123 Ky. 485 | Ky. Ct. App. | 1906
Opinion by
Reversing.
Appellants sued the Odell Commission' Company, alias dictns the Odell Company, incorporated, to recover money het and lost hy them to those companies in a gamble upon the stock market. The statutes of
The answer, of appellee as garnishee Reclaims was true, because of the following facts: Appellee, a bank of deposit, had an account with the Odell Company, which it had been advised was an incorporated concern under the laws of Ohio and doing business at Cincinnati, by which there was deposited with the bank, to the credit of the Odell Company, from time to time, by the representatives or customers of that company at Paducah, various cash items. The sum of these it remitted daily, or nearly every day, to the
Some point is made in the pleadings, and some show attempted in the evidence, that appellee was also misled by the name used in the attachment — that of the Odell Commission Company. But the évidence leaves scant room for doubt that this idea is more of a makeshift. The Odell Commission Company had done business as a depositor on the same terms 'with appellee. It was immediately followed by the Odell Company, whose letters were signed by the same person as president, notifying the bank that the Odell Commission Company had quit business, and that the Odell Company would thereafter do the business as was done previously by the former company. They knew the same person, W. J. Odell, was manager of the new concern as he was of the old. The bank’s officers were aware of the character of this business; they personally knew the local representatives conducting’ it, and must have known whence came the large deposits with which they were favored. The case was tried out before a jury, who, under instructions hereafter to be noticed, found a verdict for the defendant bank.
The questions of law presented by this appeal are: (1) Whether a check drawn against a deposit in bank before an attachment or garnishment served upon the. bank, takes precedence of the attachment, although the oheclc may not be presented to the bank for payment till after the service of the attachment. (2) Whether a certified check places the deposit beyond garnishment process, although it may not have gone into the hands of another holder for value in the usual
It will be observed that the first two propositions submitted arise under the law merchant, and the latter two under the practice in this State concerning attachment proceedings. Whether a check drawn by a depositor against his credit on deposit with his banker is pro tanto an appropriation of the sum owing him by the bank may be treated, under the facts in this case, as settled in this State in the affirmative (Taylor’s Adm’r v. Taylor’s Assignee, 78 Ky. 470;. Winchester Bank v. Clark County Bank, 51 S. W. 315, 21 Ky. Law Rep. 311; Lester v. Given, 8 Bush, 361), although we note that such is not always held to be the common law, and such is not now, by statute enacted since this case was made up (section 189 of “An act relating to negotiable instruments,” approved March 24, 1904 (Acts 1904, p. 250), the law in Kentucky. But the doctrine stated was applied always in this State to cases where there was a contest between a holder of such check for value in due course, and one asserting a junior lien upon the fund. Where that was not the case, the court has indicated that the rule did not apply. Weiand’s Adm’r v. Bank, 112 Ky. 310, 23 Ky. L. R. 1517, 65 S. W. 617, 66 S. W. 26, 56 L. R. A. 178. So the two propositions are reduced to one, which is whether a check drawn against the deposit is an appropriation pro tanto as of its date when the check had not passed into the hands of a holder for value in due course. Checks are, by statute, as they were at common law, bills of exchange, and negotiable instruments. Section 478, Ky. St. 1903. Debts evidenced by such instruments are not subject to garnish
But the inquiry here necessarily goes to the point of determining whether the check was sold or discounted^ to another for value in due course. We do not deem the fact material whether the check was certified. Manifestly the certification of the depositor’s check did not alter the bank’s relation as his debtor, further than that notice was thereby given that the drawer intended to assign the fund and the bank’s assent to it so that any subsequent purchaser might take it with the bank’s assurance that it would be paid when presented. It might be said it was equivalent to an accepted bill of exchange where both drawer and accept- or had become bound to the holder. But so long as the check remained in the hands of the depositor there was no enhancement of the bank’s liability to him. It still owed him the same amount of money, which it would pay to him upon the presentation of that check. Not until the check had passed into the possession of a purchaser for value in due course would the bank’s liability to its depositor be changed or relieved. If, for example, the cheek had been stolen from the depositor and his endorsement forged upon it and then it had been sold to a stranger for value the bank would not have been released from its original liability to the depositor. So long as the property in the check continued in the depositor he had the right to collect the money on it from the bank, and, for that reason, his creditors had the right to attach if for a liability of his. The depositor could not by merely taking a certified check payable to himself, or his order, remove the fund from the effect of the at
The real transaction here amounted to this: The Odell Company had $6,000 in appellee bank at Paducah. Desiring, to have it brought to its depository in Cincinnati, it drew its check for $6,000 on the Paducah bank, payable to its Cincinnati banker, the latter thereby undertaking to collect it for its depositor and giving him credit in anticipation of its collection, but to be revoked if the collection miscarried. The Cincinnati bank parted with nothing. Its actual position was not changed. The fact that Odell Company might have checked against the credit in the Cincinnati bank, but did not, does not alter the case. It was not a sale of the check to the Cincinnati bank.
The circuit court held that funds deposited with the bank after the service of the attachment and before thé bank answered as garnishee were not covered by the attachment, and hence need not be disclosed by the garnishee. The method of attaching by garnishment is to serve a copy of the attachment upon the person holding the property of, or owing a debt to, as garnishee. If the property attached be stock in a corporation, the corporation may be summoned as garnishee. Section 203, Civ. Code Prac. In proceeding upon such attachment the garnishee may pay the debt owing to, or deliver the property held for, his
Appellants contend that the words “at or after” refer not alone to the shares of stock in a corporation, but to debts or other property in the hands of the garnishee to which the defendant may be entitled. The next section of the Code (225), which was enacted upon the Code revision in 1877, in lieu of section 246 of the old Code, says as to the disclosure to be made by the garnishee: “* * * And if it be discovered on such examination that, at the service of the order of attachment, upon him, he or the corporation was possessed of any property of the defandant, or was indebted to him, the court may order a delivery ■of such property, and the payment, or the security for the payment of such sum into court,” etc. As only the sum or property required to be disclosed by the garnishee is directed to be paid into court, to the officer executing the attachment, the process takes hold of that alone. We see then that, as to all property and debts held or owing by the garnishee, the statute fixed the time of disclosure, and thereby the measure of the lien created by the attachment at what was held or owing when the writ was served upon the garnishee. But as to stocks in corporations, it takes hold of all then owned in it by the defendant, nr thereafter up until the appearance and disclosure by the garnishee. In the old Code this same provision existed
The remaining question is whether the garnishee is affected by what appears of record in the suit out of which the attachment issued. If the record had disclosed that the Odell Company was the defendant sued and the writ served on appellee as - garnishee had shown that it was the property of the Odell Commission Company that was attached, this clerical error would have been perceived by an inspection of the record. But it sometimes happens that an attachment summoning garnishees is executed in a county far distant from the place where the action is pending. It seems to us if the mistake is one that is reasonably calculated to mislead, and does mislead,the garnishee, so that he fails to hold the fund or property in his possession belonging to the real defendant, he ought not to be held liable for a mistake not his own. "Whether he was so misled, and whether the fact was reasonably calculated to mislead him, are matters of fact referable to the jury. There may be instances in which he should also be held to look to the record. But in this ease the correction of the record was not made as to
But for the errors indicated the judgment is reversed, and cause remanded for proceedings consistent herewith.