Court Opinion

ID: 3508649
Source: CourtListenerOpinion
Date Created: 2016-07-05 22:19:10.084322+00
Date Added: 2024-06-11T12:56:27.226553
License: Public Domain

I concur in the result. We did not in the Semingson case adopt the rule in the Malloy case, although we do so now. We apparently adopted the theory or principle in Streissguth v. Nat. G.A. Bank,43 Minn. 50, 44 N.W. 797, 7 L.R.A. 363, 19 Am. St. 213. This is a logical but harsh rule. The rule of law is now well settled but it is so impracticable that its enforcement is extremely perilous to the banking interest. It will require every bank in the state to enter into contractual relation with all customers and correspondents for whom it handles collection items authorizing it to accept drafts as payment.
The Slayton bank is responsible to plaintiff for anything done or omitted by the Pipestone, the Minneapolis and the Balaton banks in collecting the check.
The Balaton bank acted in a dual capacity. It had no authority to accept its own draft on the St. Paul bank in payment of the check. It is liable to plaintiff for the loss he suffered in consequence of its act outside the scope of its authority, and its liability attaches to the Slayton bank as the initial collecting agent. *Page 20 
The basis of liability is not negligence, but the unauthorized act of the Balaton bank which was the direct cause of plaintiff's loss. 2 C.J. 727; 1 Paton's Digest, § 1571. See City of Douglas v. Fed. Res. Bank of Dallas, 271 U.S. 489, 46 Sup. Ct. 554,70 L.ed. 1051.