Marine Bank v. Fulton Bank - 69 U.S. 252 (1864)
U.S. Supreme Court
Marine Bank v. Fulton Bank, 69 U.S. 2 Wall. 252 252 (1864)
Marine Bank v. Fulton Bank
69 U.S. (2 Wall.) 252
1. Money collected by one bank for another, placed by the collecting bank with the bulk of its ordinary banking funds, and credited to the transmitting bank in account becomes the money of the former. Hence, any depreciation in the specific bank bills received by the collecting bank which may happen between the date of the collecting banks' receiving them and the other banks' drawing for the amount collected falls upon the former.
2. In a case where the trial has proceeded on merits and the error has not been pointed out below, judgment will not be reversed even though the form of action have been wholly misconceived and to the case made by it a defense plainly exists.
In the spring of 1861, the Fulton Bank of New York sent for collection to the Marine Bank, Chicago, two notes, one of Cooley & Co. for $2,000, and one of Hunt & Co. for $1,037, both due May 1-4 in that year. The currency at Chicago had become at that time somewhat deranged and consisted exclusively of bills of the Illinois banks. The Marine Bank, just afterwards, addressed a circular to its correspondents informing them that in the disturbed state of the currency it would be impossible to continue remittances with the usual regularity, and that until further notice it would be compelled to place all funds received in payment of collections to the credit of its correspondents in such currency as was received in Chicago -- bills of the Illinois Stock Banks -- to be drawn for only in like bills.
On the 1st May, the cashier of the Fulton Bank thus addressed the cashier of the Marine Bank:
"Please hold the avails of the collections I have sent you subject to my order and advise amount credited."
The two notes were collected by the Marine Bank in Illinois currency, at that time from five to ten percent below par. Immediately after the notes were collected, the Chicago bank, in reply to an inquiry from the Fulton Bank how the account stood, advised the latter bank thus:
May 1. You have credit as follows: Cooley & Co. . . . . . $2,000
May 6. Your account has credit as follows: Hunt & Co. . . 1,037
On the 21st April, 1862, that is to say, about a year after the collection made, the New York bank made a demand of payment from the Chicago bank, which was refused, unless the former bank would accept Illinois currency, now sunk fifty percent below par.
The Marine Bank was a bank engaged, like other banks, in receiving deposits, lending money, buying and selling exchange, and the money collected on the two notes in question was not retained in any separate or specific form.
On suit brought in the Northern Circuit for Illinois by the Fulton Bank, the court charged that the said bank was entitled to recover the value of the Illinois currency at the time the money was received by the defendant, and judgment went accordingly. The question in this Court was whether this was right, and whether the court below ought not to have charged, as it was requested but refused to do, that the Fulton Bank was
"only entitled to recover of the defendant the value, in coin, of such currency so received by the defendant at the time of demand made by plaintiff for payment with interest, and from that date,"
the only instruction asked for by the defendant's counsel.
A question was also raised in this Court as to the form of action below -- trespass on the case for having wrongfully received the depreciated paper; but this point had not been raised in the court below.