Jersey Shore Trust Co. v. Owosso Sav. Bank

• Decision Date: 19 July 1923
• Docket Number: No. 78.,78.
• Citation: 194 N.W. 588,223 Mich. 513
• Parties: JERSEY SHORE TRUST CO. v. OWOSSO SAV. BANK.
• Court: Michigan Supreme Court

223 Mich. 513

194 N.W. 588

JERSEY SHORE TRUST CO.

v.OWOSSO SAV. BANK.

No. 78.

Supreme Court of Michigan.

July 19, 1923.

Error to Circuit Court, Shiawassee County; Joseph H. Collins, Judge.

Action by the Jersey Shore Trust Company against the Owosso Savings Bank. Judgment for defendant, and plaintiff brings error. Reversed and remanded.

Argued before WIEST, C. J., and FELLOWS, McDONALD, CLARK, BIRD, SHARPE, and STEERE, JJ.Matthews & Hicks, of Owosso, for appellant.

Pulver & Bush, of Owosso, for appellee.

STEERE, J.

Plaintiff is an incorporated banking institution located and doing a banking business at Jersey Shore, Pa. Defendant is an incorporated state bank located and doing a general banking business at Owosso, Mich. On May 13, 1918, the Owosso bank received by mail from the Jersey Shore Trust Company a draft for collection with bill of lading attached for $3,778.28, drawn on Launstien & Van Sice, of Owosso, Mich., by the International Consolidated Record Association of Elmira, N. Y., in favor of A. F. Wantz. It bore the following indorsement:

‘A. F. Wantz, pay to the order of any bank, banker or trust company. First indorsement guaranteed May 13, 1918. The Jersey Shore Trust Company, Jersey Shore, Pennsylvania-60-69. J. W. Lovegood, Cashier.’

On receipt of this draft the Owosso bank made an entry of it in its ‘collection register’ with customary descriptive notations, and notified the drawee, Launstien & Van Sice, accordingly. An entry in the Owosso bank's collection register shows this draft was ‘Paid May 22, 1918.’ On that date Van Sice responded to the notice for his firm, and presented to U. S. Cooper, assistant cashier of the Owosso bank, two checks upon it signed by himself and made payable to ‘International Consolidated Record Association or bearer.’ The checks were identical in all particulars, except that one was for $3,000 and the other for $778.28. Cooper wrote across the face of each in red ink, ‘May 22, 1918. Good. The Owosso Savings Bank, W. S. Cooper, Assistant Cashier,’ and surrendered to Van Sice the draft with bill of lading attached.

Neither of the Van Sice certified checks ever left Owosso. Cooper testified that the smaller one (for $778.28) was ‘paid that same day by draft issued to the Jersey Shore Trust Company,’ while the larger one (for $3,000) was taken from his custody by Joseph Sproule, the sheriff of Shiawassee county, and was eventually paid ‘by mailing a draft for $1,684.10 to the Jersey Shore Trust Company, and the balance was paid to the sheriff, Joseph Sproule.’ In further explanation he stated that on May 22, 1918, after he had handed the draft with bill of lading attached to Van Sice in exchange for his two checks, the sheriff levied a writ of attachment on the larger one for $3,000, and took it away from him; that on January 15, 1919, he paid this $3,000 certified check to the sheriff, who came back on July 23, 1919, and gave him $1,684.10, saying he had been instructed by the attorney to deliver that amount back to be forwarded to the Jersey Shore Trust Company, which Cooper then did. Asked if he received the Van Sice checks as cash when he exchanged the draft and bill of lading for them, he replied, ‘I would naturally consider the checks as cash, inasmuch as we had certified them and had the money.’

The attachment suit under which the sheriff took the $3,000 Van Sice check away from Cooper was commenced in the circuit court of Shiawassee county, Mich., by Launstien & Van Sice against the International Consolidated Record Association. This action was brought in October, 1918, by the Jersey Shore Trust Company to recover from the Owosso bank the unremitted balance of the draft sent it for collection the previous May. The case was tried before the court without a jury, and findings of fact with conclusions of law thereon were filed by the court, followed by a judgment in favor of defendant, entered February 20, 1920.

Counsel for plaintiff in their brief ‘submit as a statement of facts' the findings of the court. Exceptions were, however, taken and error assigned against its finding that, upon receipt of the $778.28, plaintiff credited it to the Record Association, and was holding it with other amounts aggregating $2,500 as protection in this matter, and also to facts found in the concluding paragraph of the findings. Aside from facts already stated as to transactions at Owosso, the facts found by the court are as follows:

‘The court finds from the evidence that on February 7, 1918, one Herbert A. Jones, who was the general manager, secretary and treasurer of the International Consolidated Record Association, Inc., of Elmira, N. Y., a corporation incorporated under the laws of the state of New York, secured from W. H. Launstien, of Owosso, Mich., an order of 1,100 bushels of seed corn to be delivered by his company to Launstien the following April at an agreed price of $4,328.28; that as an advance upon the purchase price of said corn Launstien and Van Sice, a partner of Mr. Launstien, paid to the record association the sum of $550.00, which was received and kept by such association. It further appears that the method of doing business of the said association in handling seed corn was to have the corn grown under contract, either verbally or written, with different farmers through the country, and that after inspection the corn was then transported to different mills to be prepared for the market; that under the Launstien order the corn was taken in by the Littletown Flour Mill & Elevator Company, at Littletown, Pa., to the amount of 800 or 900 bushels of said order, and that afterwards such corn, by request and instruction, or, as the testimony reads, ‘at the instance of’ the record association, such amount of corn was shipped by the milling company to Mr. A. F. Wentz, a miller of Pine Creek township, Pa., whose place of business is located near the corporation limits of Jersey Shore, who shelled the corn, cleaned it, bagged it, and reloaded it in the car, after having added to the quantity, from prepared corn that he had on hand of his own, sufficient to make up the 1,100 bushels of the Launstien order, and then, in accordance with the letter of advice of the record association, the corn was shipped to A. F. Wentz, who is described as the shipping and receiving agent of the record association, to the order of the record association at Owosso, Michigan. And it further appears that the milling company at Littletown was paid by Wentz about $2,500 for the corn shipped by it to him on this order. It further appears that a copy of the bill of lading was secured by Wentz for this corn, and with the letter of advice was returned to the record association, who thereupon drew a draft upon W. H. Launstien and Van Sice of Owosso, Mich., for $3,778.28, being the balance of the purchase price of said corn, after deducting the $550 already paid to the record association, and that such draft was payable to the order of A. F. Wentz, and that the draft was then forwarded to Mr. Wentz; that Mr. Wentz indorsed the draft and bill of lading and took them to the plaintiff, who accepted the draft and placed to the credit of Mr. Wentz $3,000 available by him for checking purposes, and that this advancement was in accordance with an understanding with Mr. Wentz and Mr. Herbert A. Jones of the record association, in regard to this and other drafts handled by this bank for the record association in the course of business, and that the bank was compensated by interest on amounts advanced if there was an overdraft. It appeared from the testimony that within 10 days from the time the draft was brought in to the plaintiff the record association had from 15 to 25 cars of corn shipped to it, and that they were on Mr. Wentz's siding; that the association had no money to lift these drafts for this corn, and plaintiff agreed to advance reasonable amounts to the association and the balance necessary, if any, was to be furnished by Mr. Wentz. And it further appears that at that time the plaintiff had a written guaranty of Mr. Wentz, such guaranty reciting that, the association being engaged in the business of shipping seed corn on draft and bill of lading, in consideration of any advancement made by plaintiff on account of these shipments before payment of draft, the repayment of such money advanced by Mr. Wentz was guaranteed to him; that under this guaranty the plaintiff is looking to Mr. Wentz to make good any loss it might sustain in this matter; the plaintiff forwarded this draft to the defendant for collection and return, and on May 22, 1918, the defendant sent the plaintiff $778.28 and a copy of the...