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X-716§ COPY IN THE SUPREME COURT Of TBS STATS OF WASHINGTON THE STATE OF WASHINGTON, ex r e l . KERN Aim KIBBE, a c o r p o r a t i o n , Plaintiff, Petitioner, v. ) ) ) ) ) ) No. 23725 Department One ) CHARLES W. HINTON, as S t a t e Treasurer of t h e S t a t e of Washington, Defendant, Respondent. ) ) ) ) ) F i l e d May 11, 1932. PER CURIAM: This i s an o r i g i n a l a c t i o n i n t h i s court "by which Kern & Kibbe, a c o r p o r a t i o n , by p e t i t i o n seeks a w r i t of mandate d i r e c t i n g t h e s t a t e t r e a s u r e r t o pay t o t h e p l a i n t i f f out of moneys i n t h e s t a t e t r e a s u r y t o t h e c r e d i t of t h e motor v e h i c l e fund $20,587.48 i n s a t i s f a c t i o n of warrants issued t o p l a i n t i f f by the s t a t e a u d i t o r drawn and d i r e c t e d t o t h e s t a t e t r e a s u r e r . The f a c t s i n t h e case a r e presented "by t h e pleadings and a w r i t t e n s t i p u l a t i o n signed by the p a r t i e s and f i l e d i n the cause, s u b s t a n t i a l l y as f o l l o w s : The p l a i n t i f f i s a c o r p o r a t i o n . Hinton, was and i s t r e a s u r e r of the s t a t e . Respondent, Charles W. During J a n u a r y , 1932, t o and i n c l u d i n g the t w e n t y - f i r s t day of the month, t h e Olympia National Bank was a n a t i o n a l banking a s s o c i a t i o n , doing business i n Olympia, Washington. That a t the c l o s e of business on January 21, 1932, the Olympia National Bank closed i t s doors and discontinued t h e doing of b u s i n e s s , and t h e next morning t h e bank and i t s a s s e t s were taken over f o r l i q u i d a t i o n by t h e comptroller of the currency of t h e United S t a t e s . That on January 13, 1932, on account of the completion by p l a i n t i f f of two c o n t r a c t s f o r the c o n s t r u c t i o n and improvement of c e r t a i n highways, the s t a t e became indebted to p l a i n t i f f i n the sum of $20,578.48 f o r which, 3 6 5 23725 X*7165 3 6 6 upon claims and vouchers cldly ptb&ehted* t h e s t a t e a u d i t o r a f t e r s e t t l i n g and allowing t h e same signed and d e l i v e r e d , as such a u d i t o r , two s t a t e warrants on t h e s t a t e t r e a s u r y t o pay t h e r e s p e c t i v e amounts of $8043.48 and $12,535.00 out of any moneys i n the motor v e h i c l e f i n d i n t h e s t a t e t r e a s u r y not otherwise a p p r o p r i a t e d . On January 15, 1932, t h e p l a i n t i f f endorsed and d e l i v e r e d "both warrants t o t h e F i r s t National Bank of P o r t land, Oregon, f o r c o l l e c t i o n and on the same day t h a t hank forwarded t h e w a r r a n t s , w i t h o t h e r s "belonging t o other persons, t o the respondent as s t a t e t r e a s u r e r f o r payment, a l l of which were accepted "by t h e s t a t e t r e a s u r e r and f o r which he issued checks to cover t h e r e s p e c t i v e amounts and forwarded the checks to t h e Portland "bank, t h e checks "being drawn "by the s t a t e t r e a s u r e r on the Olympia National Bank payable to t h e F i r s t National Bank of P o r t l a n d , or o r d e r . The Portland "bank, upon r e c e i p t of the checks on January 19, 1932, forwarded them by mail t o the S e a t t l e "branch of the Federal Reserve Bank of San Francisco f o r c o l l e c t i o n and, on January 20, 1932, t h a t "bank forwarded the checks "by mail t o t h e Olympia National Bank f o r c o l l e c t i o n , and the l a t t e r named "bank r e c e i v e d t h e checks on January 21, 1932. At the time t h e checks were forwarded f o r c o l l e c t i o n and a t the time they were received "by t h e Olympia National Bank, i t was a designated d e p o s i t o r y f o r the funds of t h e s t a t e and the s t a t e t r e a s u r e r had t h e r e i n t o h i s c r e d i t , subject t o check, an amount i n excess of t h e checks involved. Upon r e c e i p t of t h e checks, the Olympia National Bank charged them to t h e account of the s t a t e t r e a s u r e r on t h e "bank's "books and marked the checks "Paid", "but the "bank i n no way s e t a p a r t or s e g r e gated any of i t s money f o r transmission t o e i t h e r the S e a t t l e "branch of the Federal Reserve Bank of San Francisco or to the P o r t l a n d "bank i n s e t t l e m e n t or payment of the checks, "but on January 21, 1932, drew i t s 2 23725 X-7165 d r a f t i n t h e sum of $29 *659*19 t o o.0\ffer t h e checks involved, and other itemd* on t h e F i r s t National Bank of S e a t t l e , payable t o t h e S e a t t l e branch of the Federal Reserve Bank of San F r a n c i s c o , and forwarded t h e d r a f t by mail on t h a t day to the S e a t t l e branch of t h e Federal Reserve Bank. The amount of cash i n t h e Olympia National Bank a v a i l a b l e f o r the payment of checks a t the c l o s e of b u s i n e s s the l a s t f o u r days the bank was open amounted t o t h e following sums: January 18, $45,098,43; January 19, $42,620.76; January 20, $40,172.42, January 21, $27,255.24. At t h e close of b u s i n e s s on January 21, t h e bank had to i t s c r e d i t with banks other than t h e F i r s t National Bank of S e a t t l e , $44,679.00, based i n p a r t on items t r a n s m i t t e d t o such banks f o r c o l l e c t i o n , over and above the amount of a l l d r a f t s drawn a g a i n s t such other banks, but t h e r e was no i n f o r m a t i o n a v a i l a b l e on January 21, or a t t h e d a t e of t h e s t i p u l a t i o n of f a c t s i n t h e a c t i o n , t o show the amount of such c o l l e c t i o n items t r a n s m i t t e d or the amount thereof not c o l l e c t e d a t t h a t d a t e . I t appears t h a t on January 21, a f t e r the s t a t e t r e a s u r e r gave a check on the Olympia National Bank, f o r which t h a t bank i s s u e d i t s d r a f t on t h e F i r s t National Bark of S e a t t l e , the s t a t e t r e a s u r e r gave t o t h e Capital National Bank of Olympia a check on the Olympia National Bank i n the sum of $52,981.58 f o r t h e purpose of paying s t a t e warrants being c o l l e c t e d through t h e agency of the Capital National Bank, which check was p a i d by means of t e l e g r a p h i c t r a n s f e r of funds from t h e account of t h e Olympia National Bank with the S e a t t l e branch of t h e Federal Reserve Bank t o t h e account of the C a p i t a l National Bank. At t h a t time t h e Federal Reserve Bank r e q u i r e d a r e s e r v e t o be kept w i t h i t by the Olympia National Bank i n t h e sum of approximately $120,000.00, and the payment of 3 23725 X-7165 3 6 8 the check j u s t mentioned "by telegitB,phic t r a n s f e r reduced t h e balance of c r e d i t of the Olympia n a t i o n a l Bank with the S e a t t l e branch of t h e Fede r a l Reserve Bank t o the sum of $29,090.00. At the time t h e d r a f t i n question was forwarded to t h e "bank i n S e a t t l e , the Olympia National Bank did not have, nor did i t t h e r e a f t e r have, money or c r e d i t with the F i r s t National Bank of S e a t t l e s u f f i c i e n t to meet i t . The F i r s t National Bank of S e a t t l e r e f u s e d t o honor the d r a f t when p r e s e n t e d and i t has a t a l l t i n e s s i n c e been dishonored. I t had been a p r a c t i c e between t h e Olympia National Bank and the F i r s t National Bank of S e a t t l e t o g i v e c r e d i t f o r c a s h l e t t e r s when received and to charge back items not c o l l e c t e d , b u t on January 20. 1932. and a t a l l times t h e r e a f t e r the F i r s t National Bank of S e a t t l e r e f u s e d to give t h e Olympia National Bank c r e d i t f o r such cash l e t t e r s u n t i l and as t h e items were a c t u a l l y c o l l e c t e d , but notwithstanding such r e f u s a l t h e Olympia National Bank, upon i s s u i n g the d r a f t on January 21, 1932 and a t the c l o s e of b u s i n e s s t h a t day, had outstanding d r a f t s on t h e F i r s t National Bank of S e a t t l e i n the t o t a l sum of $98,647.29-, which was $5,054.72 i n excess of a l l cash items t r a n s m i t t e d by the Olympia National Bank t o t h e F i r s t National Bank of S e a t t l e f o r c o l l e c t i o n , whether c o l l e c t e d or not a t the time, as was known to t h e Olympia National Bank, as t h a t amount, i n t h a t account, was entered as an o v e r d r a f t i n t h e books of t h e Olympia National Bank t h a t day. Upon dishonor of the d r a f t and n o t i c e thereof t o i n t e r e s t e d p a r t i e s , the S e a t t l e branch of the Federal Reserve Bank, upon demand, received from the r e c e i v e r of the Olympia National Bank the checks i n question which were r e t u r n e d t o the F i r s t National Bank of P o r t l a n d and by t h a t bank r e t u r n e d t o t h e s t a t e t r e a s u r e r upon h i s r e q u e s t and demand. 4 X-VIGSL 23725 3 6 9 At a l l times mentioned and tidW t h e r e was and i s i n the motor v e h i c l e fund i n the s t a t e t r e a s u r y s u f f i c i e n t a v a i l a b l e f u n d s , not otherwise a p p r o p r i a t e d , f o r the payment of the warrants i n f a v o r of p l a i n t i f f . The defendant r e s t s h i s case on the general Tirell s e t t l e d r u l e t h a t a c o l l e c t i n g agent i s without a u t h o r i t y t o accept f o r t h e debt of h i s p r i n c i p a l anything "but • t h a t which the law d e c l a r e s t o be l e g a l t e n d e r , or as s t a t e d by the defendant to be the r u l e so f a r as t h i s case i s concerned i f the payee of a check, or h i s a g e n t , a c c e p t s from t h e drawee bank something e l s e i n p l a c e of cash, as a d r a f t on another bank, or a deposit s l i p or c r e d i t , where the drawee bank holds funds of the drawer s u f f i c i e n t t o pay t h e check and would pay i t i n cash i f demand t h e r e f o r e were made, the t r a n s a c t i o n w i l l be regarded as a payment of the check and t h e drawer d i s c h a r g e d . Counsel r e l y on F i r s t National Bank v . Commercial Bank & Trust Co., 137 Wash, 335, and cases c i t e d , and a l s o t h e cases l i s t e d , commencing on page 994, i n the a n n o t a t i o n to the case of Berg v . F e d e r a l Reserve Bank, 52 A.L.R. 980. The p l a i n t i f f , while c o n t e s t i n g the common law r u l e , r e l i e d on by the defendant and hence i t s a p p l i c a b i l i t y as such t o t h i s c a s e , contends t h a t the case i s c o n t r o l l e d i n favor of p l a i n t i f f by c e r t a i n p r o v i s i o n s of Chapter 203, Laws of 1929, declared t o be "The Bank C o l l e c t i o n Code", the t i t l e of the a c t being "An a c t t o expedite and s i m p l i f y the c o l l e c t i o n and payment by banks of checks and other instruments f o r the payment of money." I t contains a number of i n t e r r e l a t e d p r o v i s i o n s as i s usual i n such a code, r e g u l a t i n g c o l l e c t i o n s by mail and d e f i n i n g the r e l a t i o n and powers of each bank t a k i n g p a r t i n c o l l e c t i o n s as agent or sub-agent of the o r i g i n a l d e p o s i t o r . The p a r t i c u l a r p o r t i o n of the a c t upon which t h e 5 23725 X-7165 p l a i n t i f f r e l i e s , as c o n t r o l l i n g the pi'esetit case, i s a p a r t of s e c t i o n 11, as f o l l o w s : ^Where an item i s duly presented "by mail to the drawee or payor, whether or not t h e same has been charged to the account of t h e maker or drawer thereof or r e t u r n e d to such maker or drawer, the agent c o l l e c t i n g hank so p r e s e n t i n g may, a t i t s e l e c t i o n , e x e r c i s e d with reasonable d i l i g e n c e , t r e a t such item a s dishonored by non-payment-and recourse may he had upon p r i o r p a r t i e s t h e r e t o i n any of t h e f o l l o w i n g cases: " ( l ) Where t h e check or d r a f t of t h e drawee or payor hank upon another hank r e c e i v e d i n payment t h e r e f o r s h a l l not he paid i n due course;" On the other hand, the defendant contends t h a t i f i t he admitted t h a t the hank c o l l e c t i o n code would otherwise apply or c o n t r o l , i t a f f o r d s no r e l i e f t o the p l a i n t i f f i n t h i s case because of s e c t i o n 7, which p r o v i d e s ; "Where the item i s received by mail by a solvent drawee or payor bank, i t s h a l l be deemed paid when the amount i s f i n a l l y charged to the account of t h e maker or drawer." The c o n d i t i o n , however, upon which t h e item r e c e i v e d by mail by the drawee or payor bank s h a l l be deemed paid when f i n a l l y charged to the account of the maker or drawer i s t h a t such bank s h a l l be s o l v e n t . In t h i s r e s p e c t , on account of the f a c t s h e r e i n b e f o r e s t a t e d , to which t h e p a r t i e s have agreed by t h e i r pleadings and w r i t t e n s t i p u l a t i o n f i l e d i n t h e a c t i o n , we t h i n k i t must be h e l d , f o r t h e purposes of t h i s c a s e , t h a t the drawee or payor bank on which the d e f e n d a n t ' s checks were drawn was not solvent a t t h e time t h e bank received t h e checks and stamped them "Paid", w i t h i n t h e purview of s e c t i o n 7 of t h e bank c o l l e c t i o n code. S t i l l f u r t h e r we a r e of the opinion, upon the f a c t s a s t h e p a r t i e s have s t i p u l a t e d them t o b e , t h a t the p o r t i o n of s e c t i o n 11 of the bank c o l l e c t i o n code above mentioned, on which t h e p l a i n t i f f r e l i e s , i s a p p l i c a b l e and c o n t r o l l i n g i n t h i s case, from which the conclusion f o l l o w s t h a t t h e 6 370 23725 X-7165 p l a i n t i f f i s e n t i t l e d to the r e l i e f jjfajred f o r i IT IS OBDERED AM) ADJUDGED t h a t a w r i t of mandate i s s u e d i r e c t i n g the defendant Charles W. Hinton, a s s t a t e t r e a s u r e r , to pay to t h e p l a i n t i f f , Kern & Kihbe , a c o r p o r a t i o n , out of moneys i n t h e s t a t e t r e a s u r y to t h e c r e d i t of the motor v e h i c l e fund, the sum of $20,587.48 i n s a t i s f a c t i o n of the two warrants issued t o the p l a i n t i f f "by t h e s t a t e a u d i t o r . 7 X-7165-a COPY IN d?HS SUPRSvIE COURT OffrHSSTATfi Of WASHINGTON THE STATS OF WASHINGTON, ex r e l UNION IRON WORKS, a corporation [ No. 23726 Department One Plaintiff v. CHARLES W. HINTON, as S t a t e Treasurer of t h e S t a t e of Washington F i l e d May 11, 1932 Defendant P3R CURIAM: This i s an o r i g i n a l a p p l i c a t i o n in t h i s court f o r a w r i t of mandate d i r e c t i n g Charles W. Hinton, as s t a t e t r e a s u r e r , to pay to t h e p l a i n t i f f out of moneys in the s t a t e t r e a s u r y to the c r e d i t of the motor v e h i c l e fund No. 15 the sum of $325.00 i n payment of a warrant dated January 15, 1932, issued to the p l a i n t i f f by t h e s t a t e a u d i t o r f o r m a t e r i a l and s u p p l i e s f u r n i s h e d and d e l i v e r e d by the p l a i n t i f f to and f o r the use of the department of highways of t h e s t a t e between the second and t e n t h days of December, 1931. The case i s a companion of the case of S t a t e , ex r e l . Kern & ICibbe v. Hinton, a n t e , p . , the two cases being p r e s e n t e d in the same b r i e f s and argued t o g e t h e r by r e s p e c t i v e counsel. The f a c t s a r e agreed to by t h e p l e a d i n g s and a signed s t i p u l a t i o n of f a c t s , the l a t t e r being included in and a p a r t of t h e s t i p u l a t i o n covering t h e f a c t s in the other case. Here, too, t h e Olympia National Bank, through which c o l l e c t i o n was attempted by m a i l , issued a d r a f t on January 21, 1932, the l a s t day t h e bank was open f o r b u s i n e s s , drawn on the F i r s t National Bank of S e a t t l e , which d r a f t was dishonored and never p a i d . v 372 — 2 — 23726 X-7165-a i The case i s , i n a l l m a t e r i a l r e s p e c t s , l i k e t h a t of t h e companion one j u s t r e f e r r e d to and upon the a u t h o r i t y of t h a t case and t h e f a c t s i n t h i s one; IT IS ORDERED AND ADJUDGED t h a t a w r i t of mandate i s s u e d i r e c t i n g the defendant Charles T. Hinton, a s s t a t e t r e a s u r e r , to pay to the p l a i n t i f f Union Iron Works, a c o r p o r a t i o n , out of moneys i n the s t a t e t r e a s u r y to the c r e d i t of t h e motor v e h i c l e fund Uo. 15, the sum of $325.00 i n s a t i s f a c t i o n of the warrant issued to t h e p l a i n t i f f by t h e s t a t e a u d i t o r . 373 374 X-7165-b COPY IK THE SUPRBtS o r TH$ STATE OF WASHINGTON THE STATE OF WASHINGTON, ex r e l . UNION IRON WORKS, a c o r p o r a t i o n , No. 23726 Plaintiff PETITION FOE REHEARING v. CHARLES W. HINTON, a s S t a t e Treasurer of the S t a t e of Washington, Defendant Comes now the defendant, Chas. W. Hinton, and r e s p e c t f u l l y p e t i t i o n s t h e c o u r t f o r a r e h e a r i n g in the above e n t i t l e d matter f o r t h e f o l l o w i n g reasons; t h e PER CURIAM opinion f i l e d May 11, 1932, does not s t a t e t h e f a c t s involved in t h i s case but the conclusion reached i s based e n t i r e l y upon the a u t h o r i t y of the case of S t a t e ex r e l . Kern and Kibbe v. Hinton, No. 23725. a s a t e s t case. This case was i n s t i t u t e d While the amount involved in t h i s p a r t i c u l a r case i s small, t h e t o t a l amount of warrants in the same p o s i t i o n a s the warrant in t h i s case i s approximately $100,000.00. Under the f a c t s as c l e a r l y appear in the pleadings and s t i p u l a t i o n , these warrants were p r e s e n t e d by the Olympia National Bank to the s t a t e t r e a s u r e r , the s t a t e t r e a s u r e r gave the Olympia National Bank h i s check drawn a g a i n s t h i s account in the Olympia National Bank, which check was charged to the t r e a s u r e r ' s account, marked "paid" and cancelled and h i s account thereby reduced by t h e t o t a l amount of such checks. The s t a t e t r e a s u r e r i s now compelled under t h i s d e c i s i o n to pay a l l of these warrants again. The . 375 - 2 - X-7165-b r e c e i v e r of t h e oiympia National Baiilt has intimated t h a t he w i l l not allow t h e s t a t e t r e a s u r e r ' s claim f o r these items f o r the reason t h a t , i f claims on these warrants a r e allowed to the t r e a s u r e r , he can hold h i s s e c u r i t y f o r the same, while, i f they a r e allowed to t h e persons forwarding the warrants f o r c o l l e c t i o n , they would be unsecured and t h e r e f o r e the amount a v a i l a b l e to unsecured c r e d i t o r s i n c r e a s e d . I t probably w i l l be n e c e s s a r y f o r the s t a t e t r e a s u r e r to b r i n g an a c t i o n a g a i n s t the r e c e i v e r i n order to e s t a b l i s h a claim f o r the amount of the se w a r r a n t s , approximately $100,000.00, s i n c e , of course, t h i s decision i s not binding upon t h e r e c e i v e r of the Oiympia National Bank. This s u i t would have to be i n s t i t u t e d in Federal c o u r t , s i n c e the bank i s a n a t i o n a l bank and the r e c e i v e r a Federal o f f i c e r , l i q u i d a t i n g the bank under the a u t h o r i t y of t h e comptroller of the currency. Federal c o u r t i s not bound by t h i s d e c i s i o n . The The r u l e , i s , however, t h a t t h e c o n s t r u c t i o n of a s t a t e s t a t u t e by a s t a t e court i s binding on a Federal c o u r t . Counsel and the c o u r t , knowing the f a c t s in t h i s c a s e , understand, of course, t h a t t h e court has h e l d t h a t s e c t i o n 11 of the c o l l e c t i o n code (chap. 203, L. 1929) c o n t r o l s i n t h i s case t h e same a s i n the Kern and Kibbe case. However, t h e f a c t s not being s t a t e d in the opinion, t h e opinion i s of l i t t l e value a s a u t h o r i t y f o r use in the Federal c o u r t . Any person r e a d i n g t h e two opinions would n a t u r a l l y assume t h a t the f a c t s were t h e same in both cases; however, t h e r e i s a v i t a l d i s t i n c t i o n i n the f a c t s . In the g e m and Kibbe case, the s t a t e t r e a s u r e r ' s check was payable to t h e F i r s t National Bank of P o r t l a n d and by t h a t bank sent f o r c o l l e c t i o n to the Oiympia n a t i o n a l t - 3 - 376 X-7165-b Bank and. by t h e Olytipia National Sank charged td t h e t r e a s u r e r ' s account and marked " p a i d . " In t h i s case, the s t a t e t r e a s u r e r ' s check was payable to the Olymoia National Bank and accepted by t h a t bank in payment of w a r r a n t s , which warrants were d e l i v e r e d to t h e s t a t e t r e a s u r e r and cancelled. In c i t i n g t h i s case a s a u t h o r i t y i n the Federal c o u r t , the court would not know from the opinion th e s e f a c t s . The c o u r t can r e a d i l y a p p r e c i a t e the p r e c a r i o u s p o s i t i o n of the s t a t e t r e a s u r e r . I t i s e n t i r e l y p o s s i b l e t h a t t h e Federal court would, not follow t h i s court on the m e r i t s . However, the c o n s t r u c t i o n p l a c e d by t h i s court on s e c t i o n 11, chapter 203, Laws of 1929, would be binding on the Federal c o u r t . I t i s t h e r e f o r e e s s e n t i a l from t h e stand- p o i n t of the s t a t e t r e a s u r e r t h a t the f a c t s be s t a t e d i n t h e opinion in t h i s case, so t h a t i t w i l l c l e a r l y appear t h a t s e c t i o n 11 of the c o l l e c t i o n code c o n t r o l s . If the court has construed the f a c t s in t h i s case to be s i m i l a r i n a l l e s s e n t i a l s to the f a c t s in the Kern and Kibbe case, then we r e s p e c t f u l l y submit t h a t t h e court has misconstrued the p l e a d i n g s and t h e s t i p u l a t i o n , f o r i t c l e a r l y appears t h a t the check involved i n t h i s case was not r e c e i v e d by mail by the Olympia National Bank but was delivered, d i r e c t l y to the Olympia National Bank payable to t h e Olyrnpia n a t i o n a l Bank and by i t accepted and charged to the t r e a s u r e r ' s account. These f a c t s a r e m a t e r i a l l y d i f f e r e n t from the f a c t s in t h e Kern and Kibbe c a s e , and, as we p o i n t e d out in our b r i e f s , the p r o v i s i o n s of the c o l l e c t i o n code do not apply under t h i s s t a t e of f a c t s , and i t i s r e s p e c t f u l l y requested, t h a t a r e h e a r i n g be granted in t h i s case b e f o r e t h e court en banc. I 377 - 4 - X-7165-t I f , however, t h e court should o v e r r u l e our p e t i t i o n f o r r e h e a r i n g , i t i s r e s p e c t f u l l y requested t h a t the opinion f i l e d h e r e i n he modified to c l e a r l y s t a t e the f a c t s . If t h i s i s done, then the opinion can he used aa a u t h o r i t y in an a c t i o n by t h e s t a t e t r e a s u r e r a g a i n s t t h e r e c e i v e r of the Olympia National Bank i n the Federal c o u r t . R e s p e c t f u l l y submitted, JOHIT H. DTJKBAR Attorney General LESTER T. PARKER A s s i s t a n t Attorney General Attorneys f o r Defendant Chas. W. Hinton, as S t a t e Treasurer. X-7165-c 3 7 8 COPY IN THE SUPREME COURT OF THE STATE OF WASHINGTON THE STATE OF WASHINGTON, ex r e l . UNION IRON WORKS, a c o r p o r a t i o n , Plaintiff, ) ) ) v. No. 23726 Department One CHARLES W. HINTON, a s s t a t e Treasurer of the S t a t e of Washington, Defendant. F i l e d May 20, 1932 PUR CURIAM! Upon f u r t h e r c o n s i d e r a t i o n of t h i s case we a r e of the opinion t h a t the second paragraph of the opinion f i l e d in t h i s case on May 11, 1932, which second paragraph commences with the words "The case i s a companion of the case of S t a t e , ex r e l . Kern & Kibbe v . Hinton", and ending with the words "which d r a f t was dishonored and never p a i d " should "be s t r i c k e n and in i t s stead the following should be and i s d i r e c t e d to be i n s e r t e d , t o - w i t : "The case i s a companion of •p. S t a t e ex, r e l . Kern & Kibbe v . Hinton, a n t e , . . the two cases being p r e s e n t e d in the same b r i e f s and argued t o g e t h e r . The f a c t s a r e a g r e e d to by the pleadings and a signed s t i p u l a t i o n of f a c t s f i l e d i n the c a s e , the l a t t e r being included in and a p a r t of the s t i p u l a t i o n covering the f a c t s in the o t h e r c a s e . In t h i s c a s e , on account of m a t e r i a l and s u p p l i e s f u r n i s h e d the s t a t e f o r i t s department of highways, the warrant r e f e r red to in the sum of $325.00 payable to the p l a i n t i f f ' o r order* was, on January 15, 1932, i s s u e d by the s t a t e a u d i t o r and d e l i v e r e d to the p l a i n t i f f . On January 19, 1932, p l a i n t i f f endorsed and d e l i v e r e d the warrant to the Old National Bank & Union Trust Company of Spokane f o r c o l l e c t i o n . That bank on t h a t day forwarded the w a r r a n t , with other items, by United S t a t e s mail to the t 379 -a- X-7165-C Olympia National Bank a t Olympia to c o l l e c t and remit the proceeds to the F i r s t National Bank of S e a t t l e f o r the c r e d i t of the Old National Bank & U&ion Trust Company. The items, including the warrant, were received "by the Olympia National Bank through the mail on January 20, 1932, and, on January 21, 1932, with d i v e r s o t h e r s t a t e warrants received by the Olympia National Bank through the mail from o t h e r p e r s o n s , aggregating a l t o g e t h e r $33,118.69, were p r e s e n t e d by the Olympia National Bank t o the s t a t e - t r e a s u r e r f o r acceptance and payment. The defendant, a s s t a t e t r e a s u r e r , accepted and r e c e i v e d a l l such items, including the p a r t i c u l a r warrant involved i n t h i s a c t i o n , and i s s u e d and d e l i v e r e d t h e r e f o r h i s check i n the sum of $33,118.69 drawn on the Olympia National Bank, a d e p o s i t o r y f o r s t a t e f u n d s , and in which bank t h e r e was a t t h a t time on i t s books to the c r e d i t of the respondent an amount in excess of the amount of the check, t o g e t h e r with a l l o t h e r outstanding checks drawn thereon by the s t a t e t r e a s u r e r . The Olympia National Bank on t h a t day charged the check to the respondent on i t s books and marked the check ' p a i d ' , but withdrew or s e t a p a r t no money whatever to pay the same or to remit to the Old National Tfonir & Union Trust Company of Spokane or to the F i r s t National Bank of S e a t t l e f o r the c r e d i t of the Spokane bank or t h e p l a i n t i f f , nor did i t make any purported payment o t h e r than on January 21, 1932, the Olympia National Bank drew and forwarded by mail to the F i r s t National Bank of S e a t t l e i t s d r a f t on and payable to the F i r s t National Bank of S e a t t l e , f o r the c r e d i t of the Old National Bank & Union Trust Company i n an amount s u f f i c i e n t to cover the items forwarded f o r c o l l e c t i o n by the Old National Bank & Union Trust Company, i n c l u d i n g the p a r t i c u l a r warrant involved i n t h i s s u i t . The Olympia N a t i o n a l Bank d i d not a t t h a t time, nor t h e r e a f t e r , have c r e d i t with the F i r s t National Bank of S e a t t l e nor funds i n t h a t bank upon which i t bad a r i g h t to draw s u f f i c i e n t to meet the ? 380 ~3~ X-7165-c d r a f t whereupon the F i r s t N a t i o n a l Bank of S e a t t l e r e f u s e d to accept and pay the d r a f t or to give the Old National Bank & Union Trust Company c r e d i t on account t h e r e o f , which d r a f t has a t a l l times since been dishonored according to n o t i c e thereof given "by the "bank upon which i t was drawn. National Bank ceased to do b u s i n e s s on January 21, 1932, The Olympia At a l l times mentioned h e r e i n and now t h e r e were and a r e in the motor v e h i c l e fund No, 15 in the s t a t e t r e a s u r y s u f f i c i e n t a v a i l a b l e f u n d s , not otherwise a p p r o p r i a t e d , f o r tHe payment of the warrant in f a v o r of p l a i n t i f f , t h a t i s involved i n t h i s action. Other p e r t i n e n t f a c t s a p p l i c a b l e to the c a s e , according to the p l e a d - ings and according to the s t i p u l a t e d f a c t s f i l e d h e r e i n a r e r e f e r r e d to in the opinion in the companion case of Kern & Kibbe j u s t f i l e d . In our opinion, on a l l the f a c t s , a s between these p a r t i e s and f o r the purposes of t h i s case the. Olympia National Bank was i n s o l v e n t a t a l l times on January 21, 1932, and t h a t the f i r s t p a r t of and t h e f i r s t subdivision of s e c t i o n - e l e v e n of the bank c o l l e c t i o n code a r e a p p l i c a b l e to and governing in t h i s case. 1 1 And t h a t the opinion, a s thus changed and amended, c o n s t i t u t e s the d e c i s i o n of the c o u r t and a s such i s t o be recorded in the permanent records and r e p o r t s of the c o u r t .
@FedFRASER