Amalgamated Sugar Co. v. United States Nat. Bank

Citations

• 187 F. 746
• 109 C.C.A. 494
• 1911 U.S. App. LEXIS 4222

Syllabus

<p>1. Banks and Banking (§ 166*) — 'Checks—Transfer—Bona Fide Purchaser.</p> <p>Defendant drew a check on its bank in O, and by indorsement made the check payable to its deposit hank in L, which thereafter became insolvent. The check was credited to defendant on the books of the L. Bank and sent to plaintiff, the L. Bank’s correspondent for collection and' credit. Plaintiff on receiving the check, payable by indorsement to the order of any bank or hanker, in a letter advising that it was inclosed for collection and credit, credited the amount to the L. Bank’s general account, and thereafter paid drafts against the account and made remit- ■ tanees to the L. Bank, so that its credit at the close of business on October 10th, when the L. Bank closed its doors, was much less than the amount of the check which, on being presented to the drawee bank for payment, payment was refused because defendant had ordered payment stopped. Held, that lilaintiff hank was a bona fide purchaser of the check for value, and Dot a mere subagent of the insolvent hank for collection and credit, and was therefore entitled to recover in the absence of proof that he purchased the check with actual knowledge of the deposit bank’s insolvency or any infirmity connected therewith.</p> <p>[Ed. Note. — For other eases, see Banks and Banking, Gent. Dig. §§ 574-578; Dec. Dig. § 166.*]</p> <p>2. Banks and Banking (§ 166*) — Checks—Indorsement—Rights of Indorsee.</p> <p>The rights of plaintiff hank as a bona fide purchaser being determined in accordance with the legal as distinguished from the equitable rights of the parties, it was entitled to recover the whole amount of the cheek, and was not subject to a deduction to the amount in its hands to the credit of the indorsing bank at the time of the latter’s failure.</p> <p>[Ed. Note. — For other cases, see Banks and Banking, Cent. Dig. §§ 574— 578; Dec. Dig. § 166.*]</p>