103 Kan. 654 | Kan. | 1918
The plaintiff sued the defendant bank for damages for negligence in failing properly to look after a collection, and failing to recover, he appeals, assigning various errors, but urging the one point, that the defendant’s explanation is not sufficient to excuse its negligence.
October 27, 1914, the plaintiff shipped from Stroud, Okla., to W. H. Leniton, at Lowe, Kan., a carload of cottonseed meal, the accepted order reciting:
“Price is made P. O. B. cars, Lowe, Kans. Prepay freight. Banking instructions. 1st Natl. Bk. Sedan, Kansas. Terms, sight draft with Bill of Lading attached.”
On the following day the company, .through the First National Bank of Sedan, Kan., drew on Leniton for the contract price, $491, the draft being in the following words:
Feeders Supply Co., No. 7156.
Kansas City, Mo., Oct. 28, T4
At sight pay to the order of Interstate National Bank, Four Hundred Ninety one no/ioo Dollars.
Bill lading attached for car 12460 S. F. C. -S. and to remain with draft until paid.
Value received and charge to account of To W. H. Leniton,
Sedan, Kan. Collect through First National Bank.
Feeders Supply Co.,
By C. S. Nathan, Cashier.
The Interstate National Bank of Kansas City forwarded the draft with a letter containing the following:
“Hold no item, unless we so instruct; but protest and return at once all not promptly honored. Deliver ddcuments only on payments of drafts attached.”
The draft was held by the defendant bank, without présentation or demand for payment, until December 14, 1914, when it was returned to the forwarding bank with the following indorsement :
“Our information is that this shipment has been received by Leniton. Car been fed to his cattle. Mr. Leniton died two weeks ago. First Nat’l Bank.”
The answer pleaded, among other things, that Leniton lived twelve miles from Sedan, his post-office address being Wau
It was further alleged that the shipment was made in such manner that the consignee could and did take the cottonseed meal as soon as it arrived at its destination, regardless of the acceptance or the payment of the draft; that it arrived at Lowe on the 3lst of October and was received and unloaded by Leniton prior to the day on which the defendant should have presented the draft; and that defendant could not have presented the draft' in the regular course of business and made reply in time for the plaintiff to prevent the consignee from taking the meal and using it.
Although the. meal was consigned to the seller, and not to the buyer, it appears that, by some person not disclosed and in some manner not explained, the meal was unloaded and fed' to the consignee’s cattle. The railroad agent did not even know whether the meal was left long enough for a demurrage charge to arise, but' he testified that if the car had stood there any length of time there should have been a demurrage charge, and from his testimony it appears that the car was set out October 31.
One peculiar feature of the case is that no bill of lading was attached to the draft, and if one was ever issued, it does not appear what became of it. There was attached a document, referred to often in the testimony as a bill of lading, which on its face appears to be a memorandum “for use in connection with the standard form of straight bill of lading,” approved^ by the interstate commerce commission, and it is an acknowl
It is argued that the defendant was not negligent, and even if it were, such negligence did not cause any damage to the plaintiff. It is contended that, as the plaintiff and the bank undertook to send a sight draft against the shipment protected' by the usual bill of lading, and so instructed the defendant in the draft itself, and sent along a. piece of paper purporting to-be the bill of lading,- it was not negligence to assume without careful investigation that it was such and that it would have to be obtained by Leniton or by any one in order to get possession of - a shipment, “and the defendant had the further right to assume that being protected in this manner there was.no special hurry required on its part in the matter of presenting the draft for collection or in reporting to the sender.” Theré was evidence that other shipments were not remitted for until the lapse of some forty days, or that the delay in this instance was only reasonable. It is further urged that the direct cause of the plaintiff’s damage was the fact that the shipment was made on such terms and under such instructions that Leniton could and did unload the' meal without first accounting to any one for the purchase price; in other'words, that the plaintiff did not attach the original bill of lading’ as it represented to the defendant that it had done, and thaf this failure was con-
It was admitted that from the 80th day of October until the 14th day of December, 1914, the defendant bank held a chattel mortgage on six he'ad of native cows and other property described in a mortgage from Leniton to the bank. The plaintiff offered to show that the meal was fed to this stock, but the offer was refused.
Whatever the effect of attaching to the draft another instrument than the original bill of lading, the bank could not help understanding that the draft was sent to it for collection; that the feed had been shipped; and that the collection would be due on its delivery, which would naturally be prompt upon its arrival. It certainly owed the plaintiff the duty of using reasonable diligence to carry out the agency it had been called upon to exercise, and it is difficult to see on what theory the practical inaction during all those weeks, until some time after the death of Leniton, can be justified.
“The collecting bank must act in- good faith, exercise reasonable skill in performing its duties, and use due care and diligence in making prompt presentment, demand, and protest, in giving notice of dishonor and in taking whatever steps are necessary to protect the customers’ rights or it will be liable for loss. It must forward the check for presentment by a direct route and not indirectly by circulation through branch banks or otherwise.” (7 C. J., 610.)
“When commercial paper is delivered to a banker for collection, the banker becomes the customer’s agent to make collection, and he undertakes the duty of an agent for all purposes of making the collection. As in case of other collecting agents, the bank is required to use ordinary or reasonable diligence and care in making the collection; and if from its failure to do so, loss results to its customer it is liable to him in damages therefor.” (3-R. C. L. 610.)
It is claimed that, even if negligent, the defendant bank did not cause the plaintiff any loss which it would not otherwise have incurred. It appears, however, that Leniton was a man
The undisputed facts render the defendant liable as a matter of law, and the judgment is reversed with directions to grant a new trial for the one purpose of ascertaining the extent of such liability.