South Park Foundry & Machine Company And Others v. Chicago Great Western Railway Company
| Decision Date | 05 January 1899 |
| Docket Number | 11,436 - (198) |
| Citation | 77 N.W. 796,75 Minn. 186 |
| Parties | SOUTH PARK FOUNDRY & MACHINE COMPANY and Others v. CHICAGO GREAT WESTERN RAILWAY COMPANY |
| Court | Minnesota Supreme Court |
Petition by the South Park Foundry & Machine Company to the district court for Ramsey county in the matter of the receivership for the insolvent Bank of Minnesota. The receivers of the bank and the Chicago Great Western Railway Company were ordered to show cause why the petition should not be granted. The facts are given in the opinion. From an order, O. B. Lewis, J., granting petitioner's application, the railway company appealed. Affirmed.
Insolvent Bank -- Deposit of Draft for Collection -- Credit before Collection -- In re State Bank Followed.
Held following doctrine of In re State Bank, 56 Minn. 119, that the evidence justified the trial court in finding that a draft delivered by the drawer to his bank, and for which he received credit on his account, was delivered for "collection and credit," and that the credit before collection was merely provisional, and, hence, that the title to the draft did not pass absolutely to the bank.
Daniel W. Lawler and John M. Blakeley, for appellant.
McLaughlin & Boyesen, for respondent.
The South Park Foundry & Machine Company (hereinafter called the "Machine Company") and the Chicago Great Western Railway Company (hereinafter called the "Railway Company") were, and for years had been, customers of the Bank of Minnesota (hereinafter called the "Bank"), with which each of them had an open and current bank account, subject to check.
On December 7, 1896, the Machine Company drew its draft for $910.71, payable in 30 days to its own order, on the Railway Company, which the Railway Company accepted on the same day. On the next day the Machine Company indorsed the draft, by an unrestricted indorsement, and delivered the same to the Bank, which credited the Machine Company with the amount (less interest to maturity at 8 per cent.) on its pass book, and on its open and current account in the books of the Bank.
According to the usual course of business, the Machine Company had the privilege of checking against this credit, but as a matter of fact it never exercised the privilege, but had at all times subsequent to this deposit, and at the time the Bank closed its doors, on December 22, a sum to its credit much larger than the amount of the draft.
On the date last named, the Bank being insolvent, the superintendent of banks took possession of its assets, and, upon his petition, receivers of the same were appointed, pursuant to statute. The draft referred to (which was among the assets of the Bank, and not yet due) came into the possession of the receivers.
At the time the Bank closed its doors there was due from it to the Railway Company on its open account a sum in excess of the amount of the draft. The Railway Company refused to pay the draft when it matured, claiming the right to set off against it the amount due to it from the Bank on its deposit account. The Machine Company then appeared in the receivership proceedings, and asked the court to order the receivers to return the draft to it, and charge the amount back against its deposit account. The receivers submitted the facts to the court, and asked its instructions in the premises. The Railway Company, upon the order of the court, appeared, and asked that the petition of the Machine Company be denied, and that the receivers be instructed to...
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