In re Jarmulowsky , 249 F. 319 ( 1918 )

HOUGH, Circuit Judge

(after stating the facts as above), f 1 ] In this matter of general commercial law it is our duty to apply the rules enunciated by the Supreme and other courts of the United States; we are not controlled by state decisions. Railroad Co. v. National Bank, 102 U. S. 14, 26 L. Ed. 61, reaffirming Swift v. Tyson, 16 Pet. 1, 10 L. Ed. 865.

[2] In the absence of any special agreement between these depositors and their bank, the title to the checks would have passed to the bank, and the bank become merely a debtor to the depositor for the amount entered in the passbook. Burton v. United States, 196 U. S. 297, 25 Sup. Ct. 243, 49 L. Ed. 482, approving Cragie v. Hadley, 99 N. Y. 131, 1 N. E. 537, 52 Am. Rep. 9.

[3 -6] Whether there was any other or special agreement made is a question of fact. St. Louis & San Francisco R. R. Co. v. Johnston, 133 U. S. 566, 10 Sup. Ct. 390, 33 L. Ed. 683. On the facts above stated the evidence making for an absolute ownership of the checks by the bankrupts is the entry of full credit in the passbook and the fact that the depositors indorsed in blank; but it is to be noted, as they did not indorse either, “For deposit” or “For collection,” nor indorse specially, the Jarmulowskys might have written any lawful direction over the unrestricted signatures of the depositors. It is said, also, that in the case of Bortz the privilege of checking against such deposits as the one in question tends to show that the bankrupts became the absolute owners of the checks. On the other hand is the notice in the passbook which undoubtedly constituted part of the original contract between banker and depositor.

We regard the fact that the depositors’ indorsements were in blank of no importance, since any indorsement (at least) consistent with the original intent of the parties might have been written there-over. Nor do we think the privilege said to have been extended to “commercial” depositors like Bortz affords any guide to decision. It was a privilege, a favor, without consideration; it could have been retracted at any lime, and cannot, therefore, be held to show any change in the legal relation assumed by the parties when petitioners became depositors in bankrupts’ institution.

Therefore both of these proceedings present the same question, which is whether a depositor who is credited with the face of checks, which he has agreed not to draw against until they shall have been collected, has by the act of deposit parted with the title to the checks in question or other such negotiable paper. It is obvious (and is indeed admitted) that unless there was such parting with title the relation of the bank to the depositor in respect of such collectible items is that of agent. Of course, if the agency had been fulfilled by collection of the checks before May 11th, no such question could be presented, for the moment the bank got money on the checks the relation of debtor and creditor arose. Goshorn v. Murray, 210 Fed. 880, 127 C. C. A. 464.

But here, when petition was filed and the bank superintendent took possession, the agency (if it existed) was terminated before collection effected, and the depositors can follow their own property or its proceeds wherever they can find it, in the absence of supervening superior rights. If these petitioners had indorsed their checks “For deposit” and received full credit therefor, the decision of Putnam, J., in Beal v. City of Somerville, 50 Fed. 647, 1 C. C. A. 598, 17 L. R. A. 291, would entirely cover the case. And it is our opinion that what the parties, here meant was to create as to everything but cash the relation of principal and agent. This inference we draw from these undisputed facts: No depositor had any right (as distinct from an occasional and gratuitous privilege) to draw against anything but cash; this arrangement was advantageous to the hank; and the right to summarily charge back uncollected items, even after full apparent credit on deposit, is thought inconsistent with any intent on the bank’s part to become the owner of such items as those under consideration.

We conclude, therefore, that the course of business shown herein is in effect the same as though the checks aforesaid had been specifically indorsed “For collection and deposit to the account of” the depositors. If this had been done, the situation would be too clear for argument. See Morse on Banking (5th Ed.) § 587.

The orders appealed from are therefore affirmed, with one bill of costs, to be taxed in the Case of Wilson.