Bank of Commerce v. Bogy

• Decision Date: 31 March 1869
• Citation: 44 Mo. 13
• Parties: THE BANK OF COMMERCE, Appellant, v. LOUIS V. BOGY, Respondent.
• Court: Missouri Supreme Court

44 Mo. 13

THE BANK OF COMMERCE, Appellant,

v.LOUIS V. BOGY, Respondent.

Supreme Court of Missouri.

March Term, 1869.

Appeal from St. Louis Circuit Court.

The facts material to the case are set forth in the opinion of the court.

Garesche & Mead, for appellant.

I. The draft operated as an equitable assignment of the fund, because it was drawn against a particular fund, viz: assessments on capital stock. It directed payment of the fund to be made to plaintiff, and the payment was not dependent on any contingency. There was no reservation, on the part of the drawee, of any power or authority over the fund. It was drawn for all of the fund. In cases where an order is drawn for the whole of a particular fund, it amounts to an equitable assignment of that fund, and, after notice to the drawee, it binds the fund in his hands. (Mandeville v. Welch, 5 Wheat. 289; Blinn v. Pierce, 20 Wend. 29; Walker v. Mauro, 18 Mo. 569; Dana v. San Francisco, 19 Cal. 490; Wheatly v. Strobe, 19 Cal. 92; Edwards v. Daley, 14 La. An. 384.) The distinction between those cases in which the transaction constitutes such an assignment and those in which it does not seems to depend upon the question whether the party having the control of the fund intended in fact to make an absolute appropriation of it, or whether he intended to retain the control of it. Where a debtor gives to his creditor an order upon one indebted to him, such order will be construed as an equitable assignment of the debt, even though the debtor on whom it is drawn had never assented thereto. (Dickenson v. Phillips, 1 Barb. 460; Ford v. Angelrodt, 37 Mo. 57; Rodick v. Gandell, 15 Eng. L. and Eq. 30.)

II. The petition alleges and the demurrer confesses that defendant promised to accept. This brings the case within Gray v. Trafton, 12 La. An. 702.

III. If the bill of exchange was simply as a letter of attorney from the Express Company to collect its dues, even then it was a power coupled with an interest; therefore irrevocable, and operates as an equitable assignment. (Houghtaling, Adm'r, v. Marvin, 7 Barb. 412.)Ewing & Holliday, for respondent.

I. A bill of exchange not accepted does not operate as an assignment to the holder of the unaccepted bill of the indebtedness of the drawee to the drawer. (Kimball v. Donald, 20 Mo. 577; Ford v. Angelrodt, 37 Mo. 50; 1 Sandf. 416; 3 Sandf. 257; 3 Comst. 243; 1 Curtis, 133; 5 Hill, 413-417; 7 Hill, 577, 2 Am. Lead. Cas., ed. 1852, p. 141; 1 Seld. 525; 2 Seld. 412; 15 La. 255; 3 Kent's Com. 76; Sto. on Bills, §§ 46, 47)

II. There is no allegation in the petition in this cause that any other contract was made than the law raises from the position in which the names of the parties appear to the bill. As to what this contract is, see 1 Pars. on Notes and Bills, p. 54, § 54.

III. There is no allegation that this draft was drawn on any particular fund. An order drawn on any particular fund has, after acceptance or promise of payment, been allowed to operate as an equitable assignment of the fund. But there was no particular fund in this case. The Express Company had no money in the hands of defendant Bogy. He may have been indebted to the Company for his subscription, but that is quite a different thing from having certain funds in his hands belonging to the drawer.

BLISS, Judge, delivered the opinion of the court.

The petition alleges that the plaintiff is a corporation organized under the laws of Maryland; the National Express and Transportation Company is a corporation of Virginia, to whose stock of $100 a share the defendant subscribed for fifty shares, “and then and thereby obligated himself to pay said Express Company the sum of $100 per share, or $5,000 in all, at such times and in such sums as should be required and ordered by the legally constituted officers of the said Express Company, and to this end to accept of such drafts as should from time to time be drawn by said Express Company on defendant for the calls of stock which should be made, and until the sum of $100 per share has been paid.” The petition further alleges that the officers of the company, on the 26th of April, ordered that the shareholders, including defendant, should, on or before the 10th of May, 1866, pay five per cent. on each share; and on the 8th of August, 1866, made a further call of five per cent., payable the 25th, making in all $500. On the 10th of August, 1866, the Express Company drew a bill upon defendant, at ten days' sight, for his indebtedness, and for a good consideration negotiated it to the plaintiff, “whereby plaintiff became subrogated in all the rights of the said Express Company, as the assignee of the said Express Company, of the indebtedness due to it” by the defendant. The petition alleges presentation of the draft, but acceptance was refused.

Defendant demurs to the petition: first, because of the joinder of different causes of action; and second, because the facts stated do not constitute a cause of action; alleging a want of allegation of facts sufficient to charge the defendant upon the bill, etc.

There is but one cause of action set out in the petition. The other allegations are intended only as averments necessary to establish a liability upon the bill. But the pleader has evidently drawn his petition upon the hypothesis that a bill upon a debtor for the exact amount of the debt is, ipso facto, by operation of law and without regard to the intention of the parties, an assignment of the debt to the person in whose favor the bill is drawn. The petition alleges the indebtedness by virtue of the subscription to the stock of the Express Company; the promise to accept drafts for the assessments as they should be made; the drawing and negotiation of the bill to the plaintiff for a good consideration, “whereby plaintiff became subrogated in all the rights of said Express Company, as the assignee,” etc., “of the indebtedness due to it;” etc. There is no averment of any assignment to the plaintiff of defendant's indebtedness; no question of fact of intention in that regard is raised, but the legal effect of the bill is relied on. Neither does the pleader rely upon the previous general promise to accept such draft as should be drawn on him to cover the assessment; for that promise, even if it would be obligatory, is not alleged as made in fact, but is only charged as a legal inference from the subscription. “Plaintiff further avers that defendant subscribed to the capital stock,” etc., “and then and thereby obligated himself,” etc., “and to this end to accept,” etc.; i. e., the legal effect of his subscription was an obligation to pay for the shares and to accept drafts for the calls of stock, and no express promise to accept the bill is alleged.

The pleader is mistaken in his view of the law. A bill drawn upon a debtor does not of itself operate as an assignment in equity of the debt, even if it is negotiated for a...