Mound City Paint & Color Co. v. Commercial National Bank

• Citation: 4 Utah 353,9 P. 709
• Court: Supreme Court of Utah
• Decision Date: 13 February 1886
• Parties: MOUND CITY PAINT AND COLOR COMPANY, RESPONDENT, v. THE COMMERCIAL NATIONAL BANK, OF OGDEN, APPELLANT

9 P. 709

4 Utah 353

MOUND CITY PAINT AND COLOR COMPANY, RESPONDENT, v. THE COMMERCIAL NATIONAL BANK, OF OGDEN, APPELLANT

Supreme Court of Utah

February 13, 1886

APPEAL from a judgment of the district court of the first district. The opinion states the facts.

Affirmed.

Mr Ransford Smith, for the appellant.

Mr James N. Kimball, for the respondent.

ZANE C. J. POWERS, J., and BOREMAN, J., concurred.

OPINION

ZANE, C. J.:

The plaintiff (a corporation under the laws of the state of Missouri, and doing business at St. Louis in that state) instituted its action against the defendant (a corporation under the laws of the United States, engaged in the business of banking at Ogden, Utah), on a bill of exchange for two hundred and fifty-four dollars and forty-three cents, drawn by plaintiff on Bishop & Schaeffer, a firm at Ogden, payable at sight to the defendant.

The complaint contained the allegation, among others, that defendant undertook to collect the draft described. The defendant interposed a demurrer to the complaint, which was overruled by the court. This ruling the defendant assigns as error.

The defendant insists that the business of collecting drafts is ultra vires of a national bank, and for that reason the undertaking to collect was not binding on the defendant. "The business of collecting commercial paper is a part of the regular business of banking, and it is not necessary that the charter of the bank should specifically confer the power to engage in it upon the bank, as it is plainly within the powers implied by the creation of such an institution:" 1 Daniel on Negotiable Instruments, sec. 324. The business of collecting commercial paper is a part of the regular business of banking when carried on under national as well as under other bank charters: Exchange Nat. Bank v. Third Nat. Bank, 112 U.S. 276, 28 L.Ed. 722, 28 L.Ed. 728, 5 S.Ct. 141; Merchants' Nat. Bank v. Goodman, 1 Cent. Rep. 428. This was the only ground upon which the demurrer was urged. We are of the opinion that the exception to the ruling of the court on the demurrer was not well taken.

When the cause came on for trial, counsel for the plaintiff moved for judgment on the complaint and answer, which motion the court allowed, and entered judgment against defendant for three hundred dollars, and thirty-two dollars and ten cents costs. This action of the court the defendant also assigns as error. The allegations of the complaint, with the admissions and denials of the answer, present the following facts, in substance. The plaintiff, a corporation doing business in St. Louis, Missouri, drew its bill of exchange on Bishop & Schaeffer, a firm doing business in Ogden, Utah, for a debt due the plaintiff, payable to defendant at sight, and sent this bill to defendant for collection without further instructions, who received it in the usual course of its business on November 24, 1884. On the same day defendant presented it to the drawers, and demanded payment. They failed to make payment, and defendant took their acceptance and immediately notified plaintiff of the receipt of the draft and of the acceptance. The defendant held it until the tenth day of January following, a period of forty-seven days, and then returned it by mail to plaintiff, with the statement that defendant had been unable to collect. During the time the draft was so held defendant paid checks of Bishop & Schaeffer drawn on it largely in excess of plaintiff's bill of exchange; such checks were overdrafts, and paid out of funds of the bank. It also appears that before ...