In Re Liquidation of Canal Bank & Trust Co.

In the briefs which have been filed in support of the application for a rehearing, our attention is directed to the decision rendered in Joffrion-Woods, Inc., v. St. James Bank Trust Co., 171 La. 172, 129 So. 808, 809. It is said that the court decided in that case that, when a customer placed in his local bank an out-of-town check or draft, for deposit, and received credit for the amount of the item, his ownership of the check or draft did not pass to the bank but remained in him until the local bank received payment. The only question in that case was whether the local bank was liable to the depositor for the amount of the check, or was warranted in charging back to the depositor the amount of the check, when the amount was not collected by the local bank, because of the failure of the bank on which it was drawn. It was held that the local bank was not liable for the loss, and had the right to charge back to the depositor the amount of the check, because of the provisions of Act No. 85 of 1916, p. 204, and of Act No. 86 of 1926, p. 125; and that the so-called "weight of authority" in other jurisdictions, on the question whether title to the instrument had passed to the local bank, was a matter of no importance whatever. We said that the statutes on the subject did not make a distinction between a case *Page 884 where the local bank received the check or draft for collection and a case where the bank received the item for deposit, and that, inasmuch as the nonliability of the bank — or right of the bank to charge the item back to the depositor if not collected — was determined by statute, the opinions of the law-writers and judges on the abstract question as to whether title to the check or draft had passed to the bank was a matter of no practical importance. Here is how we expressed the idea:

"Counsel for Joffrion-Woods, Inc., contend that a distinction should be made between a case where the forwarding bank received the instrument for collection and a case where the forwarding bank, as in this case, received the instrument for deposit and gave the depositor credit for the amount. Our answer is that neither of the statutes [Act No. 85 of 1916 or Act No. 86 of 1926] makes any such distinction. They relieve the forwarding bank from liability as well when the instrument has been received for deposit as when it has been received for collection. The statutes recognize and virtually declare that, when a bank receives from one of its depositors an item for collection or deposit, the bank may immediately give the depositor credit for the amount without becoming irrevocably the owner of the instrument or forfeiting the right to charge the amount back to the depositor if the bank fails to make the collection."

We used the expression "without becoming irrevocably the owner of the instrument" as being synonymous with the expression "without forfeiting the right to charge the amount back to the depositor if the bank fails to make *Page 885 the collection." There is nothing in either of those expressions inconsistent with the decision which we have rendered in the present case.

The application for a rehearing is refused.