Merchants' & Miners' Nat. Bank v. Barnes

• Decision Date: 08 June 1896
• Parties: MERCHANTS' & MINERS' NAT. BANK v. BARNES.
• Court: Montana Supreme Court

45 P. 218

18 Mont. 335

MERCHANTS' & MINERS' NAT. BANK v. BARNES.

Supreme Court of Montana

June 8, 1896

Appeal from district court, Deer Lodge county; Theo. Brantley Judge.

Action by the Merchants' & Miners' National Bank against Frank E. Barnes. From a judgment for defendant, and an order denying a motion for a new trial, plaintiff appeals. Affirmed.

Action for money had and received. The plaintiff bank alleges that the defendant and respondent, Barnes, received from the Granite Mountain Mining Company the sum of $226.18, to and for the use of the plaintiff bank. The case was tried to the court without a jury. The evidence showed the following facts: About January 31, 1894, one A. Tyler made a contract for hauling wood with the Granite Mountain Mining Company for which the company was to pay him (Tyler) on the completion of the contract. About March 15, 1894, the contract was completed. About the time the contract was executed, Tyler borrowed $300 from the plaintiff bank. To secure the payment of this sum, Tyler gave the following order on the mining company: "Philipsburg, Mont., Jan 31, 1894. To James H. Henley, Superintendent Granite Mountain Mining Co., Granite, Montana--Dear Sir: Please deliver to Merchants' and Miners' National Bank the check due me, March 15th, for hauling wood from Cleveland shaft to Bimetallic hoist. [Signed] A. Tyler." This order was immediately presented by the plaintiff bank to the mining company for acceptance, but it was not accepted at that time as there was no money yet due to Tyler; but it was agreed that, if Tyler would indorse his check to be given him in payment of the contract for hauling wood by the mining company on completion of this contract, the mining company would deliver the indorsed check to the bank. Afterwards, about March 1st, the amount due to Tyler was garnished in the hands of the mining company, in a suit brought by Merrell & Co. in a justice's court of Granite county; and on March 17th the sum of $226.18, the amount of money sued for by plaintiff in this action, was paid to the defendant, Barnes, the constable who served the papers on an execution from the justice's court in the aforesaid suit of Merrell & Co. against Tyler. Before the mining company paid the money to Barnes, the constable, the plaintiff bank demanded payment of the same, to wit, from the mining company, and also notified Barnes of its claim to said money. A subsequent demand was likewise made by plaintiff bank for the money, upon Barnes, after its receipt by him from the mining company. The money was applied by Barnes, the said constable, in satisfaction of the judgment against Tyler in favor of Merrell & Co. At the conclusion of plaintiff's testimony the defendant moved for a nonsuit, but the court concluded to hear the evidence of the defense, and reserved its decision on the motion. Subsequently judgment was rendered in favor of the defendant upon the questions of law involved. A motion for a new trial was made and overruled. The plaintiff appeals from the judgment and the order overruling the motion for a new trial.

H. R. Whitehill, for appellant.

Durfee & Brown, for respondent.

HUNT J. (after stating the facts).

An action of assumpsit, for money had and received, is a remedy equitable in its nature, existing in favor of one person against another, when that other person has received money either from plaintiff or a third person, under such circumstances that, in equity and good conscience, he ought not to retain the same, and which, ex æquo et bono, belongs to plaintiff. Buel v. Boughton, 2 Denio, 91; McFadden v. Wilson, 96 Ind. 253; Lockwood v. Kelsea, 41 N.H. 185; Laport v. Bacon, 48 Vt. 176. The old doctrine of the common law, that no action of contract can be maintained unless there is privity of contract between plaintiff and defendant, no longer generally prevails. Thus under the common law, as illustrated by the facts of this case, the mining company being indebted to Tyler, and Tyler having given an order to the bank for moneys due on such debt to this plaintiff bank, the bank could maintain no common-law action against the mining company to recover the amount, unless the mining company had assented to the appropriation, and promised, either expressly or by implication, to pay the money; and in such case the action would not be based upon any property or interest in the fund acquired by the bank through the order, but upon the mining company's promise to pay. But the equitable rule is different. By it an interest in the fund is recognized, and this interest arises through the order, which operates as an assignment, and generally permits such interest to be enforced by suit, even where the debtor upon whom the order had been drawn has not assented to the transfer. In this case, therefore, if the mining company, as a debtor of Tyler, held money which it was bound to pay to Tyler, and if Tyler agreed with the plaintiff bank that the money should be paid to the bank, and gave to the bank an order upon the mining company for the money, this order creates an equitable interest or property in the fund, in favor of the assignee, the plaintiff bank; and it was not necessary that the mining company should consent or promise to hold the money for, or pay it to, the plaintiff bank. This doctrine is applied in cases where the debt actually exists, or where it exists in future. As stated by Pomeroy (Pom. Eq. Jur. § 1283): "The equitable doctrine with respect to the assignment of property to be acquired in future is extended to this species of equitable transfer. The fund need not be actually in being. If it exists potentially,--that is, if it will, in due course of things, arise from a contract or arrangement already made or entered into when the order is given,--the order will operate as an equitable assignment of such fund as soon as it is acquired, and will create an interest in it which a court of equity will...