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2. The practice was for Gillespie to draw drafts against his shipments, sale tickets being taken to the defendant bank and the draft presented for payment.

3. The Rappal firm had for ten months prior to the transaction in question, been increasingly overdrawn to the extent of from fifteen to eighteen thousand dollars.

4. The shipment in question arrived in part on Friday, the accompanying drafts immediately presented to defendant and payment refused. No notice of dishonor was sent to Gillespie's bank until Monday.

5. Another portion arrived on Saturday, the crafts were dishonored, but no notice of dishonor given until Monday.

6. The balance of the shipment arrived on Monday on which day all the drafts being dishonored, natice was then sent to Gillespie.

7. All of the proceeds of sale were deposited with the defendant bank.

8. There was no question whatever as to plaintiff's ability to trace and identify his proceeds.

9. On Monday the bank appropriated all of the proceeds of sale to the Rappal firm's overdraft.

The Court expressly refers to the evident intention of the defendant bank, contrary to its promise and agreement with Gillespie and his bank to give notice, to await the deposit of the proceeds and then confiscate them. Also that if notice had been sent at the time of the dishonor of the first drafts on Friday, the other consignment would not have reached the Rappal firm for sale.

The Court at page 423 indicates the care with which this rule should be applied in the following language:

“We only decide that under the circumstances of this case the bank could not in equity take these particular deposits from the Rappals in payment of their debt to it.

These facts distinguish the case from the case at bar, both upon the ground of the entire absence of any question as to plaintiff's ability to trace and identify his fund, and because of the palpable bad faith of the bank.

The defendant bank in the case at bar after its preliminary stop payment order on October 23rd, again continued its former relations with the Pfeiffer firm from the 26th to the 29th, the firm having promised to deliver collateral mortgage to the bank as general security, which on the 29th it refused to do. The bank showed its entire good faith and its purpose to assist the Pfeiffer firm by increasing the day note during this time, permitting the drawing of blue checks, accepting the yellou checks, paying the Luger & Covelt check of $1,063.00 over its counter, and in every detail maintaining the old relationship.

Respondent's statement at the bottom of page 94 and continuing on page 95 of his brief is not a fair picture of the situation and Counsel's honest desire to bring the case at bar within the statement of facts of the Gillespie case, has led him to very largely overstate his facts. A careful examination of the record will disclose the good faith of the defendant bank in its dealing with this account at this period.


Central National Bank vs. Conn, Mut. L.

Ins. Co., 104 U. S., 54.

The account in this case was opened “Dr. Central National Bank in account with A. H. Dillon, Jr., Gen. Agt., Cr.He also had a personal account with the bank and an account in his wife's name. At the time of opening the agent account, he acquainted the bank with the fact that it was to be used solely for the deposit of insurance premiums belonging to the plaintiff. A loan of $12,000 was made to him personally, at a subsequent date, the proceeds being placed in the wife's account, and many transactions of an intimate character between him and the officers of the bank were shown conclusively establishing the complete knowledge by the bank of every detail of its relationship with him. The note was renewed many times and then paid by being offset against the agent account.

There were no other claimants to the fund. The only question being because of the intermixture of the agent's commissions with the plaintiff's moneys. This obpection was brushed away by the Court, it holding that it would be assumed that where plaintiff was the only claimant, that the agent had withdrawn his own funds.; The Court found that the bank had full knowledge of all the facts and in view of the undoubted identity of the moneys, a recovery was granted.

It is respectfully submitted that these cases, while expressing the general rule—as to which there is no question—are clearly distinguishable from the case at bar, upon the question of the tracing and identification of the funds, the question of intermixture, the question of good faith, the question of the relationship of the bank to its customer taken together with its method of doing business, and upon the very vital fact that this acount was decreased to the balance of $800, because of debiting the dishonored paper, consisting of the two drafts of $8,700 and $9,200.

Attorneys for Defendant-Appellant,
Union Stock Yards Bank of Buffalo,

Office and P. O. Address,
909-910 D. S. Morgan Bldg.,

Buffalo, N. Y.


Of Counsel.

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