Planters' Mercantile Co. v. Armour Packing Co. of Louisiana

• Decision Date: 19 July 1915
• Docket Number: 17230
• Citation: 69 So. 293,109 Miss. 470
• Parties: PLANTERS' MERCANTILE COMPANY v. ARMOUR PACKING COMPANY OF LOUISIANA, LIMITED
• Court: Mississippi Supreme Court

69 So. 293

109 Miss. 470

PLANTERS' MERCANTILE COMPANY v. ARMOUR PACKING COMPANY OF LOUISIANA, LIMITED

No. 17230

Supreme Court of Mississippi

July 19, 1915

APPEAL from the circuit court of Wilkinson county. HON. E. E. BROWN Judge.

Suit by Armour Packing Company of Louisiana Limited, against the Planters' Mercantile Company, begun in a justice of the peace court and appealed to the circuit court. From a judgment there for defendant, plaintiff appeals.

The agreed statement of facts, referred to in the opinion of the court, is as follows:

"That the account sued upon is correct, the defendant claiming to have paid the same as follows: That on the 11th day of January, 1913, defendant sent plaintiff a check for the account one hundred and five dollars, on the Citizens' Bank of Wilkinson county to settle said account. That plaintiff deposited said check on the 13th day of January 1913, in the Louisiana National Bank at Baton Rouge, La., for deposit and collection. That the German-American National Bank of New Orleans, La., received said check on the 15th day of January, 1913, for collection and forwarded same to Citizens' Bank of Wilkinson county for payment and remittance. That on the 17th day of January, 1913, said Citizens' Bank of Wilkinson county, through its cashier C. C. McLeod, marked said check, 'Paid,' and charged the amount of same on the books of said bank to defendant's deposit account. That Cashier McLeod made no remittance at all for said check, and no payment of said check was ever made to plaintiff or any one for plaintiff. That said check was indorsed by plaintiff and said Louisiana National Bank and said German-American National Bank. That on the 17th day of January, 1913, the said Citizens' Bank was insolvent, and insolvency caused by concealed fraudulent acts of said McLeod; but no officer of said Citizens' Bank of Wilkinson county, except the said C. C. McLeod, knew or believed, on the 17th day of January, 1913, that the said Citizens' Bank was insolvent. That on the 20th day of January, 1913, the Citizens' Bank of Wilkinson county closed its doors as an insolvent institution, suspended, and went into the hands of a receiver. That the defendant did not know, or have good reason to suspect, until the 20th day of January, 1913, that the said Citizens' Bank was insolvent, and that defendant then, on said date, had several thousand dollars on deposit with said Citizens' Bank subject to defendant's check, and was more than sufficient money to meet all of the outstanding checks drafts, or other obligations. That plaintiff's remitting office is and was Baton Rouge, La., and domicile in Chicago Ill. That said L. T. Ventress is president of defendant corporation, and was president of said Citizens' Bank of Wilkinson county on the 17th and 20th days of January, 1913. That the check mentioned and books of the said Citizens' Bank may be produced in evidence on the trial of this cause, and that any other facts, information, or evidence desired by the court or the parties may be introduced at the trial, explained, and amplified.

Judgment reversed and cause remanded.

W. F. Tucker, for appellant.

The only contention that appellee can make in this suit is, that when the check was received and stamped paid by the payee bank and the amount of same charged against appellant's deposit account, the payee bank was at that time insolvent and was a matter of juggling of figures and not of payment.

The Citizens Bank of Wilkinson county on which the check was drawn was at that time a going institution and had on hand and in other banks ample funds to pay this check, and no one, not even the officers of said bank knew, or believed, that the bank was insolvent on the 17th day of January, 1913; and the facts in the case show that if the check had been presented by the proper agent the same could have been paid in any manner desired by such agent.

It is a well-settled rule that a collecting bank which takes for collection a check drawn and payable on and by another bank is guilty of negligence in sending such check to the payee bank and is liable to the customer for any loss. 3 Ruling Case Law, section 255 and note thereunder; Merchants National Bank of Philadelphia v. Goodman, 58 Am. Rep. 728, and other cases cited therein; 5 Cyc. pp. 503 and 504, and note 66 thereunder.

It is also well settled that where a check is drawn by a depositor against his deposit in a bank, forwarded to his creditor, returned in the due course of banking business by the creditor or his collecting bank to the payee bank for payment and remittance, and by the payee bank stamped paid, put on the file of paid and canceled checks and charged against the drawer's deposit account, is payment to the principal or creditor, and is an absolute discharge of the debt, "and that it is a matter of no consequence, so far as the debtor is concerned, whether the bank accounts for it or misapplies it." 3 Ruling Case Law, section 269, and note 18 thereunder; Oddie et al. v. The National City Bank of N. Y., 6 Am. Rep. 160; American Reports, 160; American Exchange National Bank v. Gregg, 32 Am. St. Rep. 171; Grigg v. Central National Bank of the City of N. Y., 42 Am. Rep. 285; City National Bank of Selma v. Burns, 44 Am. Rep. 138.

In Billingsley v. Pollock, Receiver, 69 Miss. 759, Chief Justice CAMPBELL held, that where a note in bank for collection was paid by check received as money, drawer of check having ample funds on deposit, the maker of the note was discharged, although the bank was insolvent and known by its officers to be insolvent and on its own application passed into the hands of a receiver on the day it remitted for collection of the note; and in this case the appellant had ample funds on deposit, and no one but the defaulting cashier had any other thought than that the Citizens Bank of Wilkinson county was a sound, solvent and money-making institution.

Bramlette & Bramlette, for appellee.

This is a suit of Appellee v. Appellant, which the agreement of counsel says is correct. See record page 6. Appellant's only defense was payment, and this was sought to be shown by a check on the The Citizens Bank of Wilkinson county, drawn by appellant in favor of appellee, and which appellee deposited in a Louisiana bank for collection on January 15 1913, and same was forwarded to said Citizens Bank for payment and remittance. Page 6 of record. And on 17th day of January, 1913, McLeod, Cashier of the Citizens Bank, marked the check paid, and charged to appellant's deposit account, that no remittance for said check was made to appellee, nor to any one for him. And that on said 17th day of January, 1913, said Citizens Bank was insolvent. This action of McLeod, Cashier, in stamping the check, paid the same to appellant's account when the Citizens Bank was insolvent, was not payment but only a juggling of the books of the Citizens Bank. See 5 Cyc., note 66 at page 504. For it is elementary that nothing is payment of a debt except money legal tender unless the creditor and debtor agrees that something else may be received as payment. In Bank of Greenville v. Kretchsmar, 91 Miss., at lower half of page 615, this court's unequivocal utterance is this: "A check is not payment, unless the check is paid, and unless it is specially agreed by the parties, that the check, whether good or not, shall have that effect; and the burden of proof always rests on the party giving it, to show that the check was to have that effect. The presumption is against it being so received, and this presumption can only be overcome by clear...