Equitable Trust Co. v. Rochling - 275 U.S. 248 (1927)
U.S. Supreme Court
Equitable Trust Co. v. Rochling, 275 U.S. 248 (1927)
Equitable Trust Co. v. Rochling
Argued October 14, 17, 1927
Decided November 21, 1927
275 U.S. 248
1. Where a bank, before the filing of a petition in bankruptcy against it, received deposits of checks, the proceeds of which were later collected by its trustee in bankruptcy, the depositor is entitled to claim the proceeds of the deposit only if the bank received the checks as an agent for collection, but must stand as an ordinary creditor if ownership of the paper passed to the bank. P. 275 U. S. 252.
2. Respondents, who were bankers of Frankfort-on-Main, desired in the course of their international business, to arrange a credit at New York. Pursuant to instructions issued at their request by London connections, New York banks delivered to a New York banking firm (afterwards bankrupt) their cashier's checks drawn payable to the order of that firm "for account of" respondents. On the same day, the firm, in following a course of dealing previously established with respondents, credited the checks to respondents' account, made book entries indicating that respondents were entitled to interest on the amount from that date, and deposited them to its own credit in other banks. Before collection of the checks, the petition in bankruptcy was filed. Held, that the
word "for account of" were not necessarily to be taken a constituting the payee an agent for collection, but were to be construed in the light of the intention of the parties as revealed by all the circumstances, and in this instance their purpose was to advise the bankrupt of the account to which the checks were to be credited, and not make it an agent for collection, or restrict its rights as purchase. P. 275 U. S. 253.
10 F.2d 935 reversed.
Certiorari, 271 U.S. 653, to a judgment of the circuit court of appeals, which reversed an order of the district court dismissing a petition of the respondents for reclamation of the proceeds of checks collected by the above named trustee in bankruptcy.