Federal Reserve Bank of Philadelphia v. Algar

BUFFINGTON, Circuit Judge. In the court below the Federal Reserve Bank of Philadelphia (hereafter called Federal) brought suit against the defendants to recover on a note given by them to the Atlantic City National Bank, Atlantic City, N. J. (hereafter called Bank), which note was thereafter discounted and owned by Federal. On trial there was a verdict for defendants and on entry of judgment Federal took this appeal, and the question involved is whether the court erred in refusing Federal’s request for binding instructions in its favor. After consideration had, we are of opinion that under the proofs the court would have erred had it refused to send the case to the jury. By reference to the opinion of the court below on a motion for a new trial, we avoid repetition and rest our decision on such opinion. In doing so we ¡note that in Federal Reserve Bank of Richmond v. Kalin, 4 Cir., 81 F.2d 1003, 1004, ■the lacking proofs were as noted, “Defendant introduced no evidence to show that plaintiff had authorized the payee bank to collect the note sued on or any notes other than those sent payee from time to time for collection”; a situation decidedly different from that in the present case. Here we have the testimony of Riley, the note teller of Bank, who testified: “Q. After you had received Mr. Algar’s check and issued a receipt what did you next do with respect to this transaction? A. I put the check through the work and then went to the telephone and called the Federal Reserve Bank, the discount department. “Q. Did you reach the Federal Reserve? A. I did. [942] "Q. To what department did you talk? A. Discount department. * * * “Q. And what response did you receive from the discount department of the Federal Reserve when you reported payment of the Algar note? A. O. K.” Another employee of Bank testified, “we have been borrowing money from the Federal Reserve for four or five years before that off and on,” arid that during all these four years previous Bank had sent out 'notices to its customers that their notes might be paid on the due date at the Bank, even though these notes had been pledged to the Federal Reserve, and that it was the custom of that bank, a few days before the notes fell due, to send them to the Atlantic Bank; that notes were paid before matu'rity several times a week. As to the customary practice, the witness testified: “Q. And can you tell us with whom you may have discussed these matters ? A. Many times with Mr. Davis. “Q. And when I say discussed papers, do you understand I mean the collection of the customers’ notes ? A. I mean the method of dealing with the Federal Reserve and with my customers. “Q. And was your course of conduct, or the course of conduct of the Atlantic City National Bank, the result of the instructions you had received from Mr. Davis and others in that regard? A. We always tried to co-operate, certainly. “Q. Was the answer yes ? A. Certainty- “Mr. Endicott: That is all.” Cross-Examination, “By Mr. Cole: “Q. Did the Atlantic City National Bank have written instructions from the Federal Bank touching the terms under which collateral was held and of the disposition to be made of it? A. There are a vast number of bulletins received from them. * * “Q. Then it is not your contention that you always took up the telephone and told the Federal? A. Yes. "Q. Always? A. Yes.” The practice of receiving calls was testified to by an executive officer of Federal: “Q. Was it the practice of your department to receive 'telephone calls reporting the payment of notes which you held as collateral when the notes had been paid in the bank, from which you had taken it as collateral? A. We received frequent calls from all over the district.” Under the proofs as to the customary, practice between' Bank and Federal and in view of the telephone conversation in regard to this particular note, we feel the court was justified in submitting the question of agency to the jury. The judgment below is, therefore, affirmed. On Reargument. After argument and full consideration had, we see no reason to change the views expressed in the original opinion. Accordingly, the judgment below is affirmed.