National Bank of Commerce v. Merchants' National Bank,
91 U.S. 92 (1875)

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U.S. Supreme Court

National Bank of Commerce v. Merchants' National Bank, 91 U.S. 92 (1875)

National Bank of Commerce of Boston v.

Merchants' National Bank of Memphis

91 U.S. 92


1. A bill of lading of merchandise, deliverable to order, when attached to and forwarded with a time draft, sent without special instructions to an agent for collection, may be surrendered to the drawee on his acceptance of the draft. It is not the agent's duty to hold the bill after such acceptance.

2. The holder of a bill of lading who has become such by endorsement and by discounting the draft drawn against the consigned property, succeeds to the rights of the shipper. He has the same right to demand acceptance of the accompanying draft, and no more, and, if the shipper cannot require such acceptance without surrendering the bill of lading, neither can the holder.

This was a suit brought by the Merchants' National Bank of Memphis against the National Bank of Commerce of Boston for alleged negligence in surrendering three bills of lading attached to three drafts -- two at thirty days, and one on sight -- which were sent by the Metropolitan National Bank of New York to the defendant, who surrendered the bills of lading to the drawees upon their acceptance of the drafts. These were drawn against the cotton mentioned in the bills of lading. The defendant had no information that the drafts had been discounted by the Bank of Memphis, and no instructions either to surrender the bills upon acceptance or to hold them until payment of the drafts. The defendant had received through the same bank in New York drafts to a large amount on the same parties, accompanied by bills of lading, which they had always surrendered on acceptance, except in one instance, when special instructions were given to hold the latter until the accompanying draft was paid.

A verdict was rendered for the plaintiff.

Several questions were raised in the court below, but it is not deemed material to mention anything more than two portions of the charge of the court, which were as follows:

"In the absence of any consent of the owner of the bill of exchange other than such as may be implied from the mere fact of sending for collection a bill of exchange, the bank so receiving the two papers for collection would not be authorized to separate the

Page 91 U. S. 93

bill of lading from the bill of exchange, and surrender it before the bill of exchange was paid."

"If the Metropolitan Bank merely sent to the defendant bank the bill of exchange with the bills of lading attached 'for collection,' with no other instructions, either express or implied from the past relations of the parties, they would not be justified in surrendering on acceptance only."

To both of these instructions the defendant excepted.

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