Massey v. Fisher

• Decision Date: 04 May 1894
• Citation: 62 F. 958
• Parties: MASSEY et al. v. FISHER.
• Court: U.S. District Court — Eastern District of Pennsylvania

62 F. 958

MASSEY et al. v. FISHER.

United States Circuit Court, E.D. Pennsylvania.

May 4, 1894

Charles Y. Audenreid and Frank P. Prichard, for plaintiffs.

David H. Stone, for defendant.

BUTLER District Judge.

There is no controversy about the facts; and the plaintiffs' statement may therefore be adopted:

'On February 3, 1891, J. R. Massey & Son, who were depositors with the Spring Garden National Bank, indorsed and had discounted by the bank a note, dated February 2, 1891, made by Samuel Young to the order of Ephraim Young for $1,225 at four months, which had been indorsed by the payee and by one Edward Phair. This note fell due June 5, 1891. On February 17, 1891, the Spring Garden National Bank deposited the note with the clearing-house committee of the clearing-house association of the banks of Philadelphia in substitution for certain other notes then matured or about to mature, which had theretofore been pledged to secure advances made to the bank by that committee. On April 30 1891, Frank H. Massey, one of the complainants, being ignorant that the bank no longer held the Young note called at the office of the bank and stated to the cashier that he desired to pay it. The cashier sent a clerk to fetch the note, but the latter returned without it and informed him that it had been delivered to the clearing-house committee. The cashier then said to Mr. Massey: 'You pay me the money, and the next time we send to the clearing house we will take up this Young note and send it to you.' Massey thereupon gave the cashier $1,225 in bank bills, and was handed a receipt for them in the following form:

"The Spring Garden National Bank,

"12th and Spring Garden Streets,

"Philadelphia, Apr. 30, 1891.

"Received of J. R. Massey & Son twelve hundred and twenty-five ($1,225) dollars, being in full payment of note signed Edward Phair for that amount, due June 5/91, said note to be handed Messrs. Massey upon the return of this receipt.

H. H. Kennedy, Cash.'

'The money thus received by the cashier was handed by him to the note clerk of the bank, and he, on the same day, transferred it to the receiving teller, by whom it was put into the drawer with the other money of the bank in his possession, and on the next morning turned over in bulk, with other moneys to the bank's paying teller. On the diary of the bank, and on its book of bills discounted, credit entries were made indicating that the Young note had been paid. The bank, however, did not take up the note. On May 8, 1891, the Spring Garden National Bank suspended payment, and its assets were taken possession of by the bank examiner, who on June 1, 1891, transferred them to Benjamin F. Fisher, the receiver appointed for the bank by the comptroller of the currency. Among the other assets which came into the hands of the bank examiner on the failure of the bank was the sum of $34,042.73 in bills, silver dollars and fractional currency, which sum, less about $1,000 paid out by him for wages, etc., was turned over to the receiver,. At no time between April 29, 1891, and the day on which it closed its doors, did the bank have on hand in cash less than $24,000. On June 17, 1893, judgment was entered against the complainants in favor of the clearing-house committee, in an action instituted by the latter of collection of this note, in court of common pleas No. 4 for the county of Philadelphia, of December term, 1892, No. 881, for the amount of $1,377.50, and this judgment, with interest and costs, was paid by the complainants November 9, 1893.'

The plaintiffs claim that the transaction established a fiduciary relation between the parties, while the defendant claims that it established the relation of debtor and creditor only. If the question was new, its proper solution might be open to doubt. Even in such case however, I would adopt the plaintiffs' view. The money was delivered and received to extinguish the note. Neither party contemplated that the bank might use it for another purpose, leaving the note outstanding, and the plaintiffs' liability unextinguished. Such application of it therefore,...