State ex rel. Sorensen v. Farmers State Bank

This is a proceeding to establish a claim against the insolvent Farmers State Bank of Newman Grove and to impress the assets thereof with a trust. The Federal *694Reserve Bank of Kansas City sent by mail direct to the State Bank for collection various checks drawn upon it. The two banks did not carry reciprocal accounts, but the State Bank, as the collecting bank, was bound to remit the proceeds. This the State Bank attempted to do by sending its draft on a correspondent bank, which was not paid because of the insolvency of the State Bank. The trial court held that the Federal Reserve Bank had a…