Pennsylvania Co. for Insurance on Lives and Granting Annuities v. Philadelphia Electric Co.

• Decision Date: 17 June 1938
• Docket Number: 171
• Citation: 331 Pa. 125,200 A. 18
• Parties: Pennsylvania Company, etc., v. Philadelphia Electric Company, Appellant
• Court: Pennsylvania Supreme Court

200 A. 18

331 Pa. 125

Pennsylvania Company, etc., v. Philadelphia Electric Company, Appellant

No. 171

Supreme Court of Pennsylvania

June 17, 1938

Argued May 25, 1938

Appeal, No. 171, Jan. T., 1938, from judgment of C.P. No. 5 Phila. Co., Dec. T., 1934, No. 6865, in case of The Pennsylvania Company for Insurances on Lives and Granting Annuities v. Philadelphia Electric Company.Judgment affirmed.

Assumpsit.Before LEVINTHAL, J.

The opinion of the Supreme Court states the facts.

Verdict and judgment for plaintiff.Defendant appealed.

Error assigned, among others, was refusal of judgment n.o.v.

The judgment is affirmed.

Wm Clarke Mason, with him Thomas B. K. Ringe, A. Allen Woodruff and Morgan, Lewis & Bockius, for appellant.

Earl G. Harrison, with him Edmund R. Finegan and Maurice Bower Saul, of Saul, Ewing, Remick & Saul, for appellee.

Before MAXEY, DREW, LINN, STERN and BARNES, JJ.

OPINION

MR. JUSTICE STERN:

This is an action of assumpsit to recover the sum of $48,019.28, with interest, alleged to have been delivered in cash by plaintiff bank to defendant and not repaid, the money being provided for the payment of wages due defendant's employes at its branch office at 23d and Market Streets, Philadelphia.It is defendant's contention that it never received the money.The controversy was submitted to a jury which found for plaintiff in the amount claimed.The facts giving rise to the litigation are, happily, quite unusual.

Starting in the spring of 1933, the bank, in which defendant was a depositor, began the practice of supplying funds for what, generally speaking, may be termed defendant's pay-roll purposes.The money was transported in the bank's armored trucks and disbursed at defendant's office by a teller employed by the bank.In November, 1933, plaintiff brought to defendant's attention a new rule of the Philadelphia Clearing House Association, to go into effect in January, 1934, which prohibited the delivery by member banks of "pay rolls or other funds in any form whatever, . . . outside of and away from the premises of the bank."A conference to discuss this rule was had between two of plaintiff's vice-presidents, defendant's assistant treasurer, and defendant's paymaster.At the trial the recollections of these gentlemen as to their conversation on that occasion varied.Accepting (as we must in view of the jury's verdict)plaintiff's version as the correct one, it appears that its representatives expressed to those of defendant their opinion that, according to the "spirit" of the rule, the bank could not render any outside pay-roll service.It was therefore agreed that, beginning in January, 1934, defendant would, at its own expense, employ Brink's Express Company, an independent carrier, to transport the funds in the trucks of that company.It being suggested by defendant's assistant treasurer that his company had no trained person who could accurately handle the money and perform the work of a disbursing teller, plaintiff agreed that it would "lend" or "supply" an employe to defendant for that purpose until such time as defendant could train one of its own staff for the work, provided that if found to be a violation of the clearing house rule this part of the plan was thereupon immediately to cease.

In pursuance of the arrangement thus made plaintiff regularly, twice a month, delivered the funds to Brink's Express Company, which gave receipts for the money, every such receipt on and after April 18, 1934, being in the sum of $48,500.On December 20, 1934, the money having been delivered in the usual way by plaintiff to the express company, receipted for by the latter in the same amount, and carried by it to defendant's branch office, was delivered to plaintiff's teller who came there for the purpose of disbursing it accompanied by an armed guard, also in the general employ of plaintiff.It was the custom for defendant to give its employes pay checks in the amounts of their respective wages, drawn on the Philadelphia National Bank where defendant likewise maintained a deposit account, and as these checks were presented to the disbursing teller the employes received from him the designated amounts.It was also the custom for the teller, at the close of the day, to return surplus funds, if any, together with the pay checks, to plaintiff bank, which thereupon presented the checks to defendant and received from it a single check, also drawn on the Philadelphia National Bank, covering the sum total of the several checks for which the funds had been expended.

On the day in question, while the disbursing was under way, and after $1,368.78 had been paid out, armed bandits invaded the premises and seized most of the remaining funds.Some of the robbers were subsequently captured and convicted, but, as far as the record discloses, no part of the money taken by them was recovered.

Plaintiff contends that under the arrangement between it and defendant, title to the funds passed at the time they were delivered at the door of the bank to Brink's Express Company for transportation to defendant's office.Defendant, on the other hand, maintains that the transaction consisted merely of a "cashing" of the employes' checks by plaintiff at defendant's office instead of on its own premises, that the money while in the possession of the disbursing teller still belonged to plaintiff, and that none of defendant's funds came into play until the ultimate stage of the transaction when they were used to pay the check given plaintiff in exchange for the individual pay checks.

While undoubtedly there are some circumstances in this peculiar situation which lend color to defendant's theory of the relations between the parties, defendant cannot sustain its position that the trial judge should have given binding instructions in its favor.It is true that when the funds were delivered by the express company at defendant's office they were placed in the hands and charge of one who was in the employ of, and paid by, plaintiff bank, but it is a familiar principle of law that "Where one person lends his servant to another for a particular employment, the servant, for anything done in that particular employment, must be dealt with as a servant of the man to whom he is lent, although he remains the general servant of the person who lent him. . . .The test is whether, in the particular service which he is engaged to perform, he continues liable to the direction and control of his master, or becomes subject to that of the party to whom he is lent or hired": Puhlman v. Excelsior Express & Standard Cab Company,259 Pa. 393, 397;Atherholt v. William Stoddard Company,286 Pa. 278;Venezia v. Philadelphia Electric Company,317 Pa. 557.As the agreement between the parties provided that the disbursing teller was temporarily to be "lent" or "supplied" by plaintiff to defendant, the fact that he was generally in plaintiff's employ loses the significance it otherwise would have.The jury were instructed to consider the employment status of this teller, not as conclusively determining the ownership of the money, but as a factor, together with the other evidence, bearing on that problem.

When the funds were delivered by plaintiff to Brink's Express Company, the only record or voucher which plaintiff had to evidence the transaction was the receipt for the money given by the carrier, and defendant contends that if the bank at that time was parting with its title it would have been necessary for it to receive a check, draft or other appropriate instrument upon the basis of which it paid out the money.Though a matter for the consideration of the jury this argument is not conclusive.While a bank, by virtue of the implied contract arising from the usage of banking, is entitled to demand that an order of a customer to transfer a deposit or pay out funds be in writing, nevertheless, it may, if it so desires, waive its right in that respect, and may legally make such payment or transfer on an oral order, the chief advantage of a written instrument being for evidential purposes: see cases...