Palo Alto Mutual Building & Loan Ass'n v. First National Bank

The suit is for the conversion of a check for seven thousand five hundred dollars and the proceeds thereof. The answer denies the conversion and sets up the special defense that plaintiff discounted and cashed the check at defendant’s bank, that the money was appropriated for the benefit of plaintiff, and that the demand in suit has been paid. Respondent is a building and loan association and appellant a national bank, both doing business in Palo Alto. Appellant was not the bank of deposit of respondent, the banking business of the latter being done at the Bank of Palo Alto. One Marshall Black was the secretary of respondent but held no other position therein. Appellant bank was located in the same block as respondent’s place of business, while the Bank of Palo Alto was three blocks distant. Plaintiff’s ownership of the cheek was admitted by the pleadings, said check being in the following form:

Black indorsed the check as follows: “Pay to the order of First National Bank Palo Alto Mut Bid & Loan By Marshall Black, Secretary,” and delivered it to appellant. At that time two deeds respectively from Annie MacIntyre and Alexander MacIntyre to Black, covering a tract of land in Palo…