Bank of United States v. Irving National Bank

Plaintiff made advances, secured by documents of title to merchandise, to the Peerless Corporation pursuant to a domestic letter of credit. It surrendered these documents upon a so-called trust receipt, informal in language (and undoubtedly ineffective as against a bona fide purchaser, but good inter partes), pledging to plaintiff the property “ and the proceeds thereof as security for the payment of any indebtedness.” The Peerless Corporation sold the property to South American purchasers and drew upon them for the price. It placed these drafts with defendant bank for collection on August 2,…