Evansville Bank v. German-American Bank

Citations

• 155 U.S. 556
• 15 S. Ct. 221
• 39 L. Ed. 259
• 1895 U.S. LEXIS 2105

Syllabus

<p>In June, 1887, the Fidelity Bank of Cincinnati had a contract with the German-American Bank of Peoria “ to credit sight items on any point in the United States east of Illinois, where there are banks, at par; and to make collections on same points ” and “ to credit the same at par when collected,” At that time there also existed an arrangement between the Fidelity Bank and the Bank of Evansville in Indiana for mutual and reciprocal collection business. On the' 14th of that month the German-American Bank sent to the Fidelity Bank for collection a sight draft on a firm in Terre Haute, endorsed “ for collection.” On the 16th this draft was forwarded to the Evansville Bank for collection. On the 18th the draft was sent by the Evansville Bank to a bank in Terre Haute for collection, and was collected by the latter bank on the 20th of June. On the morning of the 21st, before banking hours, the Evansville Bank received news of the collection, and' after crediting the Fidelity Bank with it, as of June 20th, notified the Fidelity Bank of the payment and of the entry to credit by a letter which was received there on the 22d. On the 20th the Fidelity Bank was, and for ten days before it had been, insolvent. It was not open for business after the 20th, and on the 27th passed into the hands of a receiver. Held, that the Fidelity Bank, though it acquired the mere legal title to the draft, never became its equitable owner; that the notice on the draft' that it was for collection bound all parties, into whose hands it came; that the Evansville Bank could not by its entry of credit to the Fidelity Bank release itself of its obligation to the German-American Bank; and that the mere fact that news of the condition of the Fidelity Bank had not reached the Evansville Bank at the time it made the entry was immaterial.</p> <p>Commercial Bank of Pennsylvania v. Armstrong, 148 U. S. 50, shown not to conflict with this decision.</p>