Henderson v. O'Conor

Vanclief, C. On June 7, 1893, the Consolidated National Bank, incorporated under the national banking laws of the United States, was doing a general banking business in the city of San Diego in this state, but on June 21, 1893, failed, and suspended payment; and on July 23,1893, the defendant was appointed receiver of said bank.

On said seventh day of June, 1893, the plaintiff deposited with that bank for collection a draft in her favor drawn by the Mutual Benefit Life Insurance Company, of Newark, New Jersey, on the National State Bank of Newark, New Jersey, for the sum of fifteen hundred and twenty-one dollars and forty-two cents. The bank (of San Diego) refused to accept the draft as a deposit, but advanced to plaintiff on her check, at the time the draft was taken for collection, twenty-one dollars and forty-[389]two cents, and charged her with this sum on its books as an overdraft. At the same time the plaintiff directed the bank of San Diego to deposit the proceeds of the draft when collected in the Savings Bank of San Diego County, whose place of business was in the same rooms as that of said Consolidated National Bank, but later on the same day countermanded this order, and directed said bank to wait until she returned from a visit she intended to make to Oceanside, from which she expected to return in about three weeks, and that she would then give definite instructions as to what should be done with the proceeds of the draft.

Said bank immediately forwarded the draft by mail to its correspondent, Kuntze Bros., bankers in New York, for collection, with instructions to collect and place to its credit.

On June 14, 1893, Kuntze Bros, collected the draft and credited the proceeds as instructed, and immediately notified said bank thereof by mail; and the notice was received by the bank on June 20, 1893, when it placed to the credit of the plaintiff on its books the sum of fifteen hundred and twenty-one dollars and forty-two cents; and on the following day (June 21st) failed, and suspended payment.

The plaintiff had no notice that the draft had been collected, nor that the bank had credited her on its books with the sum collected by Kuntze Bros, until after the failure of said bank.

For a long time before the failure said consolidated bank, including all the times of the transactions above stated, had a running account with Kuntze Bros, in which it was credited with collections made for it by the latter, and charged with its drafts against such collections, some of which drafts were paid and charged after the collection of the draft in favor of plaintiff; but at all times after the collection of this draft said consolidated bank was credited in said account by a sum largely in excess of the amount of this draft, and also