U.S. Supreme Court
Sowell v. Federal Reserve Bank, 268 U.S. 449 (1925)
Sowell v. Federal Reserve Bank of Dallas, Texas
Argued May 1, 1925
Decided May 25, 1925
268 U.S. 449
1. An action brought on a promissory note by a federal reserve bank, a federal corporation, is an action "arising under the laws of the United States" within the meaning of Jud.Code § 24, "First" (a). P. 268 U. S. 453.
2. A federal reserve bank is not a national bank, subject to the provisions of Jud.Code § 24, "Sixteenth." Id.
3. The Assignee Clause, Jud.Code § 24, "First" (a), which forbids the district court to take cognizance of an action on a chose in action by an assignee which could not have been prosecuted in that court if no assignment had been made, applies where the sole ground of jurisdiction is diversity of citizenship, but not where the ground is that the action arises under the laws of the United States. Id.
4. Failure to present a promissory note for payment at the payee bank, where it was payable and where the maker had sufficient funds, or to give notice of dishonor, held not a defense to an action against the maker by the endorsee holder, in view of provision in the note waiving "protest, notice thereof, and diligence in collecting," and the Negotiable Instruments Law in Texas, giving effect to such provisions. P. 268 U. S. 456.
5. A note made to the order of a bank in which the maker had a deposit was endorsed by the payee to another bank as partial security for a larger indebtedness owed by the first bank to the second. The payee bank became insolvent, and the endorsee sued the maker on the note. Held that the maker was not entitled, merely in virtue of his equitable right of set-off as against the payee, to have the action stayed until the endorsee had exhausted other collateral held by it as security for the debt owed it by the payee -- at all events, not in the absence of the payee as a party. Id., .
294 F.7d 8 affirmed.
Error to a judgment of the circuit court of appeals affirming a judgment recovered in the district court by chanroblesvirtualawlibrary
the bank in an action against Sowell on his promissory note. chanroblesvirtualawlibrary