106 Ala. 524 | Ala. | 1894
— The appellant bank sued the defendant in assumpsit for money had and received. The evidence is without conflict, and we will state the facts, substantially, which gave rise to the demand. On the 17th day of March,. 1893, R A. Wilkes drew a check as follows :
“$750.00. Birmingham, Ala., March 17th, 1893.
“At sight pay to the order of Beatty & Orr seven hundred and fifty dollars, value received, and charge to the account of R. A. Wilkes.”
“To Tennessee Packing Co., Birmingham, Ala.” Written across the face of the draft was “Accepted, payable at Jefferson County Savings Bank, Birmingham, Ala. Tennessee Pa’g. Co., by R. A. Wilkes.”
It was indorsed as follows, with erasures :
“Beatty & Orr
“No. 519
“ Pay to the order of F. Porterfield Cas. for collection only for account Peoples’ Bank of Lewisburg, Tenn.
“R. A. McCord, Cash.’'’
This indorsement as erased was followed by the following indorsement: “Pay Commercial Nat’l Bank. Nashville, Tenn., or order for account of People’s Bank, Lewisburg, Tenn. “R. A. McCord, Cash.’-’
“No. 17925.
“Pay to the order of Jeff. Co. Sav. Bk. for collection only for acct.
“Commercial Nat’l Bank, Nashville, Tenn.
“F. Porterfield, Cash.”
The draft was paid to the Jefferson County Savings Bank on March 25th, 1893, and by that bank placed to the credit of the Commercial National Bank, and notice of the collection and credit mailed to the Commercial-National Bank within banking hours on the same day. On the
The question is, whether the money when collected belonged to the plaintiff bank, of which fact the collecting bank had notice, or was it the money of the Commercial Bank, and under the written authority contained in its letter or the usage of the banks, did the collecting bank have authority to credit the amount collected in payment of the indebtedness due it from the Commercial Bank? The cashier of the plaintiff bank testified that plaintiff had an arrangement with the Commercial Bank with regard to drafts sent to it by plaintiff, to the effect that when the drafts were collected and amounts reported and placed to credit of plaintiff, the latter would draw for the amount, but not before it was reported collected, and that no report of the collection of the draft was ever made by the Commercial Bank ; nor the amount placed to the plaintiff’s credit; that plaintiff bank never drew against the amount of the draft; that at no time was plaintiff bank indebted to the Commercial Bank ; that it had been forwarded simply for collection and so entered on their books; and that plaintiff was the owner of the draft, and never parted with its title. Unless plaintiff’s rights were lost or waived by virtue of the indorsements, or its agreement with the Commercial Bank, expressly or impliedly, the plaintiff, in our opinion, was entitled to recover. We attach no. importance to the cancelled indorsement. The indorsement and cancellation were made by plaintiff before tint transmission of the draft for collection. The unerased indorsements determined the legal relations of the parties. The indorsement by plaintiff, “Pay Commercial National Bank or order for account of People’s Bank of Lewisburg,” according to all the authorities, gave notice
It is contended for appellee, that under the agreement and course of dealing between the plaintiff and its agent, the Commercial Bank of Nashville, as soon as the. money was collected by the latter the relation of debtor and creditor arose and the ' ownership of the money vested in the Commercial Bank, and the collection of the money by the defendant and crediting it upon the indebtedness of the agent bank, was, in law, the transmission of the money to the ageht bank, as much so as
In the case of White v. National Bank, 102 U. S. 658, the indorsement was “Pay S. V. White or order for account of,” <fec. The court declared that the “Indorsement is without ambiguity, and needs no explanation, either by parol or resort to usage. The plain meaning of it is, that the acceptor of the draft is to pay it to the indorsee for the use of the indorser. The indorsee is to. receive it on account of the indorser. It does not purport to transfer the title of the paper, or the ownership of the money when received. Both these remain, by the reasonable and almost necessary meaning of the language, in the indorser.”
In the case of the National Bank v. Hubbell, 117 N. Y. 384, 396, the same distinction and rule is declared as held in 148 U. S., supra. The court says: “The firm, by the arrangement', had the right to retain the moneys and to remit weekly, and of course, from one week to another, it had the right to use the money, and the plaintiff relied upon the credit of the firm for such time as it had the right to retain the money.”
In the case of the Machanics Bank v. The Valley Packing Co., 70 Mo. 643, the endorsement was, “Pay to D. or order for collection for account of C.” The court held, ‘ ‘that the restrictive indorsement destroyed the
We are of opinion the distinction is clear and the rule sound. Without it, ownership of the draft and .money' would be divested against the express contract of the indorsement, and without fault. The case of the City Bank of Sherman v. Weiss, 67 Texas 331, lays down the broad rule, that where a bank or person collects money upon a draft sent to it by the bank to whom it was indorsed for collection by the owner, with a restricted indorsement, the agent collecting the money holds it in trust for the owner, and has no authority to apply it to the payment of any indebtedness due from the forwarding bank, and that without reference to the question of notice of its insolvency. The agreement between the plaintiff in the case at bar and the Commercial Bank did not authorize the latter to use the plaintiff’s money at any time in its business. As soon as collected, it was the duty of the Commercial Bank to notify the plaintiff of the collection and then plaintiff would draw it out. According to the facts of the case, the collection was never credited 1 o plaintiff, and the Commercial Bank ceased to do business, and its agency terminated by insolvency before its contract with plaintiff was completed. We are of opinion under the facts of this case the plaintiff was entitled to recover, and judgment will be here rendered to that effect.
Reversed and rendered.