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FUND HELD NOT LIABLE WINS $25,000 CASE IN THE SUPREME COURT. Two Receivers Battled Over Question If Responsibility for Loss Rested With American of Omaha. The state guaranty fund won two cases, totaling claims for over $27,000 and interest, and lost one for $2,109, by reason of supreme court decisions rendered Friday. The judgments it won were for in excess of $25,000 claimed by the receiver of the Carroll Trust and Sav ings bank of Carroll, Iowa, and for $1,400 claimed by two children of Cashier Amos of the failed Citizens State bank of Kimball, upon which excess interest was paid. It lost for $2,109 in favor of the Nebraska National bank of Hastings. The Carroll bank claim was based upon an alleged deposit of $25,000 in the American State bank of Omaha, also in receiver's hands. The was an involved one. John Rolfsema, president and chief owner of the Iowa bank, had $25,000 of the Omaha bank and placed the proceeds there as deposit in the name of his bank. He afterwards paid off the note by drafts drawn upon Chicago, the proceeds. which went into his personal account. Subsequently, to reimbures his bank for this appropriation of the money, he gave deed to his farm. The court says this was full settlement by the bank and amounted to ratification of what he had done. says the transaction, so far as borrowing money on his individual note and putting the proceeds to the credit of the bank was concerned, coupled with repayment of the note, was equivalent to the bank borrowing the money and subsequently paying the debt. It points out that it was not until the bank got into receiver's hands was any claim made that the legal effect of the transaction was that of deposit still in the Omaha bank to the credit of the Carroll institution. This status does not exist and not liable. The Nebraska National bank of Hastings was correspondent for the Farmers State bank of Belvidere, which failed at time when it had an overdraft in the Hastings insti tution by reason of the payment by the latter of drafts drawn upon The court says that where bank with checking account in correspondent bank draws a draft on the latter and the drawee pays the draft in good faith in the regular course of business pursuant to custom between the two institutions, theerby creating an draft of the drawer bank, which is closed in the meantime by reason of and having reason believe that funds or eredits are in transit to fully cover the overdraft, may in equity be to the rights of the original holder of the exchange, and may participate to the extent of the overdraft in the bank guaranty fund.
