Bank of Hunter v. Gros

Hart, J., (after stating the facts). The correctness of the decree of the chancellor depends upon the construction to be given to an act of the General Assembly of 1921, amending the original act for the organization and control of banks. General Acts of 1921, page 514. Section 14 of the act is set out in full in Farmers’ & Merchants’ Bank v. Ray, 170 Ark. 293, 280 S. W. 984, and need not be repeated here. In this case the court held that, under the section referred to, a bank receiving for collection a check or draft payable in another city or town, and having employed reasonable care to select a proper correspondent, is not liable for the default or negligence of such correspondent in the collection of the check or draft. The evidence in this case was not sufficient to warrant the chancellor in finding that the Bank of Hunter was guilty of any negligence in the selection of its correspondent,'and it did not warrant a finding that there was any negligence on the part of -the Bank of Hunter in forwarding the draft for collection. •The undisputed evidence shows, that the Bank of Hunter forwarded the draft for collection through its correspondent in Little Bock in the regular course of business, and that the draft was at first returned uncoL lected without being protested, but that this was not through any default ón the part of the Bank of Hunter. It happened simply- through a mistake in the Louisiana bank to which the Little Bock correspondent of the Bank of Hunter had forwarded the draft for collection.' Immediately on the return of the draft, the Bank of Hunter notified Gros, and," pursuant to -his directions,' sent the draft to the Louisiana bank for collection. The. draft was then returned by the Louisiana-bank, duly protested for nonpayment because Snoke refused to receive the car of rice and pay for same, claiming that it- was not up to standard. These facts show that there was' no negligence whatever on the part of the Bank of Hunter, and for that reason, under the rule in the case above cited, the Bank of Hunter was not liable to Gros. It follows that the decree of the chancery court must be reversed, and, inasmuch as the facts appear to have been fully developed, the cause of action will be dismissed.