Raesser v. Nat'l Exch. Bank of Milwaukee

• Decision Date: 07 January 1902
• Citation: 112 Wis. 591,88 N.W. 618
• Parties: RAESSER v. NATIONAL EXCH. BANK OF MILWAUKEE.
• Court: Wisconsin Supreme Court

112 Wis. 591

88 N.W. 618

RAESSER

v.NATIONAL EXCH. BANK OF MILWAUKEE.

Supreme Court of Wisconsin.

Jan. 7, 1902.

Appeal from superior court, Milwaukee county; J. C. Ludwig, Judge.

Action by Christopher S. Raesser, as administrator, against the National Exchange Bank of Milwaukee. From a judgment in favor of defendant, plaintiff appeals. Affirmed.

The plaintiff's intestate, Bromley, had for some years been agent for a railroad freighting combination known as the Kanawha Dispatch, with duty to solicit shipments of freight, and collect and remit prepayments therefor. During a few months prior to March 11, 1897, he had collected such advance freight moneys, and deposited them to his own account in the defendant bank to an amount considerably exceeding his then balance. He drew checks on March 2d, 3d, and 5th, payable to George A. Hood, cashier of said Kanawha Dispatch, aggregating $5,523.80, for specified freight collections as aforesaid, on various dates extending from December 18th to February 9th. These checks were received by Hood, at Cincinnati, in due course of mail, prior to March 11th, but were not presented to the bank for payment until subsequent to that date. Bromley died March 11, 1897, leaving a bank balance at that time of $6,005.97. The checks, having been first presented, dishonored, and protested, were paid by the bank on the 23d and 27th days of March, upon being indemnified by the railroad companies whom Hood represented. Plaintiff was appointed administrator May 13, 1897. On November 21, 1898, he demanded payment of the entire sum on deposit at the time of Bromley's death, $6,005.97, which being refused, he later demanded and received the surplus above said four checks, $482.17. The plaintiff commenced this action at law to recover the whole balance resting in said bank at the time of Bromley's death, $6,005.97. The defendant interposed answer, setting up the foregoing facts of payment; also setting up the fact that all of said moneys belonged to the railroad companies for whom Bromley was agent, as having been collected by him in a fiduciary capacity, and deposited therein. Trial was commenced to the court and a jury, but at the close of the evidence, by consent of both parties, the jury was discharged, and the court made findings of fact supporting payment of said checks, and held that a defense, upon which judgment was rendered for the defendant, from which the plaintiff appeals.Sylvester, Scheiber & Orth, for appellant.

Winkler, Flanders, Smith, Bottum & Vilas, for respondent.

DODGE, J. (after stating the facts).

This case, as argued by counsel, presents several interesting questions as to the relations resulting from the giving of a check for value on an ordinary bank deposit, if, as is now fully settled in Wisconsin, the giving of such check will be construed to intend an assignmentof the fund pro tanto as between the maker and payee. Pease v. Landauer, 63 Wis. 20, 22 N. W. 847, 53 Am. Rep. 247. The principles and reasons lying at the foundation of the rules of law fixing the rights of an assignee of a fund in the hands of an ordinary debtor or depositary are discussed at some length in Skobis v. Ferge, 102 Wis. 122, 78 N. W. 426, sufficiently, at least, so that only the differences between such depositary and the modern bank of deposit need be considered in applying such rules to the latter. The propositions decided in the Skobis Case were that the modern statutes authorizing suits to be brought by the true party in interest had removed all difficulties in the way of assignments of indebtedness, so that any act which, in the intention of the parties, as between assignor and assignee, constituted a transfer of an indebtedness or of a fund, gives a complete ownership and right of action therefor to the assignee, legal because enforceable by an action at law; that this principle is limited by the further consideration that a debtor or depositary owing one debt and subject to only one action therefor, cannot, without his consent, be subjected to the splitting up of that indebtedness so as to be liable to several actions. Hence that an assignment of a part of a fund, while effective as between the assignor and assignee, cannot be enforced by direct suit at law against the depositary without his consent. It can only be enforced by bringing into court the depositary and all claimants against the fund in one suit, where their various rights can be adjudicated. That form of action being cognizable only by a court of equity, it is said that the assignment is equitable only; not that it is less complete, as between the parties, but merely not enforceable in a direct action at law against the depositary. This objection to its enforceability is one which the depositary can waive, as it is purely for his convenience and benefit; and he can waive it either in advance of the assignment or afterward, when demand is made upon him in or out of court, though he is under no legal or equitable obligation so to do. It will be observed that these limitations on the enforcement of the rights conferred by an assignment are based upon the dominant consideration of protecting completely the rights of the third party (depositary) not participating in the assignment.

Such being the law ordinarily, of course it should apply equally when a bank is a depositary, except so far as the relation between the bank and its depositors is such as to make the same reasons support different conclusions. The doctrine of Pease v. Landauer is based upon one of those distinctions. It has been held from early times with almost unanimity that a bill of exchange drawn by one man upon another, not in any wise designating a specific fund out of which it is to be paid, works no assignment of a fund or portion of a fund which may chance to be in the hands of the drawee. This is based upon the fact, well recognized by the law merchant, that bills of exchange are not always--perhaps are not generally--drawn against funds. The ancient bill of exchange was a mere convenience for enabling a creditor of the drawer to receive his payment at some other place than the latter's residence, and it was drawn on correspondents, who knew of the credit and responsibility of the drawer, and were willing to pay money at his request, and look to him for reimbursement, either by remittance or by reciprocal honor to their own bills of exchange. In modern times, at least, the check upon a banker has attained a different significance. The banker is not customarily or often in the habit of honoring checks except as they are drawn against a fund first placed in his hands for that purpose. This fact has been recognized in the rule, now well established, that it...