Durkee v. National Bank of Florida

SHELBY, Circuit Judge, after stating the case as above, delivered the opinion of the court. The defendant bank held the three notes of Mason Young, receiver of the Jacksonville, Tampa & Key West Railway Company, for $12,-(>66.67 each, dated August 10, 1892, and due, respectively, at three, four, and five months after date. These notes were given for money advanced by the bank. This 'money was placed with other money to Young’s credit as receiver. When the notes became due the bank charged them to Young’s account. In other words, it used the funds on deposit to pay these notes. It required all the funds that were to Young’s credit to pay his notes. The controlling question in this case is, did the bank have the right to do this? If the bank had the right to apply these funds to the payment of these notes, then the plaintiff in error, as the successor of Young in the receivership, has no just claim against the bank. The money was in the bank as a general deposit. The effect of such deposit is to make the money the property of the bank, and the bank the debtor of the depositor. No trust exists in such cases. The bank does not. hold the money as bailee. When, therefore, these notes fell due, the bank had the right to apply the deposits to their payment. Having done this, it was not indebted to Young or to his successor in the receivership. 2 Morse. Banks (3d Ed.) § 559; 1 Morse, Banks (3d Ed.) § 324; Bank v. Hughes, 17 Wend. 94; Scammon v. Kimball, 92 U. S. 362, 23 L. Ed. 483; Lehman v. Manufacturing Co., 64 Ala. 567, 595; Schuler v. Bank, 27 Fed. 424; 3 Am. & Eng. Enc. Law (2d Ed.) 835, and cases there cited. It is not necessary to file a plea of set-off, to make this defense. The pleas filed were sufficient for that purpose. One of the pleas was to the effect that the defendant bank was never indebted to the plaintiff as alleged. Other pleas were to the effect that the defendant bank did not have in its possession the sum of $28,059.37, or any sum, deposited with it by Mason Young as receiver. These pleas were sustained by the findings of the court. When it was shown that the .bank held Young’s notes as receiver for an amount which equaled the deposits, and that the deposits ha.d been applied to the payment of these notes, a good defense was proved under these pleas. The judgment of the circuit court is affirmed.