Bank of Bay Biscayne v. Monongahela Nat. Bank

Citations

• 126 F. 436
• 1903 U.S. App. LEXIS 5176

Syllabus

<p>1. Banks and Banking — Collection of Drafts — Measure of Duty — Ordinary Care.</p> <p>Where drafts are sent from one bank to another for collection and remittance, the measure of duty of the collecting bank is the exercise of ordinary care and reasonable diligence.</p> <p>2. Same — Evidence.</p> <p>Plaintiff mailed to defendant bank for collection on July 1st two drafts, amounting to $1,425.50, on S. Bros. Co., who were in good credit. On July 3d three more drafts, aggregating $1,622.41, and on July 5th other drafts amounting to $2,757.85, were drawn on the same company. The drafts were received by defendant, respectively, on July 5th, 7th, and 9th, with directions to collect and remit without protest. The drafts were presented on the days they were received, and the drawees on each occasion stated that they would pay the drafts as soon as they could verify the amounts from the invoices for which the drafts had been drawn, and requested that the drafts be held until such verification could be made. On July 9th plaintiff requested defendant to inform it whether the drafts had been paid, and on the same day defendant answered by telegram that one of the drafts had been paid that day, and that the others would be paid in a few days. On July 10th plaintiff telegraphed defendant to return the drafts if' not paid that day, which was accordingly done. Before July 9th plaintiff had permitted the drawers to overdraw their account $3,000, and, after receiving the telegram of July 9th, permitted a further overdraft of $2,000; and, by reason of the nonpayment of the drafts, plaintiff lost by such overdraft an amount not exceeding $2,000. HeM, that plaintiff’s loss was not chargeable to defendant’s alleged negligence in failing to promptly return the drafts after presentation and nonpayment.</p> <p>if 1. See Banks and Banking, vol. 6, Cent. Dig. § 598.</p>