5 Mo. App. 342 | Mo. Ct. App. | 1878
delivered the opinion of the court.
This is a suit on a bill of exchange drawn by W. B. Sprinkle on defendants, and accepted by them, in favor of the Lewis County Savings-Bank, for $1,000, dated April 24,1876, payable at ninety days, and indorsed to the plaintiff. The answer denies that the bill was transferred to plaintiff for value before maturity, and sets up an affirmative defence, substantially as follows : That defendants, with the knowledge of the payee, accepted the bill only as sureties for the drawer, and under conditions expressly agreed upon between the acceptors and the payee, to the following effect, viz.: that, defendants having indorsed and delivered to the payee a certain warehouse-receipt for property worth $2,600, stored in the warehouse of the drawer, the payee would look first to said warehouse-receipt and property for payment of the bill; that the payee, nevertheless, in violation of said agreement, knowingly, without the knowledge or consent of defendants, permitted the drawer to “ remove, ship out, and dispose of the property covered by said warehouse-receipt,” whereby defendants were released from all liability upon said acceptance and suretyship; that defendants immediately notified the payee of their claim to be released, whereupon the payee, after the maturity of the bill, made a collusive and fraudulent transfer thereof to the plaintiff, which had full notice of its dishonor; that said transfer was made without valuable consideration, and for the mere purpose of depriving defendants of their rightful defence against an apparently innocent holder without notice. These allegations were put in issue by a reply.
At the trial, before a jury, the testimony tended to show that the payee in the bill sued on, the Lewis County Savings-Bank, located at Canton, Missouri, was a depositing customer of the plaintiff, a banking corporation in Quincy,
At the trial, the defendants offered to prove the failure of consideration between the original parties to the bill, as alleged in the answer, but the court refused to admit any testimony on that subject. The following instruction was given: —
“The jury are instructed that the plaintiff, under the evidence, is entitled to recover the amount of the draft sued on, together with interest from its maturity at six per cent per annum, and four per cent damages on the face of the draft.”
If the plaintiff’s ownership and right of action at the commencement of this suit related back to its acquisition of the bill before maturity, then, assuming the absence of any testimony showing fraud or collusion between the plaintiff and its indorser, in prejudice of defendants’ rights, the action of the Circuit Court was not erroneous. But if, the plaintiff’s original ownership of the bill having ceased, a new ownership was initiated after the bill’s dishonor; or if there was no new ownership, but only an agency for the indorser in the institution of the suit, then the. defendants were entitled to establish, if they could, the defence set up in their answer, and the court committed error in excluding it
In the case of Knecht v. United States Savings Institution, 2 Mo. App. 563, we had occasion to examine these relations, and found them, by all controlling authority, to be simply those of debtor and creditor. We held, therefore, that where a bank held a note against a depositor, at the time of his death, which was larger in amount than the sum on deposit, the bank might credit the amount of the deposit on the note, and obtain an allowance in the Probate Court for the balance due; and that such credit and allowance were -conclusive against an action by the administrator to recover the money on deposit. The law is well settled that, when payment upon an overdraft, a discount, an acceptance, or other species of advance or loan by the bank to a depositor, creates an indebtedness on his part, all the funds which the bank has to his credit may be applied upon such indebtedness, until it is fully discharged. In Commercial Bank v. Hughes, 17 Wend. 94, the rule was enforced against the 'drawer of a bill of exchange held by the bank. In Beckwith v. Union Bank, 4 Sandf. 604, it was not enforced against an indorser of a bill discounted by the bank, only because the bill had not yet matured. Many cases might be cited showing the application of the rule to every form of indebtedness from the depositor to the bank. Marsh v. Oneida Central Bank, 34 Barb. 298, and cases cited.
It appeared from the testimony in the present case that when the protested bill was returned to the plaintiff from St. Louis, the indorser, the Lewis County Savings-Bank, had on deposit with the plaintiff a sum larger than the amount due on the bill. The plaintiff at once exercised its right to appropriate from the deposit a sum sufficient to discharge the indebtedness of its depositor as indorser of a
All the judges concurring, the judgment is reversed and the cause remanded.