81 A. 294 | Md. | 1911
The American Motor Car Sales Company, a corporation not resident in the State of Maryland, kept a large and active account with the Capitol National Bank of Indianapolis and frequently deposited with that bank drafts drawn by the American Motor Car Sales Company upon different persons and corporations. It appears from the testimony of Mr. Kahler, the assistant cashier of the Capitol National Bank of Indianapolis, who was also the person in charge of the discounts of that bank, that bills of lading *181 calling for one or more automobiles were sometimes attached to these drafts so deposited, and sometimes there were no bills of lading attached, but that under the course of dealing between these parties, all drafts so deposited were entered as cash and passed to the credit of the American Motor Car Sales Company and became immediately subject to their check after it was credited upon their pass book. He also testified that there was no agreement between the bank and the Motor Car Sales Company in respect to these drafts. The Motor Car Sales Company of Indianapolis drew a draft to the order of the Capitol National Bank of Indianapolis on the Auto and Accessories Manufacturing Company, a corporation under the laws of Maryland, in the City of Baltimore, for the sum of $2,165.00, with a bill of lading attached calling for several automobiles. This draft with the bill of lading attached was deposited by the Motor Car Sales Company in the Capitol National Bank of Indianapolis by which the proceeds were credited as cash to the Motor Car Sales Company, both upon the books of the bank and upon the pass book of the Motor Car Sales Company, and the draft was by that bank sent to the Merchants' National Bank of Baltimore for payment, and it was paid on May 7th, 1909, by the Auto and Accessories Manufacturing Company. On the same day, May 7th, 1909, the Auto and Accessories Manufacturing Company issued out of the Superior Court of Baltimore City a non-resident attachment against the American Motor Car Sales Company upon an alleged indebtedness of $2,750, for commissions due on sales of nine automobiles, and for cash advanced, and the attachment was on the same day laid in the hands of the Merchants' National Bank of Baltimore, and it was summoned as garnishee. The garnishee appeared and pleaded nullabona, and upon replication and issue joined thereon, verdict was rendered for the garnishee under the instruction of the Court, and judgment entered thereon; and from that judgment the plaintiff in the attachment has appealed. The only evidence in the case as to the general course of *182 dealing between the Motor Car Sales Company and the Capitol National Bank of Indianapolis, and as to this particular transaction between them, is the testimony of Mr. Kahler, to which we have already referred for a general statement of the case, but we will now refer briefly more particularly to his testimony. When he was asked by plaintiff's counsel if he took the draft for collection, he replied: "No; we took it and credited it as cash." Being further asked, "But you took the draft for collection, did you not?" he replied, "No, sir." "Why didn't you?" "Because it was the same as a discount." "Why do you call it the same as a discount?" "Because it was subject to their check immediately after it was passed on to their pass book;" and under continued pressure from counsel for plaintiff, he continued to assert that it was not taken for collection for the drawer, but was placed to its credit as cash and forwarded for payment.
Mr. Barthel, the general bookkeeper of the National Bank of Baltimore was called as a witness for the plaintiff, and it was sought to prove by him some custom of national banks applicable to this case, and three exceptions were taken to the refusal of the Court to allow him to answer certain questions propounded for that purpose.
The first question asked was: "What is the custom of National Banks where they take drafts from customers that are in excellent standing with them, and carrying large balances, in cases where they take drafts on other concerns in other cities?"
The second question is: "Can you state whether, if a draft is put in bank by a depositor in good standing with the bank, it is carried to the credit of the depositor, as cash?"
The third question is: "Will you please state whether or not drafts that are put in, in the manner I have indicated even though they may be marked `for collection,' are carried as cash to the depositor's credit, if the depositor is in good standing with the bank?"
These rulings all involve the same principle and may be considered together. Before evidence of a custom or usage *183 can be received, it must appear that there exists a usage established long enough to have become generally known, and to warrant a presumption that the contract in question was made in reference to it; and that the usage is uniform in reference to the business and localities involved in the inquiry. In this case the witness was not asked whether there was any usage relating to the subject of inquiry, nor was his attention directed to the field to be covered by it, and it by no means follows that the same usage which may prevail in bank management in Baltimore, or in Eastern cities, obtains in Indianapolis or in the cities of the West, and the failure to show these preliminary conditions constitutes a substantial objection to these questions.
Moreover, proof of usage can not be received if it contradicts expressly, or by implication, the language or the substance of the contract. Jones on Evidence, 2nd Ed., page 585. "Usage may be admissible to explain what is doubtful; it is never admissible to contradict what is plain." Here the draft was drawn to theorder of the bank and was indorsed by it alone, for collectionfor it, and when this is considered in connection with the clear and uncontradicted testimony of Mr. Kahler as to the circumstances of the transaction, such a usage as the plaintiff sought to show, would contradict the conclusion naturally to be drawn from those circumstances and from his testimony. Balt.Base Ball Club v. Pickett,
Upon this question it was said in Tyson Rawls v. WesternNat. Bank,
In Morse on Banking, 4th Ed., 1903, Vol. 2, secs. 575 and 577, the general rule is thus stated: "A deposit being made by a depositor in a bank, in the ordinary course of business, of money, or drafts or checks received and credited as money, the title to the money, or drafts or checks is immediately vested in and becomes the property of the bank," sec. 575.
"When a bank receives from a customer a check on another bank for the special purpose of collection, the title does not pass by the special indorsement for that purpose, nor does the receiving bank owe the amount until the check is collected. But where the customer has a deposit account with the bankers with whom he is accustomed to deposit checks payable to himself, which are entered on his pass book, and to draw against such deposits, an indorsement of the words "for deposit" on a check so deposited, is, in the absence of a different understanding, presumption of more than a mere agency or authority to collect; it is a request and direction to deposit the sum to the credit of the customer and gives to the bankers authority not only to collect, but to use the check in such manner as, in their judgment and discretion, having reference to the condition and necessities of their business, may make it most available in their possession, and they may have it certified by the bank on which it is drawn," section 577.
Section 575 is supported by reference to the case of Nat.Citizens' Bank v. Howard, 3 Howard's Pr. Rep. N.S. 512, and section 577 by reference to Nat. Commercial Bank v. Miller,
In Titus Scudder v. Mech. Nat. Bank,
In Metropolitan Bank v. Lloyd,
In Cragie v. Hadley,
In St. Louis S.F. Ry. v. Johnston, 27 Fed. Rep. 245, JUDGE WALLACE relied upon 90 N.Y., supra, and said: "The intention of the parties in the particular transaction may be ascertained from the course of their previous dealings. When it appears that it has been the uniform practice between the parties in their past dealings to treat deposits of paper as deposits of cash, their intention to do so in the particular transaction should be inferred in the absence of new and inconsistent circumstances." It is true that this decree was reversed in
In Amer. Trust Bank v. The Gueder Mfg. Co.,
To the same effect are the cases of Cody Moore v. Bank ofGrand Rapids,
Zane in his work on Banks and Banking, pages 210 to 212, seems to take the position that banks in which checks *187 and drafts have been deposited for the credit of the depositor can only be regarded as owners of the paper, in favor of third persons who have acquired intervening rights, though he says there are cases which hold that if the deposit is credited as cash the title passes to the bank, and he adds: "The conflict of authority is not capable of being explained, but the true rule is that of Beal v. Somerville, 50 Fed. Rep. 647." That case will be referred to later.
Whatever conflict there may be, or want of harmony, in the decisions in other States or jurisdictions, a careful examination of the two Maryland cases, Tyson Rawls v. Western Nat.Bank,
In Tyson Rawls v. Western Nat. Bank, the checks which were the subject of controversy were sent to Nicholson Sons by Tyson Rawls, indorsed, "For collection for account of Tyson
Rawls, Greenville, North Carolina." Nicholson Sons credited these checks to them as cash and treated and used them as their own property, but Tyson and Rawls did not know and did not inquire how Nicholson Sons dealt with them. Nicholson Sons endorsed them for value to the Western Nat. Bank, which collected them and held the proceeds as its own. Nicholson Sons failed subsequent to such indorsement, and were, in fact, insolvent at that time, but this was not known to Tyson Rawls nor to the Western Bank. The Court said: "When a check, draft or promissory note is indorsed in blank, or to the order of the bank, and the proceeds credited to the depositor as cash, the bank becomes the owner of the paper by virtue of the indorsement. And, in case it is not paid at maturity it has the ordinary remedies which belong to the endorsee of instruments of this character which have been dishonored. * * * This indorsement was not adequate to pass to Nicholson *188 Sons the title to these papers. * * * The words `for collection' evidently had a meaning. That meaning was intended to limit the effect which would have been given to the indorsement without them, and warned the party that contrary to the purpose of a general or blank indorsement, this was not intended to transfer the ownership of the paper or its proceeds." One of the cases relied on by the appellant in the case at bar is Butchersand Drovers' Bank v. Hubbell,
Tyson Rawls v. Western Nat. Bank was argued before all the judges; JUDGE McSHERRY dissenting and the opinion was delivered by JUDGE BRYAN.
In Ditch v. Western Bank,
In that case JUDGE FOWLER delivered a vigorous and exhaustive dissenting opinion, in which CHIEF JUDGE ROBINSON and JUDGE ROBERTS concurred, and it was doubtless in view of this dissenting opinion that JUDGE BRYAN used the emphatic language just quoted. JUDGE FOWLER reviewed and analyzed the leading text writers, and a number of the decisions adverse to the view expressed by the majority opinion, but without avail to shake the deliberate convictions entertained by the majority. The question here presented, and there decided, upon such full deliberation, must be regarded as finally settled by that decision.
Judgment affirmed with costs to the appellee above and below. *190