102 U. S. 658, 26 L. Ed. 250. If the drawer chooses to make the payee a fiduciary, he establishes that relation when the payee accepts it, at least until the beneficiary repudiates it, or unless his arrangements with the payee forbid. There can be no question that the drawer has limited the payee's free disposal of the check in the interest of another, and that is enough.

However, as we have just said, there is one difference between the case at bar and Ex parte Latzko & Popper. There the proof was that, although the depositors' checks were always at once credited to their account, their practice had been never to draw upon them until collection. Here the checks were also credited at once, but it does not appear what the practice was as to drawing against them. As there was no agreement shown in either case to wait or not to wait until collection, we regard any distinction as immaterial. In addition, not only were the items themselves at once credited, but interest upon them as well from the time of their receipt. This, too, we think immaterial. The immediate credit of such paper is itself evidence of the creation of a debt from the bank to its depositor, and on its face presupposes a purchase of the check. But such an entry will not control the form of the paper. We do not see that it adds anything of substance that interest has also been credited. Such entries are not kept in suspense, or entered "short," but are reversed if the item be dishonored. The trustee must, indeed, go so far, and...