Farmers Exchange Bank v. Kraft Foods Company

Sixth Circuit

Farmers Exchange Bank v. Kraft Foods Company

235 F.2d 118, 1956 U.S. App. LEXIS 3831

CourtCourt of Appeals for the Sixth Circuit

DecidedJune 14, 1956

Docket12738

StatusPublished

Cited by2 cases

This text of 235 F.2d 118 (Farmers Exchange Bank v. Kraft Foods Company) is published on Counsel Stack Legal Research, covering Court of Appeals for the Sixth Circuit primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

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Farmers Exchange Bank v. Kraft Foods Company, 235 F.2d 118, 1956 U.S. App. LEXIS 3831 (6th Cir. 1956).

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[119]*119PER CURIAM.

Appellee filed an action charging appellant with conversion of appellee’s funds by accepting for deposit in appellant bank checks payable to appellee endorsed without authority.

Certain of appellee’s customers had delivered to C. E. Whitaker, a salesman of appellee, checks payable to appellee which were endorsed by Whitaker and deposited in Whitaker’s personal account at appellant bank.

It was stipulated that from July 2, 1952, through October 23, 1952, 28 checks totalling $3,216.17 were accepted by appellant bank bearing the following endorsement: “Pay to the order of any bank or trust company. For deposit only. Kraft Foods Company.” Twenty-five of the checks listed in the stipulation were introduced in evidence. Each one was payable to appellee. All of these checks were drawn by customers having accounts due and payable to appellee. At the trial these accounts were shown by appellee’s books to be still unpaid. It was also shown that Whitaker had made no remittances on these particular items except a partial payment on one check which is reflected in the amount stipulated.

Whitaker testified that he had made a written statement that he had been endorsing and depositing in his personal account checks payable to Kraft Foods Company but not remitted by him to appellee. While Whitaker claimed at the trial that he had remitted to appellee the proceeds of all the checks in question, the above evidence demonstrates that the District Court’s finding that appellee had sustained a loss in the aggregate amount of the checks is not clearly erroneous.

Under the law of Tennessee appellant bank acted at its peril in accepting checks upon Whitaker’s endorsement and receiving for deposit in Whitaker’s personal account checks payable to appellee. Jackson v. National Bank, 92 Tenn. 154, 159, 20 S.W. 802, 18 L.R.A. 663; Pickle v. Muse, 88 Tenn. 380, 384-385, 12 S.W. 919, 7 L.R.A. 93; Knoxville Water Company v. East Tennessee National Bank, 123 Tenn. 364, 373, 131 S.W. 447; Figuers v. Fly, 137 Tenn. 358, 375-376, 193 S.W. 117. Appellee’s endorsement “For deposit only” was restrictive. 9 C.J.S., Banks and Banking, § 222, p. 478.

Appellant failed to show that appellee received the proceeds of the checks in question. Cf. United States Guarantee Company v. Hamilton National Bank, 189 Tenn. 143, 148, 149, 223 S.W.2d 519, or to establish any estoppel against ap-pellee.

The judgment of the District Court is affirmed.

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[119]*119PER CURIAM.

Appellee filed an action charging appellant with conversion of appellee’s funds by accepting for deposit in appellant bank checks payable to appellee endorsed without authority.

Certain of appellee’s customers had delivered to C. E. Whitaker, a salesman of appellee, checks payable to appellee which were endorsed by Whitaker and deposited in Whitaker’s personal account at appellant bank.

It was stipulated that from July 2, 1952, through October 23, 1952, 28 checks totalling $3,216.17 were accepted by appellant bank bearing the following endorsement: “Pay to the order of any bank or trust company. For deposit only. Kraft Foods Company.” Twenty-five of the checks listed in the stipulation were introduced in evidence. Each one was payable to appellee. All of these checks were drawn by customers having accounts due and payable to appellee. At the trial these accounts were shown by appellee’s books to be still unpaid. It was also shown that Whitaker had made no remittances on these particular items except a partial payment on one check which is reflected in the amount stipulated.

Whitaker testified that he had made a written statement that he had been endorsing and depositing in his personal account checks payable to Kraft Foods Company but not remitted by him to appellee. While Whitaker claimed at the trial that he had remitted to appellee the proceeds of all the checks in question, the above evidence demonstrates that the District Court’s finding that appellee had sustained a loss in the aggregate amount of the checks is not clearly erroneous.

Under the law of Tennessee appellant bank acted at its peril in accepting checks upon Whitaker’s endorsement and receiving for deposit in Whitaker’s personal account checks payable to appellee. Jackson v. National Bank, 92 Tenn. 154, 159, 20 S.W. 802, 18 L.R.A. 663; Pickle v. Muse, 88 Tenn. 380, 384-385, 12 S.W. 919, 7 L.R.A. 93; Knoxville Water Company v. East Tennessee National Bank, 123 Tenn. 364, 373, 131 S.W. 447; Figuers v. Fly, 137 Tenn. 358, 375-376, 193 S.W. 117. Appellee’s endorsement “For deposit only” was restrictive. 9 C.J.S., Banks and Banking, § 222, p. 478.

Appellant failed to show that appellee received the proceeds of the checks in question. Cf. United States Guarantee Company v. Hamilton National Bank, 189 Tenn. 143, 148, 149, 223 S.W.2d 519, or to establish any estoppel against ap-pellee.

The judgment of the District Court is affirmed.

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235 F.2d 118, 1956 U.S. App. LEXIS 3831, Counsel Stack Legal Research, https://law.counselstack.com/opinion/farmers-exchange-bank-v-kraft-foods-company-ca6-1956.

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