8 F. 106 | U.S. Circuit Court for the District of Eastern Missouri | 1880
This case is submitted upon an agreed statement of facts, from which it appears:
(1) That on the sixteenth day oí December, 1878, the firm of C. F. Adae & Co., bankers, at Cincinnati, Ohio, being indebted to their correspondents, H. L. Newman & Co., at East St. Louis, Illinois, made and forwarded their certain bill of exchange, (or (¡heck,) of that date, on the German Savings Institution, a bank in St. Louis, for $1,072, to the order of said II. L. Newman & Co., the same being proceeds of a collection theretofore made by said Adae & Co. in the ordinary course of business between them and the said II. L. Newman & Co.
(2) The said bill of exchange; received by said Newman & Co. on the nineteenth day of December, 1878, and about noon of that day, was presented at the banking house of said German Savings Institution for payment, which was refused.
(3) On the eighteenth day of December, 1878, the said C. F. Adae & Co. became insolvent, and on that day, at Cincinnati, Ohio, made an assignment in writing of all their property to Augustus Dennett and Philip Henry Hartman, in trust, for the benefit of their creditors, which assignment and trust was on the samo day accepted by said assignees.
(4) Upon making said bill of exchange, December 16th aforesaid, said Adae & Co. charged themselves with the amount thereof in their general account with the German Savings Institution.
(5) On December 16th the amount on deposit with said German Savings Institution, to the credit of Adae & Co., was more than the sum of said bill of exchange; and on December 18th, at the time of said assignment to Bennett and Hartman, the balance on deposit, as owing from it to and the property of said Adae & Co. on said general account, was $4,037.25.
(6) Notice of the assignment to Bennett and Hartman was received by the German Savings Institution on the nineteenth day of December, before the presentation for payment of said bill, and by reason thereof payment was refused. The German Savings Institution, by bill of interpleader, asks the direction of this court as to the proper disposition of said fund. Bennett and Hartman, as assignees, claim the entire fund under the assignment from Adae & Co. to them. Newman & Co. claim a portion thereof under the bill of exchange executed to them by said Adae & Co. on the sixteenth of December for $1,072.
The controversy is thus seen to involve the question whether the execution and delivery of the bill of exchange for $1,072 was in equity, in view of the facts above recited, an assignment pro tanto of the fund in question. It has been frequently decided that the holder of a check drawn on a bank cannot sue the bank for refusing payment of it, in the absence of proof that it was accepted by the bank or charged against the drawer. Bank of Republic v. Millard, 10 Wall. 152; Marine Bank v. Fulton Bank, 2 Wall. 252; Thompson v. Riggs,
If, therefore, this were an action by a check-holder against the bank upon the check, there could be no recovery. But such is not the ease. This is a bill of'interpleader in equity, by which the plaintiff, a bank holding the fund in question, declares its readiness and willingness to pay as the court may order, and the controversy is as to the equities of the other parties .who are adversary claimants of the fund. The rule which prptects a bank from being harassed by suits brought by check-holders has no application to a case of this character. We are at liberty, therefore, to inquire, which of the claimants here has the better right in equity to the fund in question ? There are undoubtedly numerous respectable authorities which sustain the doctrine that the execution of a check in the ordinary form, not describing any particular fund, does not operate as an assignment, equitable or otherwise, of funds of the drawer in the hands of the drawee. Attorney General v. Insurance Co. 71 N. Y. 325, and cases there cited; Randolph v. Canby, 2 N. B. R. 296.
But, on the contrary, it was held by this court in Walker v. Siegel, 2 Cent. Law Jour. 508, that the rule thus broadly stated seems to apply only to eases at law, and that “such an order, as soon, as notice is given to the drawee, works an assignment in equity;” and this view is well sustained by authority. Roberts v. Austin, 26 Iowa, 315; Forgarties v. State Bank, 12 Rich. L. Rep. (S. C.) 518; Munn v. Burch, 25 Ill. 35, 1 Daniell, Neg. Inst. p. 20, § 23; Willard’s Equity Jur. (Potter’s Ed.) 464.
There is certainly no good ground for holding that a cheek or a draft, drawn upon a fund in bank, is not an equitable assignment as between the drawer and payee; and in a case where there is no controversy as to the rights of the bank or drawee, it does not lie in the mouth of the drawer, or his assignee, to say that such an instrument is not an equitable assignment. If it were conceded that, as a general rule, a cheek drawn upon a part of a fund in bank will not of itself operate as an assignment pro tanto, it is very clear to my mind that this is a case which a court of equity might well regard as an exception to any such general rule. As already suggested, the holder of the fund has come voluntarily into a court of equity, bringing the fund with him, and, disclaiming all interest in it, asks the court to dispose of it, as between the check-holder and the assignee, according to equity. It is a case, too, in which it appears that in equity the
An assignee for general creditors can assert no claim that was not good in the hands of his assignor. Roberts v. Austin, 26 Iowa, 315; Hagerty v. Pulmer, 6 John. 437; Walker v. Miller, 11 Ala. 1067; Clark v. Flint, 22 Pick. 231; Burrill on Assignments, 483, 484, and authorities cited.
If there had been no assignment, and this were a controversy between Adae & Co. and Newman & Co., it would, I apprehend, hardly be contended that the right of the latter to a decree for the money could be questioned. Such a decree would only give them their own, — the proceeds of their property, to-wit, certain choses in action left with their agent, Adae & Co., for collection, and by them collected. As the assignees can assert no claim as purchasers, and have no equities which did not belong to the assignors, I am clearly of the opinion that the defendants Newman & Go. are entitled-to a decree for the amount of the face of their bill of exchange, to-wit, §1,072. The balance of the fund, after payment of costs, should go to the assignees.
Decree accordingly.