St Louis Ry Co v. Johnston
Decision Date | 03 March 1890 |
Citation | 10 S.Ct. 390,133 U.S. 566,33 L.Ed. 683 |
Parties | ST. LOUIS & S. F. RY. CO. v. JOHNSTON. 1 |
Court | U.S. Supreme Court |
For more than five years prior to the 6th day of May, 1884, the St. Louis & San Francisco Railway Company had an account with the Marine National Bank, of the city of New York. On the 5th day of May of that year, it drew a sight-draft on the Atchison, Topeka & Santa Fe Railroad Company, at Boston, Mass., payable to the order of the Marine Bank, for the sum of $17,835, an amount due from the latter company, and sent the same to the Marine Bank, with a deposit ticket, filled up by the assistant treasurer of the San Francisco Company, in the following words and figures:
"Deposited by the St. Louis & San Francisco Railway Co. in
the Marine National Bank, May 5th, 1884.
Bills..............................Dollars. Cents.
Checks.............................$17,835"
The messenger who took the draft and deposit ticket to the bank had no special instructions, and handed them to an assistant of the receiving teller, who was absent at the time. The railway company's pass-book was then, and had been since April 30, 1884, in the possession of the bank; and no entry was made in it until some days afterwards, and then not by direction of the railway company. The assistant receiving teller applied to the assistant cashier for instructions, and was by him directed to receive the draft as cash; and it was so entered on the credit ledger of dealers with the bank, but not with the knowledge, or by the request, of the railway company. The Marine Bank sent the draft to the Atlantic National Bank, of Boston, for collection and credit, and it was by that bank presented to the Atchison Company on the 6th of May, 1884; and that company, at 5 minutes before 1 o'clock P. M. of that day, delivered its check on the National Bank of North America to the Atlantic Bank, which was presented for payment, and paid, to the Atlantic Bank, on May 7, 1884. The Marine Bank was insolvent when it received the draft, and closed its doors at 20 minutes before 11 o'clock on the morning of the 6th of May, 1884, and never resumed business. Walter S. Johnston was appointed receiver of the bank on the 13th of May, 1884; and thereupon a correspondence ensued between the receiver and the San Francisco Company, which resulted in an agreement between them that the receiver might retain the proceeds, subject to the right of the San Francisco Company to assert its claim thereto, which it does in this action. It is conceded that the Marine Bank never paid or advanced anything to the San Francisco Company on the draft, and that the latter, at the time the draft was sent to the bank, or at any time since, was not indebted to it. The balance to the credit of the railway company in the Marine Bank at 9 o'clock A. M. on May 6, 1884, not including the draft, was $117,981.72, besides some checks it had drawn and which it was obliged to take up. The treasurer n d assistant treasurer of the railway company testified that there was no arrangement or understanding, verbal or written, or dealing, to their knowledge, with the Marine Bank, by which the San Francisco Company was authorized or entitled to draw against out of town paper before actual collection, and that no drafts were ever so drawn; that they knew of no such agreement, verbal or in writing; that they drew on what they had, and not on what they did not have; that the railway company had no occasion to draw against drafts or checks before collection, and did not do so; and that the company was allowed interest on its daily balances. Four deposits of out of town paper, other than that in question, were proven to have been made under the dates of August 23, August 27, and November 3, 1883, and April 10, 1884. The deposit tickets in each case referred to the deposit, as "checks." The depsits of August 23d, August 27th, and November 3d were made up of two items each; but neither was marked on the tickets as cash, and there was no evidence that either of them was. The recieving teller testified that generally foreign paper, (paper outside of the city of New York,) of large amount, when received, was marked "F:" and such a mark, in red pencil, appeared on the deposit tickets of November 3, 1883, for $17,860; of April 10, 1884, for $18,930; and of May 5, 1884, for $17,835, being the deposit in controversy. The witness said this was done so "that, if any of the officers should ask what certain checks consisted of,--if a large deposit,--we would be able to tell." These drafts or checks on banks outside of the city were kept on a slip called "Foreign and General Office Slip," and put in a different pigeon-hole from that where domestic paper was placed. The assistant note teller had charge of the transmission of paper drawn on banks or persons outside of the city of New York, and testified thus; This particular draft was marked "F," and put in the foreign pigeon-hole, and credited as cash by direction of the assistant cashier. The form of letter universally used in transmitting foreign paper for collection was put in by defendant, and contained this paragraph: "Please return as promptly as possible all unpaid collections protested, unless marked thus, "X," when please return without protest." In the five instances of the deposit of these out of town drafts, they were creditied to the San Francisco Company on the bank's books, and the San Francicso Company entered and added their amount on the margin of its check-book.
It appeared from the >>It appeared from the evidence that the bank had been insolvent for a year, and that t was hopelessly so on Saturday, the 3d day of May, and until its doors were closed. The receiver said that he got judgment for over $730,000 on the overdrafts of a firm doing business with the bank, which overdrafts occurred in the last two or three days in one account, and had been running for two or three weeks in the other account; that the overdraft in the individual account of one of the partners amounted to $140,000; in the firm account, to $300,000; and in the firm special account, to $350,000,—most of which was before Saturday, the 3d of May. Estimating the assets of the bank at what they were actually worth, and not at their face value, the deficit, according to the receiver's judgment when he took charge, was over $1,500,000. The bank was really insolvent from the time the indebtedness from the firm in question, which was insolvent, grew to such a point that, if called and not paid, the bank could not meet its obligations. The president of the Marine Bank was a partner of that firm.
The bill in this case was filed to obtain the proceeds of the draft as the property of the San Francisco Company, and among other things alleged: And 'that, by reason of the premises, the said draft, when delivered as aforesaid to the said bank, did not become the property of the said bank, and that your...
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