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X-6077 Opinion rendered April 25th, 1928. , 5tiv In the Supreme Court of Florida, January Term, A.D. 1928. Division' £; The Atlantic National Bank of Jacksonville, a; corporation organized and e x i s t i n g under the banking laws of the United States, Appellant, Duval County. v. Frederick 3. Pratt, as Receiver of the Bank of South Jacksonville, a corporation organized and e x i s t ing under the laws of the State of Florida, Arroellee. WHITFIELD, P. J. The amended b i l l of complaint in e f f e c t a l l e g e s that the Bank of South Jacksonville was the regular correspondent of the complainant, the Atlantic National Bank; that on January 10, 1927 and January 11, 1927, the complainant sent to thp Bank of South Jacksonville "for c o l l e c t i o n and remittance in accordance with the u s u a l custom between" the two banks, checks and other items payable by and at or drawn on the Florida Southside Bank; that on December 31, 1926, complainant sent to the South Jacksonville Bank for " c o l l e c t i o n and remittance", a draft due January 10, 1927; that on January 10, 1927, the draft was paid to the Bank of South Jacksonville by chock on t h e F l o r i d a Southside Bank; t h a t on t h e 11th and 12th of January, 1927, t h e Bank of South J a c k s o n v i l l e c o l l e c t e d from the F l o r i d a Southside Bank a l l of s a i d items or checks and c o l l e c t e d and a c t u a l l y r e c e i v e d from the F l o r i d a Southside Bank $11,171.70 in payment f o r s a i d items and checks t h a t the s a i d Bank of South J a c k s o n v i l l e s e n t complainant i n payment of s a i d items i t s checks or d r a f t s payable to complainant, drawn on i t s Hew York correspondent and on complainant, and a t the same time s e n t comp l a i n a n t i t s checks or d r a f t s drawn on the B a r n e t t N a t i o n a l Bank of J a c k s o n v i l l e , a n a t i o n a l banking c o r p o r a t i o n , on the Peoples Bank of J a c k s o n v i l l e , to make good i t s check or d r a f t on complainant. That s a i d checks o r d r a f t s drawn on t h e s a i d B a r n e t t n a t i o n a l Bank of Jacksonv i l l e and on s a i d Peoples Bank of J a c k s o n v i l l e were' each dishonored by t h e s a i d bank r e f u s i n g to pay the same, and s a i d Hew York d r a f t was l i k e w i s e dishonored. The s a i d Bank of South J a c k s o n v i l l e did not have the f u n d s to i t s c r e d i t w i t h complainant to pay the check or d r a f t drawn on comp l a i n a n t u n l e s s t h e checks or d r a f t s drawn on t h e s a i d B a r n e t t N a t i o n a l said Bank of J a c k s o n v i l l e and the/peoples Bank of J a c k s o n v i l l e were paid. That on the 13th day of J a n u a r y , 1927, t h e s a i d Bank of South J a c k s o n v i l l e c l o s e d i t s doors. s a i d bank. F r e d e r i c k B. P r a t t was appointed r e c e i v e r f o r That t h e s a i d Bank of South J a c k s o n v i l l e i s i n s o l v e n t and was i n s o l v e n t b o t h a t t h e time i t r e c e i v e d and a t t h e time i t c o l l e c t e d t h e a f o r e s a i d checks from the F l o r i d a - S o u t h s i d e Bank. And complainant d i d n o t know t h a t t h e s a i d Bank of South J a c k s o n v i l l e was i n s o l v e n t a t s a i d time; t h a t complainant has made demand on t h e defendant r e c e i v e r f o r t h e s a i d sum of Eleven Thousand One Hundred Seventy-one and 70/100 D o l l a r s ($11,171.70) as p r e f e r e n t i a l claim, payable b e f o r e t h e unsecured claims a g a i n s t the s a i d Bank of South J a c k s o n v i l l e a r e p a i d . http://fraser.stlouisfed.org/ f u r t h e r claims Federal Reserve Bank of St. Louis Complainant t h a t i t has a p r e f e r e n c e on t h e a s s e t s of t h e s a i d Bank - 3 - X-6077 of South Jacksonville for the payment of the items herein mentioned. 5 3 But the defendant, as receiver as aforesaid, has refused to allow complainant 1 s claim for said items as a p r e f e r e n t i a l claim and to pay same before paying the unsecured claims. That the claim of complainant has been admitted by the defendant as a lawful and j u s t claim against the a s s e t s in h i s hands, except as to the preference of said claim; that the money received by the Bank of South Jacksonville from the said Florida-Southside Bank was received by said Bank as a trust fund and that t i t l e to said checks at no time passed to the said Bank of South Jacksonville; and that the amount of money so c o l l e c t e d by the said Bajfik of South Jacksonville swelled the funds of the said Bank of South Jacksonville; that the r e l a t i o n of debtor and creditor did not a r i s e between complainant and the said Bank of South Jacksonville by reason of said c o l l e c t i o n s . By amendment i t i s alleged that the said Bank of South Jacks o n v i l l e had with complainant a real credit balance of Eleven Hundred Seventeen and 94/100 Dollars ($1117.94) on the 13th day of January, 1927, at the time i t s a f f a i r s were taken over by the Comptroller. And by further amendment the b i l l of complaint a l l e g e s that i t wap the custom and understanding between complainant and the said Bank of Sop.th Jacksonville at the time the items heretofore mentioned were sent to said Bank of South Jacksonville for c o l l e c t i o n , that said Bank of South Jacksonville should remit to complainant the amount of money colthe lepted each day on the day/same was c o l l e c t e d . That there was no understanding by agreement of custom between the said Bank.of South Jacksonv i l l e and complainant that complainant should give any credit or allow the said Bank of South Jacksonville any l a t i t u d e in the time of remit ting for items sent for c o l l e c t i o n by complainant, That complainant kept - 4 - , X-6077 538 no account with the said Bank of South Jacksonville and had no credit balance with said Bank of South Jacksonville; and there were no reciprocal or mutual accounts of any kind between complainant and the said Bank of South Jacksonville. The prayer i s that complainant be decreed a p r e f e r e n t i a l claim over unsecured creditors of the Bank of South Jacksonville and f o r general relief. The defendant receiver demurred on grounds that: 1. Said l a s t amendment adds no new matter and i s immaterial and irrelevant. 2. The issue" attempted to be raised by said amendment has already been decided by t h i s court in t h i s cause adverse to complainant. 3. Said amended b i l l of complaint shows on i t s face that complainant i s not e n t i t l e d to a preference. 4 . I t does not appear that complainant i s able to trace and locate any trust fund. 5. It appears from the a l l e g a t i o n s of said amended b i l l of complaint that complainant i s a general and not a preferred creditor. 6. It appears from the a l l e g a t i o n s of said amended b i l l of complaint that t i t l e to said check and i t s proceeds passed to the Bank of South Jacksonville and that the r e l a t i o n of principal and agent had ended. 7. It appears from the a l l e g a t i o n s of said b i l l of complaint that said Bank of South Jacksonville was used by the complainant as i t s c o l l e c t i n g agent for many i t e n s and was authorized to c o l l e c t and mingle funds, and that said Bank of South Jacksonville was indebted to the complainant upon a balance of accounts and was under no obligation to f o r - - 5 - X-6077 ward to the complainant any s p e c i f i c funds, 8. It appears from the a l l e g a t i o n s of the amended b i l l of complaint that complainant accepted from said Bank of South Jacksonville the draft or check of said Bank of South Jacksonville in payment of the items mentioned in the amended b i l l of complrint. The court', sustained the demurrer on the 3rd, 5th, 6th and 7th grounds. The complainant appealed. Where A. bank remits to B. bank several items of negotiable paper "for c o l l e c t i o n and remittance according to the custom and understanding between" the banks, viz: that B. bank should remit to A. bank "the amount of money c o l l e c t e d each day on the day the same was collected", and 3. bank c o l l e c t s the several items from other banks or persons and remits to A. bank checks of . E.. bank on other banks for the amounts of the c o l l e c t i o n s , b u t such checks are not paid in due course because of the f a i l u r e of B. bank a f t e r making the c o l l e c t i o n s and a f t e r remitting i t s checks therefor, but before the checks of B. bank are paid, and there was no commingling of funds by consent and no reciprocal accounts or deposits between the two banks, 3. bank having no account with a balance to i t s credit with A. bank but A. bank having no account with B. bank, A. bank i s e n t i t l e d to a preference in payment by the receiver of 3. bank for the c o l l e c t i o n s made. See State Hat, Bank of L i t t l e Hock v. P.N.Bank of Achison Kan. 124 Ark. 531, 187 S.W.Rep. 673; Bank of Poplar B l u f f , vs. M i l l s , Pough., 313 Mo. 412, 281 S.W.Hep. 733, Fed Res. 3k. of Rich. v. Pejers 139 7a. 45, 123 S.E.Rep. 379, 42 A.L.R. 742. Reversed. Rerrell and Buford J. J . , Concur. http://fraser.stlouisfed.org/ E l l i s , C. J. Federal Reserve Bank of St. Louis and Strum and Brown, J. J . , Concur in the opinion and judgment.
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