Hoffman & Coppersmith v. Mechanics-American National BankHoffman & Coppersmith v. Mechanics-American National Bank
It follows that the judgment of the circuit court should be reversed and the cause remanded. The commissioner so recommends.
PER CURIAM:—The opinion of BRUERE, C., is adopted as the opinion of the court. The judgment of the circuit court of the city of St. Louis is accordingly reversed and the cause remanded. Allen P. J., and Becker, and Daues, JJ., concur.
1. GARNISHMENTS: Garnishees: Liability: Must be Privity of Interest Between Garnishee and Defendant. Liability of the garnishee to the plaintiff in the garnishment is no greater than it would be if the defendant was calling upon such garnishee to respond under the same state of facts, because the garnishee should not be put to the hazard of paying the same debt twice, and there must be some privity of interest between the garnishee and the defendant.
2. PRINCIPAL AND AGENT: Subagents: Employed with Consent of Principal: Privity. It is a general rule of law, as expressed in the maxim delegatus non potest delegare, that an agent has no power without the consent of his principal to delegate his authority to another, but this consent of the principal may be either expressly given or implied, and, when given in either manner, there is a privity between a principal and a subagent employed with his consent.
4. ——: ——: ——: ——: Correspondent Bank Agent of Drawers of Draft: Proceeds Subject to Garnishment. Where the drawers of a draft employed a local bank as their agent to transmit the claim to its correspondent bank (the garnishee here) for collection, and such bank in pursuance of such employment, sent the draft to the garnishee with instructions to collect the amount from the plaintiffs, thus qualifying the contractual relation between the local bank and the drawers of the draft, the local bank discharged its duty to the drawers of the draft when it transmitted the draft to its correspondent bank with instructions to collect; and notice of garnishment having been served upon the correspondent bank, garnishee, immediately after the money was paid and before transmission to the forwarding bank, the garnishee is deemed to have collected the draft as the agent of the drawers, and the claim arising from the collection was due to the drawers from the correspondent bank, and was subject to garnishment in its hands by creditors of the drawers.
5. ——: ——: ——: ——: Transmitting Bank Acquiring Ownership of Draft: Proceeds not Subject to Garnishment by Creditors of Drawer. If the forwarding bank had purchased the draft from the drawers before it was sent to its correspondent bank, garnishee, then the fund would not have been subject to garnishment in the hands of the garnishee.
6. GARNISHMENTS: Attachments: Garnishees: Judgments: Judgment Cannot be Entered Against Garnishee Before Judgment Against Principal Defendant. Before a judgment can be entered against the garnishee one must have been rendered against the principal defendant.
Appeal from the Circuit Court of the City of St. Louis.—Hon. Granville Hogan, Judge.
REVERSED AND REMANDED.
(1) The garnishee Mechanics-American National Bank of St. Louis was the agent of the Illinois National Bank of Springfield, Ills., payee in the draft; said garnishee was and is accountable only to the Illinois National Bank; there was no privity of contract or interest between the garnishee and Feuer & Spiegel, defendants in the attachment; said garnishee was not entrusted with any property or money by Feuer & Spiegel; garnishee owed Feuer & Spiegel nothing which could be enforced at law; attachment and garnishment are legal remedies only; the garnishee‘s instruction in the nature of a demurrer to the evidence at the close of the case should have been given. Atwood v. Hall, 17 Mo. App. 81; McCord v. Beetles (Disbrow), 58 Mo. App. 384, 386; Provenshere v. Reifuss, 62 Mo. App. 51; Hendrickson v. Trenton National Bank, 81 Mo. App. 335, 336; Peoples Savings Bank v. Hoppe, 132 Mo. App. 449; Wheeles v. Groc. Co., 140 Mo. App. 591; Brewing Co. v. Railroad, 145 Mo. App. 32; Typewriter Co. v. Cash Reg. Co., 156 Mo. App. 106; Lackland v. Garesche, 56 Mo. 267; Sheedy v. Second National Bank, 62 Mo. 17; State ex rel. v. Blair, 238 Mo. 154. (2) The demurrer to the evidence at the close of the plaintiff‘s case and all of the evidence should have been given; the circuit court was without jurisdiction to enter judgment in the cause against garnishee when it affirmatively appeared that judgment had not been entered in the attachment suit and that the garnishee was a national bank.
Care Dubinsky and Aug. Walz for respondents.
OPINION
NIPPER, C.—Plaintiffs instituted an attachment suit against defendants, in the circuit court of the city
The garnishee‘s reply was a general denial, without any special plea.
A trial of said cause resulted in a verdict and judgment for the plaintiffs, whereupon the court ordered that the garnishee, within twenty days, pay into the registry of the court the sum of $887.27, found to be due defendants, as aforesaid. After overruling motions for new trial, and the garnishee failing to pay the amount directed into the registry of the court, judgment was entered against the garnishee in favor of the plaintiffs for the sum of $887.27. The garnishee thereafter duly perfected its appeal to this court.
The plaintiffs are junk dealers in the city of St. Louis, and the defendants are engaged in the same busi-
“Customers Draft. May 31, 1919. 8835
Springfield, Ill., May 29, 1919.
At sight pay to the order of the Illinois National Bank $887 27-100 Eight Hundred eighty-seven and 27-100 dollars with exchange. Illinois National Bank.
No. 1017. Springfield, Ill.
To H. Hoffman & Co.
1-11 Biddle St. FEUER & SPIEGEL,
St. Louis. by J. SPIEGEL,
(Indorsed on back):
Pay to the order of any bank or banker. All prior endorsements guaranteed. May 29, 1919. Illinois National Bank, 70-32, Springfield, Ill., 70-32. Logan Coleman, cashier.”
The deposition of John W. Spiegel, of Feuer & Spiegel, was read in evidence, and, over the objections and exceptions of the garnishee, he testified that he and Morris Feuer were engaged in the junk business in Springfield, Illinois, and, that, when the shipment in question was made, he drew the draft on plaintiffs for $887.27, and signed the same “Feuer & Spiegel, by J. Spiegel.”
The deposition of George H. Riecks was also read in evidence on behalf of plaintiffs, wherein he stated, over
The garnishee offered no evidence. The case was given to the jury under certain instructions given for plaintiffs and defendants, to which we will hereafter refer.
The first question with which we are confronted is, whether or not the demurrer of the garnishee should have been sustained. The liability of the garnishee to the plaintiffs in the garnishment is no greater than it
The question then is, whether or not there was any privity of contract between the Mechanics-American National Bank of St. Louis, and the drawer of the draft, Feuer & Spiegel, of Springfield, Illinois. It is a general rule of law, as expressed in the maxim delegatus non potest delegare, that an agent has no power without the consent of his principal to delegate his authority to another. This consent of the principal, however, may be either expressly given, or implied, and, when given in either manner, there is a privity between a principal and a subagent employed with his consent. [Beach v. Moser, 4 Kan. App. 66.] There can be no serious question about the foregoing propositions being sound, but the serious question here is, whether or not, in the absence of an express consent by the principal, a bank, acting as agent to collect a draft payable in another State, has implied power or authority to appoint a subagent who shall be responsible to the principal. There are two well known and widely different rules recognized by the courts of this country. The one is known as the Massachusetts rule, the other as the New York rule.
The Massachusetts rule is that, where one employs a local bank to collect, in a distant place, negotiable commercial paper, and does not make a special contract in relation to the transaction, he impliedly authorizes the bank to transmit the paper for collection and returns to a reputable, suitable, and competent subagent or correspondent bank; and, if such local bank in the usual course of business uses due diligence and transmits the
The New York rule is the antithesis of the Massachusetts rule, and is that, the local bank is the agent of the principal, and has no authority, in the absence of a special contract, to employ subagents, and such subagents are responsible to the forwarding bank, and the forwarding bank is responsible for the subagent‘s conduct. This rule dates from and rests upon the case of Allen v. Merchants Bank, 22 Wend. N. Y. 215. This was a divided opinion, fourteen to ten. The minority opinion written by Nelson, Chief Justice (afterwards of the United States Supreme Court) undertook to adopt the same doctrine as the Massachusetts rule, but the majority opinion was otherwise.
In Missouri the Massachusetts rule has been adopted. [Daly v. Butchers’ & Drovers’ Bank of St. Louis, 56 Mo. 94.] In that case it is held that, where a forwarding bank, with which a bill or draft is placed or deposited for collection, uses due diligence, and transmits the paper to a proper and competent correspondent, at a proper place to facilitate its collection, with proper instructions therefor, its responsibility is at an end, unless by some after act it makes itself responsible. It may not be amiss to observe that this is not only the rule of law in this State, but the same rule of law has been adopted in the State of Illinois, where the draft was drawn. [Wilson v. Carlinville National Bank, 187 Ill. 222; Anderson v. Alton National Bank, 59 Ill. App. 587.]
In Vickers v. Machinery Warehouse & Sales Co., 111 Wash. 576, in an opinion by the Supreme Court of that State, en Banc, it is stated that, the custom of attaching bills of lading to drafts and passing the drafts along for collection has become so universal that the courts take judicial notice of the procedure. It is unnecessary for us to go that far in this opinion, because the procedure here is disclosed by the record.
The reply of the garnishee was a general denial. It did not undertake to set up any plea that the money belonged to a third party, and the Illinois National Bank at no time made any claim to the funds. The undisputed evidence in this record shows that, the money which plaintiffs paid to the Mechanics-American National Bank on the draft drawn upon them by Feuer & Spiegel, was not the money of the Illinois National Bank, the payee named in the draft, but belonged to and was the property of Feuer & Spiegel, against whom the plaintiffs had filed an attachment suit; and we think that the evidence discloses a state of facts and a course of dealing in this case such as would have authorized defend-
On behalf of the garnishee, five separate instructions were given submitting the question to the jury as to whether or not the garnishee collected the draft in evidence and remitted to the Illinois National Bank before it was informed or knew that the proceeds of said draft were claimed or belonged to the defendants, Feuer & Spiegel; and the jury by its verdict answered this question adversely to garnishee‘s contention.
However, it nowhere appears in this case that any judgment was ever entered against Feuer & Spiegel in the attachment suit. In Hauptman & Co. v. Whittle, 85 Mo. App. 188, l. c. 191, it is said:
“The law is settled by the statute and adjudications, as well as the statement of text writers, that before a judgment can be entered against a garnishee one must have been rendered against the principal defendant. [
R. S. 1889, sec. 5332 ; Miller v. Anderson, 19 Mo. App. 71; Drake on Attachment, sec. 460.] A judgment against the principal defendant is the foundation upon which that against the garnishee must rest; and one prosecuting a garnishment should show that he has a valid judgment against the defendant before having one entered against the garnishee. The burden was on him and not the garnishee.”
There is nothing said in Marx v. Hart, 166 Mo. 503, 66 S. W. 260, relied upon by plaintiffs, which announces any contrary rule. In the Marx case, supra, there was
PER CURIAM:—The foregoing opinion of NIPPER, C., is adopted as the opinion of the court. The judgment of the circuit court is accordingly reversed, and the cause remanded. Allen, P. J., Becker and Daues, JJ., concur.