Dakin v. Bayly - 290 U.S. 143 (1933)
U.S. Supreme Court
Dakin v. Bayly, 290 U.S. 143 (1933)
Dakin v. Bayly
Argued October 20, 1933
Decided November 20, 1933
290 U.S. 143
1. Where by state statute with reference to which a bank and its depositors presumably contracted, the bank is held only to the exercise of due diligence in forwarding checks for collection, and its liability is conditioned on receipt of final payment from the collecting bank, thus making the relation between bank and depositor (until final payment is received) one of agency merely, the depositors have a right of action against the collecting bank for any default in collection or remittance. P. 290 U. S. 146.
2. Upon the record in this case, held that a bank to which checks were forwarded by another for collection stood in the relation of agent to the depositors of the individual items in the forwarding bank, and was liable to them for failure to remit cash or its equivalent in satisfaction of the amounts collected. P. 290 U. S. 147.
3. A bank against which an action is brought to recover a debt owed by it individually to the plaintiff bank held not entitled to set off a demand which it asserts in an agency capacity. P. 290 U. S. 148.
4. Where, at the time of the insolvency of a collecting bank, which had sent drafts to a forwarding bank in settlement for items collected by it, the collecting bank remained liable as sub-agent
to the depositors of the collection items in the forwarding bank, held that the forwarding bank was not entitled to set off, in a suit against it on a debt owed by it individually, an asserted cause of action in its own right based on the drafts. Distinguishing Bank of the Metropolis v. New England Bank, 1 How. 234. Pp. 290 U. S. 149, 290 U. S. 152.
63 F.2d 592 reversed.
Certiorari, 289 U.S. 722, to review a judgment affirming a judgment of the district court allowing a setoff in an action by the receiver of a national bank.