242 Mass. 265 | Mass. | 1922
The plaintiff seeks to establish a trust in the proceeds of a draft sent by it to the Hanover Trust Company for collection and remittance. The material facts in brief are these. It was a sight draft for $6,335.21, with bill of lading attached, drawn by the Elgin Motor Car Corporation on Sullivan and Sullivan Company, of Boston, at that time a depositor in and debtor of the Hanover Trust Company. The draft was payable to the order of the plaintiff, and was received by the Hanover company on August 5, 1920. On that date Sullivan and Sullivan Company drew a sight draft on the David P. Virr Company for $6,491.36; and at the farmer’s request, but without the authority or knowledge of the plaintiff, the bill of lading was detached from the draft forwarded by the plaintiff, and re-attached to the draft drawn on David P. Virr Company, which was then forwarded by the Hanover company to the Back Bay National Bank for collection. The draft of $6,491.36 was paid by the Back Bay National Bank by check which was received by the Hanover company on August 11, 1920, and was deposited with the general funds of its commercial department. Thereupon the Hanover company drew its treasurer’s check for $6,335.21, the amount of the original draft, mailed the same to the plaintiff, and credited the balance of the larger check ($156.15) to the account of Sullivan and Sullivan Company on its books. Thereafter, at 1:45 p.m. on said August 11, the commissioner of banks took possession of the Hanover Trust Company; and he refused payment of said check when it was
The established principles of law applicable here are stated in the case of Hecker-Jones-Jewell Milling Co. v. Cosmopolitan Trust Co. ante, 181, and need not be repeated. The Hanover company was the agent of the plaintiff, which forwarded the draft for collection, and title to the paper remained in the owner or forwarding bank. But when collection has been made, and the proceeds mingled generally with the funds of the collecting bank with the permission of the owner of the draft, unless a different intention is shown the money collected is not to be regarded as a trust fund; the legal relation between the transmitting and the collecting bank becomes that of creditor and debtor instead of principal and agent. As this court said in Freeman’s National Bank v. National Tube Works Co. 151 Mass. 413, 418: “One who collects commercial paper through the agency of banks must be held impliedly to contract that the business may be done according to their well known usages, so far as to permit the money collected to be mingled with funds of the collecting bank. Dorchester & Milton Bank v. New England Bank, 1 Cush. 177. When a payment is made to his agent and the money is put with the money of the collecting bank, he has a right to receive a corresponding sum, but he loses his right to the specific fund. In the absence of directions to the contrary, the collecting bank may pay it to the bank to which it should regularly be remitted by setting it off against a debt due from that bank and giving credit for it in the account.”
The facts relating to the payment of the draft in question are peculiar. The Hanover Trust Company detached from the plaintiff’s draft the bill of lading, and delivered it to or for the benefit of Sullivan and Sullivan Company, the drawee, attaching it to a sight draft of the latter on David P. Virr Company. This bill of lading, which represented the shipment of cars to Sullivan and Sullivan Company, should not have been delivered except on payment of the draft, as it transferred the right to the goods. The Hanover Trust Company, by doing this without authority,
The fact that the check of the Back Bay National Bank in payment of the draft drawn by Sullivan and Sullivan Company on David P. Virr Company was not put through clearing and paid until August 12, after the commissioner had taken possession of the Hanover Trust Company, cannot avail the plaintiff. See Manufacturers’ National Bank v. Continental Bank, 148 Mass. 553. This check was not given in payment of the plaintiff’s draft, which remained in the possession of the Hanover company and had been paid as above stated; hence the proceeds of this check were not impressed with a trust in favor of the petitioner. Whatever liability the Hanover Trust Company may have incurred by detaching the bill of lading from the plaintiff’s draft, the proceeds of the larger draft drawn by Sullivan and Sullivan Company on one of its debtors could not constitute a trust res for the plaintiff’s benefit. Haskell v. Avery, 181 Mass. 106, 107. Freeman’s National Bank v. National Tube Works Co. 151 Mass. 413, 419. Accordingly it is unnecessary to consider the traceability of these proceeds into a specific fund in the hands of the bank commissioner. Lowe v. Jones, 192 Mass. 94. It should be added that the right to prefer
A decree is to be entered that the plaintiff is a general creditor and entitled to receive such dividends on its claim of $6,335.21 as may be authorized to creditors of the commercial department of the Hanover Trust Company.
Decree accordingly.
