Alexander v. Birmingham Trust & Savings Co.

• Decision Date: 12 May 1921
• Docket Number: 6 Div. 86
• Citation: 89 So. 66,206 Ala. 50
• Court: Alabama Supreme Court
• Parties: ALEXANDER v. BIRMINGHAM TRUST & SAVINGS CO.

89 So. 66

206 Ala. 50

ALEXANDER v. BIRMINGHAM TRUST & SAVINGS CO.

6 Div. 86

Supreme Court of Alabama

May 12, 1921

Appeal from Circuit Court, Jefferson County; Romain Boyd, Judge.

Action by F.G. Alexander against the Fisher Flour Milling Company with garnishment in aid of suit to the Birmingham Trust &amp Savings Company. From a judgment discharging the garnishee the plaintiff appeals. Reversed and remanded.

Rudulph & Smith, of Birmingham, for appellant.

Shuford B. Smyer, of Birmingham, for appellee.

GARDNER J.

Appellant sued out an attachment against the Fisher Flouring Mills Company (hereinafter referred to as the Fisher Company), a nonresident corporation, and had the same executed by service of garnishment upon the Birmingham Trust & Savings Company and sought to subject to the satisfaction of his claim the proceeds of a certain draft drawn by said Fisher Company on Hopson & Sons, payable to the First National Bank of Seattle. The draft so drawn was for the purchase price of a car of flour sold by the Fisher Company to Hopson & Son, to be shipped to Macon, Ga., and was deposited by the former in said First National Bank, with bill of lading attached. The First National Bank forwarded the draft, with bill of lading attached, to the Birmingham Trust & Savings Company for collection. The bill of lading shows the flour was consigned by the Fisher Company to itself, with order "Notify Hopson & Son," and the draft was payable upon arrival of the car at Macon, Ga.

The first question presented for consideration is whether or not the defendant Fisher Flouring Mills Company, under the evidence in this case, could have maintained debt or indebitatus assumpsit against the Birmingham Trust & Savings Company for the funds here sought to be subjected. This is the test.

A detailed discussion of the evidence is deemed unnecessary, as a sufficient outline thereof will appear in the statement of the case. Suffice it to say it very clearly appears, and that--as we understand it--practically without dispute, that the draft in question was made payable to the First National Bank for the purpose of collection on account of the drawer. Indeed, there is no pretense that said bank became the purchaser of the draft. The Fisher Company was its customer, and while, upon presentation of the draft with bill of lading attached to said bank, credit was given to the Fisher Company for the amount thereof, yet this was made expressly conditional by the contract of the parties, as appears from the deposit slip set out in the report of the case. This deposit slip expressly stated that the bank assumes no responsibility on account of any of its collecting agents, it only being liable for the proceeds or actual funds of solvent credits which have come into its possession, and that under these conditions the items previously credited may be charged back to the depositor's account, and any checks of payment to be credited conditionally.

So far as the question here concerned is involved, we consider the case of Stones River National Bank v. Lerman Milling Co., 9 Ala.App. 322, 63 So. 776, reviewed and approved by this Court in Ex parte Stones River National Bk., 185 Ala. 673, 64 So. 1019, is decisive of this appeal. The holding in that case (9 Ala.App. 322, 63 So. 776), is well expressed in the second headnote as follows:

"Where the drawer of a draft indorsed it to the bank when depositing it for collection, and the bank credited the drawer with the amount on his deposit account, the bank did not thereby become the purchaser of the draft, since its liability was not absolute, but conditioned upon the collection of the draft; hence, the proceeds of the draft in the hands of another bank, to whom it was sent for collection, belonged to the drawer, for which he could maintain assumpsit, and as such was subject to garnishment by his creditor."

The opinion quotes from the case of Eufaula Grocery Co. v. Mo. Nat. Bk., 118 Ala. 408, 24 So. 389, and likewise distinguishes Tishomingo Savs. Inst. v. Johnson & Nesbitt, 146 Ala. 691, 40 So. 503, 119 Am.St.Rep. 34 ^[1]

In the Stones River National Bank Case, supra, the claimant bank occupied the position of the First National Bank in the instant case, and the draft had been forwarded to the Farmers' and Merchants' Bank for collection, as in this case it had been forwarded to the Birmingham Trust & Savings Bank. Likewise it appears that the deposit was conditional, as here, and it was held that such an assumption of a conditional liability did not render the claimant bank in fact a purchaser of the draft, though formally it might appear so. As pointed out in the opinion the case would have been different had the claimant bank actually purchased the draft, or had by agreement credited the amount of it on a debt owed the claimant by the defendants.

The deposit was conditional, with no pretense of purchase, and the mere fact that the drawer of the draft was at the time indebted to the First National Bank in an amount in excess thereof could have no material bearing upon the result in the absence of any agreement or understanding of any credit to be given on account thereof or any pretense on the part of the bank that such credit was to be given or expected. Indeed, the language used on the deposit slip clearly indicates to the contrary. The First National Bank therefore was but the agent of the Fisher Company in the collection of the draft. Stones River Nat. Bk. v. Lerman, supra; People's Bk. of Lewisburg v. Jefferson County Savs. Bk., 106 Ala. 524, 17 So. 728, 54 Am.St.Rep. 59; Eufaula Gro. Co. v. Mo. Nat. Bk., supra; Cosmos Cotton Co. v. First Nat. Bk., 171 Ala. 392, 54 So. 621, 32 L.R.A.(N.S.) 1173, Ann.Cas.1913B, 42; Cotton Mills v. Weil, 129 N.C. 452, 40 S.E. 218; Washington Brick Co. v. Traders' Nat. Bk., 46 Wash. 23, 89 P. 157, 123 Am.St.Rep. 912.

We have considered the case of ...