National Bank of Commerce v. Atkinson

• Decision Date: 11 April 1893
• Docket Number: 6,850.
• Citation: 55 F. 465
• Parties: NATIONAL BANK OF COMMERCE OF KANSAS CITY v. ATKINSON.
• Court: U.S. District Court — District of Kansas

55 F. 465

NATIONAL BANK OF COMMERCE OF KANSAS CITY v. ATKINSON.

No. 6,850.

United States Circuit Court, D. Kansas.

April 11, 1893

Elijah Robinson, for plaintiff.

Ady Peters & Nicholson, for defendant.

RINER District Judge.

This is an action at law. The petition contains four separate causes of action. The first cause of action is upon a promissory note for the sum of $38,959, with interest dated at Kansas City, Mo., October 22, 1890. The second cause of action is upon a promissory note for the sum of $7,500 with interest, dated at Kansas City, Mo., October 20, 1890. The third cause of action is upon a promissory note for the sum of $5,000, dated at Kansas City, Mo., July 11, 1891. The fourth cause of action is upon a certificate of deposit for the sum of $15,000, dated at Kansas City, Kan., April 28 1891. The notes described in the first and second causes of action are signed by the English & American Mortgage Company, Limited, by Eli H. Chandler and D. R. Emmons, directors, and indorsed by Eli H. Chandler, D. R. Emmons, president. The note described in the third cause of action is signed by the First National Bank of Kansas City, Kan., by I. D. Wilson, president, and indorsed by I. D. Wilson and Benjamin Schnierle. The certificate of deposit described in the fourth cause of action was issued by the First National Bank of Kansas City, Kan., and signed by Benjamin Schnierle, cashier, and payable to I. D. Wilson, and, before maturity, was by him indorsed, sold, and transferred for value to the plaintiff, who is now the legal owner and holder thereof. The real controversy in the case relates to the first and second causes of action, the defendant admitting the execution of the note and certificate of deposit set up in the third and fourth causes of action, insisting merely that the collaterals deposited therewith shall be returned, or it be credited therewith, before the claim can be audited and allowed as a claim against the bank. The facts shown by the record, so far as they relate to the first and second causes of action set up in the petition, are as follows: On August, 3, 1889, the English & American Mortgage Company, a corporation, with headquarters at London, Eng., and a branch office at Kansas City, Kan., through D. R. Emmons, the chairman of its board of directors, and Eli H. Chandler, a director and the manager of the mortgage company, applied to the plaintiff, the National Bank of Commerce of Kansas City, Mo., to cash a draft upon the London Office for L5,000 sterling. The draft was drawn by Emmons and Chandler, the directors of the English & American Mortgage Company, Limited, payable to the order of Eli H. Chandler, manager. At the time they applied to have this draft cashed they were informed by the officers of the Bank of Commerce that if they would obtain the indorsement of the First National Bank of Kansas City, Kan., upon the draft the same would be discounted, and the draft was thereupon taken to William Albright, cashier of the First National Bank of Kansas City, Kan., who, after the same had been indorsed by Eli H. Chandler, manager, indorsed upon the back of the draft the following words: 'Pay to the order of the National Bank of Commerce, Kansas City, Mo., for account of First National Bank of Kansas City, Kansas. William Albright, Cashier. ' Chandler then took the draft, and returned to Kansas City, Mo., and delivered the draft so indorsed to the National Bank of Commerce, and was informed by the officers of that bank that he could now have the money. Thereupon the amount of the draft, less the discount charged by the National Bank of Commerce, was credited to the First National Bank of Kansas City, Kan., for account of the English & American Mortgage Company, and a memorandum of the account given to Chandler, who then returned to Kansas City, Kan., and gave the memorandum to the cashier of the First National Bank of Kansas City, Kan., and the amount was entered upon the books of the First National Bank as a remittance to the National Bank of Commerce. The draft, after being delivered to the National Bank of Commerce by Chandler, was indorsed by that bank to Brown Bros. & Co., of New York city, and by Brown Bros. & Co. was indorsed to the London & Westminster Bank, and forwarded to London, and was presented to the London office of the English & American Mortgage Company, and was accepted. The acceptance, which is written upon the face of the draft, is in the following words: 'Accepted. Payable at the Capital and County's Bank, L. D. The English and American Mortgage Co., Limited. M. M. Moore, S. H. Green, Directors. George W. Dawson, Secretary. ' On the 13th of August 1889, a draft for L3,000 sterling was drawn by Eli H. Chandler and Edmund T. Brown, directors of the English & American Mortgage Company, Limited, payable to the order of Eli H. Chandler, manager, upon which draft the same indorsement was made by William Albright, cashier of the First National Bank of Kansas City, Kan., as was made upon the first draft for L5,000 sterling. This draft also was taken by Chandler to the National Bank of Commerce, and the amount, less the discount, was credited up to the First National Bank of Kansas City, Kan., and by the Bank of Commerce indorsed as follows: 'Pay Kountze Bros. or order, account National Bank of Commerce, Kansas City, Mo. H. C. Switzgable, A.C.' This draft was forwarded to London, presented at the office of the English & American Mortgage Company, Limited, at that place, and accepted. The acceptance, written across the face of the draft, is as follows: 'Accepted. Payable at the Capital and County's Bank, L.D. Threadneedle St., London, England, August 28, 1889. M. M. Moore, S. H. Green, Directors. George W. Dawson, Secretary. ' This transaction was entered upon the books of the First National Bank of Kansas City, Kan., as a remittance to the National Bank of Commerce, taking the same course which had been taken with the first L5,000 draft.

The amount entered upon the books of the First National Bank of Kansas City, Kan., as the credit given by the National Bank of Commerce to the first draft, dated August 3d, was the sum of $24,030, which was all the money the English & American Mortgage Company had to its credit on that day in the First National Bank of Kansas City, Kan. August 4th the mortgage company checked out $5,514.03; August 6th, $931.88; August 7th, $1,040.50; August 8th, $2,509.59; August 9th, $2,004 and August 10th, $2,924.02,-- making a total checked out by the mortgage company from the 4th to the 10th day of August, inclusive, of $23,823.99. August 13th the amount to the credit of the mortgage company in the First National Bank of Kansas City, Kan., after having received the credit from the Bank of Commerce for the L3,000 draft, was $14,396. On that day the mortgage company checked out $1,326.85; August 14th, $1,977.37; August 15th, $3,790; August 16th, $3,377.95; August 17th, $1,108.42; August 19th, $2,988.61; August 20th, $534; August 21st, $1,185.25; and August 22d, $641.66,-- making a total checked out from the 13th to the 22d of August, inclusive, of $16,234.35. October 1, 1889, D. R. Emmons and Eli H. Chandler, directors of the English & American Mortgage Company, drew a draft for L5,000 sterling, payable to the order of Eli H. Chandler, upon the English & American Mortgage Company, Limited, 6 Lombard St., London, which draft was indorsed by Chandler, and also by William Albright, cashier of the First National Bank of Kansas City, Kan., and delivered to the Bank of Commerce, and by that bank sent to Kountze Bros., and by them forwarded to the Union Bank of London. This draft was taken by one of the officers of the mortgage company to the National Bank of Commerce, the officer of the mortgage company who delivered the draft having first obtained the indorsement of the cashier of the First National Bank of Kansas City, Kan., but no entry of this draft or the action of the cashier was ever made upon the books of the First National Bank of Kansas City, Kan. This draft was protested on the 3d of December, 1889, at the request of the Union Bank of London. The protest shows that it was presented at the office of the mortgage company in London, and payment demanded. That payment was refused, the refusal being in the following words: 'Refused to pay. Drawn without authority. ' October 11, 1889, D. R. Emmons and Eli H. Chandler, directors of the English & American Mortgage Company, London, drew a draft for L3,000 sterling, payable to the order of Eli H. Chandler, manager, drawn upon the English & American Mortgage Company, Limited, which draft was also indorsed by Chandler and by William Albright, cashier of the First National Bank of Kansas City, Kan., and delivered to the National Bank of Commerce, and by that bank forwarded through its New York correspondent to London. It was presented for payment at the office of the mortgage company in London on the 13th of December, and payment refused. The refusal indorsed upon the draft is as follows: 'No authority to draw. No orders. George W. Dawson, Secretary. ' And upon the same day the draft was protested for nonpayment. December 9th the National Bank of Commerce, having received notice of the protest of the second draft for L5,000 sterling, dated October 1, 1889, notified the officers of the mortgage company that the draft had been protested. Chandler, in whose favor the draft had been drawn, was absent, and Emmons, the chairman of the board of directors of the mortgage company, upon receiving notice, called at the office of the National Bank of Commerce of Kansas City, Mo., where he was informed that the draft must be taken up. At this time the mortgage company was indebted to the Bank of Commerce, on a previous loan, in the sum of...