Minneapolis S. & D. Co. v. Metropolitan Bank

• Decision Date: 02 May 1899
• Docket Number: Nos. 11,501 - (62).,s. 11,501 - (62).
• Citation: Minneapolis S. & D. Co. v. Metropolitan Bank, 76 Minn. 136, 78 N. W. 980 (Minn. 1899)
• Parties: MINNEAPOLIS SASH & DOOR COMPANY v. METROPOLITAN BANK.
• Court: Minnesota Supreme Court

Page 136

76 Minn. 136

MINNEAPOLIS SASH & DOOR COMPANY v.METROPOLITAN BANK.

Nos. 11,501 - (62).

Supreme Court of Minnesota.

May 2, 1899.

Action in the district court for Hennepin county to recover $316.68 damages, by reason of defendant's negligence in failing to collect a check for that amount. The case was tried before Lancaster, J., whose finding of facts included the following, among others:

The plaintiff was a depositor in defendant bank; and, when plaintiff opened its account with defendant, it delivered to plaintiff a pass book on which was printed the following notice, to-wit:

"This bank, in receiving checks or drafts on deposit, or for collection, acts only as your agent, and, when forwarding items to other points, we select agents who are responsible according to our

judgment and means of knowledge, but we assume no risk or responsibility on account of their omissions, negligence or failure, should any occur."

All pass books thereafter issued to plaintiff bore the same notice.Plaintiff's attention had been called to said notice before July 29, 1896.There never was any conversation or agreement between them modifying the terms of said notice; plaintiff never instructed defendant to proceed in any exceptional way in collecting plaintiff's checks, drafts or commercial paper.On July 29, 1896, plaintiff deposited with defendant a check drawn by one J. K. Norton on the Mapleton Bank of Mapleton, Minnesota, for $316.68, payable to plaintiff's order, and then received the usual provisional or conditional credit on the books of the bank and on plaintiff's pass book.On the same day defendant sent the check by mail to said Mapleton Bank for collection and payment; said Mapleton Bank was the only bank at the village of Mapleton, and the only agency known to defendant for the collection of such commercial paper at such place, and was and always had been responsible, according to the judgment and means of knowledge of defendant; the usual and ordinary way in which defendant could collect said check without unusual and unnecessary expense was by sending it to said bank for collection; said bank was then reputed to be a perfectly safe and reliable banking institution; it was, and had been, the universal custom of banks, upon receiving on deposit or for collection a check or draft drawn on a bank which was the only bank at the place where such bank was situated, if such bank was reputed to be a safe and reliable institution, to send such check or draft direct by mail to such bank for collection; defendant had frequently so sent items for collection to said Mapleton Bank, and had always found it to be safe and trustworthy; when said Norton check was thus presented for payment to said Mapleton Bank, said Norton had on deposit with it, and subject to his order and check funds more than sufficient to pay said check; the presentment of said check was recognized by said Mapleton Bank, and payment was made as follows:

On August 5, 1896, defendant received by mail from said Mapleton Bank in payment of said check the draft of said Mapleton Bank on National Citizens' Bank of Mankato, Minnesota, drawn to the order of defendant for $316.13, 55 cents having been deducted for exchange; said Mapleton Bank, at the time of receipt thereof by defendant, had on deposit with said National Citizens' Bank, subject to its order or draft, funds more than sufficient to pay said draft; it was, and had been, the universal custom of banks, in making collections from other banks, to accept in payment the draft of the bank drawn on, upon some other bank.On said August 5, 1896, immediately after receipt of said draft, defendant sent it to the Merchants National Bank of St. Paul, Minnesota, for collection; said Merchants National Bank was a regular correspondent of said National Citizens' Bank, keeping a regular account with it, and the only correspondent of said Mankato bank known to defendant, in St. Paul or Minneapolis; it was, and had been, the universal custom of banks in the two cities of St. Paul and Minneapolis, in making collections of such paper, drawn on an outside or "country" bank, when such outside bank kept a regular account with any bank in either city, and was a regular correspondent thereof, to send such paper for collection to such correspondent bank; said National Citizens' Bank and said Merchants National Bank were reputable institutions; according to the general usage of banks said draft was on said August 5, 1896, charged to said Merchants Bank on the collection register of defendant, and credited to it by said Merchants Bank; in the event of collection of such paper, the remitting bank would receive no further advices from the collecting bank, and only in case of failure to collect would there be any further correspondence with reference to such paper; after sending said draft to St. Paul defendant learned nothing further in regard to it till August 20, 1896, when it received notice from said Mankato bank of the dishonor and protest of said draft; said notice informed defendant that said draft had been duly protested on August 8, 1896, for the reason that on said day said Mapleton Bank had not sufficient funds in said Mankato bank; immediately after receipt of said notice defendant communicated the facts to plaintiff; on August 20, 1896, by reason of its dishonor and nonpayment, the draft was charged back to defendant on the books of the Merchants Bank, and was charged back to plaintiff by defendant, and plaintiff was so notified; the draft was returned to plaintiffSeptember 9, 1896; and defendant had declined all responsibility for said draft, and that it was useless for plaintiff again to return it.Said Mapleton Bank suspended payment August 15, 1896, and ever since had been insolvent.

At the time defendant forwarded said check to said Mapleton Bank, the United States Express Company had officers at Minneapolis and Mapleton, and was in the habit of receiving checks from banks in Minneapolis for collection on other banks out of the city, and defendant could have forwarded said check for collection through said company at an expense of from 50 to 75 cents.Defendant made no inquiry as to why said Mapleton Bank did not remit by return mail and waited till August 5 before collecting said check.Plaintiff had no notice...