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THE MUSIC TRADE REVIEW.
RECENT LEGAL
DECISIONS.
[PKEPAKED EXPRESSLY FOR THE MUSIC TRADE REVIEW.]
BANK COLLECTS FOR A CUSTOMER AND THEN
FAILS. TO WHOM BELONGS THE MONEY
REALIZED ?
We quote as of general interest the following
question and answer from Rhodes' Journal of
Banking :
" I have a note for $i,ooo, due June 1, at' the
First National Bank of
, I send note to
said bank for collection and it returns with the
following indorsement: ' For collection and re-
mittance to John Jones & Co., Buffalo, N. Y.,
John Jones, Cashier.'
This note is paid on June 1, and on June 2 the
bank fails and goes into the hands of a receiver.
To whom does the money belong that was paid
to the bank for this note ? Does it belong to us
on the ground that the bank was only an agent,
and that the money is a special deposit for us ?
Or do we have to come in as an ordinary de-
positor ? We having had no credit account with
them of any nature.''
JOHN JONES, Cashier.
Answer.—The money collected on the note
undoubtedly belonged to our correspondent; but
whether he can recover it specifically, or must
prove his claim as an ordinary creditor, must
depend on other facts than those stated in the
inquiry. It is clear that the collecting bank
was merely the agent to make the collection,
and that there was no intention of establishing
the relation of debtor and creditor ; and if the
money collected on the note can be traced, it
will be Impressed with a trust in favor of our
correspondent (Atkinson v. Rochester Printing
Company, 114 N. Y., 168; Cutler v. American
Exchange National Bank, 113 N. Y., 593 ; Arnot
v. Bingham, 55 Hunt, 553). But it will be
necessary to identify the fund in some way.
The rule is thus laid down by the Court of
Appeals of this State : " I t Is the general rule,
as well in a court of equity as in a court of law,
that, in order to follow trust funds and subject
them to the operation of the trust, they must be
identified. A court of equity, in pursuing the
inquiry and administering relief, is less ham-
pered by technical difficulties than a court of
law; and it may be sufficient to entitle a party
to equitable preference in the distribution of a
fund in insolvency, that it appears that the fund
or property of the insolvent remaining for dis-
tribution includes the proceeds of the trust estate,
although it may be impossible to point out the
precise thing in which the trust fund has been
invested, or the precise time when the conver-
sion took place. The authorities require, at
least, this degree of distinctness in the proof be-
fore preference can be awarded." (Covin v.
Gleason, 105 N. Y., 256).
It would, therefore, be incumbent upon our
. correspondent to show, at least, that the money
went into the property sought to be charged. If
this can be shown, then we think he could re-
cover it as his own money, and would not come
in merely as an ordinary depositor (Continental
National Bank v. Weems, 69 Tex., 489 ; Com-
mercial National Bank v. Armstrong, 39 Fed.
Rep., 684).
ASSIGNMENT FOR BENEFIT OF CREDITORS—RE-
LEASES UNDER SEAL—ACCOUNTING—CRED-
ITORS' BILL—PRIORITIES—DISMISSAL
OF REPLEVIN
SUIT—JUDGMENT
LIEN — INTEREST — COSTS —
HARMLESS ERROR.
1. A statement in a decree that two actions
were consolidated " by consent " was harmless
error where the consolidation was on motion of
one party, without objection from any of the
other parties.
2. A statement in a decree that an assignee
advertised for one week for bidders on the as-
signed stock of goods was harmless where the
advertisement appeared in a weekly newspaper
three days before the sale.
3. A finding of fact by a circuit judge con-
cerning an occurrence in his presence will not
be disturbed on appeal.
4. A judgment creditor seized his debtor's
goods on execution. The goods were replevied
by one claiming under a d;ed from the debtor
who subsequently assigned for the benefit of
creditors. The seized goods were turned over
to the assignee, who sold the stock to the plain-
tiff in replevin. The deed and assignment were
set aside at the suit of the judgment creditor,
and a receiver was appointed to hold " all assets
now held by the assignee, and all securities
taken by him as assignee." Held, that the
assets taken by the receiver included the pro-
ceeds of the seized goods, and that plaintiff in
replevin should account only for seized goods
which he had appropriated between the time he
replevied them and the date of the debtor's
assignment.
5. A judgment creditor who maintains a credi-
tors' bill for the benefit of himself and the other
creditors does not gain a priority thereby over
the other creditors. Ryttenberg v. Keels, (S.
C.) 17 S. E. 441, distinguished.
6. An assignment for the benefit of creditors
lequired them to file releases. Many creditors
filed such releases, and the assignment was sub-
sequently set aside as fraudulent, and a receiver
was appointed. Held, that in the distribution
of the funds by the receiver the non-releasing
creditors gained no priority over releasing credi-
tors who proved their claims.
Gain Knowledge
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You may Have
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Some-
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The cost is only a trifle—a dollar.
The book is illustrated,
cloth bound, over a hundred pages. It is called "The Piano."
EDWARD LYMAN BILL,
PUBLISHER,
3 B a s t 14th Street, N e w Y o r k .
'