First National Bank v. Dennis

Citations

• 20 N.M. 96
• 146 P. 948

Syllabus

<p>SYLLABUS BY THE COURT.</p> <p>1. A bank to which paper is intrusted for collection, in the absence of an agreement to the contrary, becomes the owner of the money collected, and, when collected and proper credit is given to the holder or owner, the relation of debtor and creditor is created between the parties.</p> <p>P. 101</p> <p>2. The condition of insolvency in a collecting bank, known to its officers, impresses the proceeds of the collection with a trust in favor of the owner, or holder, of the paper.</p> <p>P. 101</p> <p>3. Where a special agency is created and' the collecting bank has no authority to hold and credit proceeds of paper, but is bound by the agreement to remit them immediately to its correspondent (or owner or holder), the relation of trustee and beneficiary is created, and the money collected, or its equivalent, can be recovered from the assignee of the insolvent bank, if the funds be traceable. P. 102</p> <p>4. The true test of the existence of nonexistence of a trust in the proceeds of collections made by an insolvent bank is whether or not the relation of debtor and creditor exists between the insolvent bank and the one seeking to establish the trust, and if it exists there is no trust.</p> <p>P. 103</p>