Shapiro v. Sioux City Dressed Beef, Inc.

• Decision Date: 18 June 1958
• Parties: Myer SHAPIRO et al. v. SIOUX CITY DRESSED BEEF, Inc., Live Stock National Bank, Claimant.
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court

Page 492

151 N.E.2d 492

337 Mass. 718

Myer SHAPIRO et al. v. SIOUX CITY DRESSED BEEF, Inc., Live Stock National Bank, Claimant.

Supreme Judicial Court of Massachusetts, Suffolk.

Argued May 5, 1958.

Decided June 18, 1958.

Paul L. Keenan and Leon Aborn, Boston, for plaintiff.

Robert W. Weinstein, Brookline, for claimant.

Before WILKINS, C. J., and RONAN, WILLIAMS, COUNIHAN and WHITTEMORE, JJ.

WILLAIMS, Justice.

The immediate issue in this case is the title of Live Stock National Bank of Sioux City, Iowa, to a fund of $750 held by Rockland-Atlas National Bank of Boston under trustee process. The fund represents the balance of moneys collected by the Rockland-Atlas bank on a draft in the sum of $5,711.40 dated October 29, 1956, drawn by the defendant on City Packing Co., 115 New Market Square, Boston, and payable to the Iowa bank. It was deposited on that date, accompanied by an order bill of lading, by the defendant in its checking account in the Iowa bank in Sioux City. The deposit slip read: 'Items received for deposit or collection are accepted on the following terms and conditions. This bank acts only as depositor's collecting agent and assumes no responsibility beyond its exercise of due care. All items are credited subject to final payment and to receipt of proceeds of final payment in cash or solvent credits by this Bank at its own office. * * * This Bank may charge back * * * any item drawn on this Bank which is ascertained to be drawn against insufficient funds or otherwise not good or payable.' The bank credited the defendant with the amount of the deposit. In its dealings with the bank it was customary for the defendant to draw against deposits as soon as made and before drafts were paid or payment refused. By November 2 the defendant had withdrawn from its account the entire deposit and in fact had overdrawn its account by $1,322.48.

The draft on City Packing Co. was forwarded for collection through the Federal Reserve Bank of Boston to the Rockland-Atlas bank which received it on October 31. It notified the drawee and received from it payment in full on the morning of November 8. A few minutes later the Rockland-Atlas bank was served as trustee with a writ in an action by trustee process which had been commenced in the Superior Court by the plaintiffs against the defendant on November 7. The ad damnum of the writ was $750. The trustee thereupon forwarded $4,961.40 to the Iowa bank and retained $750. It filed an answer as trustee on December 7 reciting the facts as to the payment of the draft. The defendant appeared specially and filed an answer in abatement on December 19 denying the court's jurisdiction on the ground that no goods, effects or credits belonging to it had been attached. On December 24 the Iowa bank moved that it be admitted as a party and that its title to the funds held by the trustee be determined. The motion respecting its admission as a party was allowed. G.L. (Ter.Ed.) c. 246, § 33. After hearing, the court found that the claimant Iowa bank never acquired title to the draft in question or to the funds under attachment and, 'treating' the rest of its motion as a petition, ordered that it be dismissed.

The case is before us on exceptions of the Iowa bank to the denial of its requests for rulings, those material to the facts here presented being (1) 'The law of Iowa governs the question of ownership of the draft involved in this action,' and (2) 'The law of Iowa governs the question of the ownership of the funds attached in this action.' It is plain that the legal effect of depositing the draft in the Iowa bank must be determined by Iowa law. See Brooks v. Bigelow, 142 Mass. 6, 6 N.E. 766. '[T]he nature, validity, and interpretation of a contract are to be governed by the law of the place where it is made.' 'Thomas G. Jewett, Jr., Inc., v. Keystone Driller Co., 282 Mass. 469, 475, 185 N.E. 369, 371, 87 A.L.R. 1298, and cases cited. Fourth National Bank v. Bragg, 127 Va. 47, 60-61, 102 S.E. 649, 11 A.L.R. 1034. The petitioner followed our rule of practice (Eastern Offices, Inc., v. P. F. O'Keefe Advertising Agency, Inc., 289 Mass. 23, 26, 193 N.E. 837; Bradbury v. Central Vermont Ry., 299 Mass. 230, 234, 12 N.E.2d 732) by directing the court's...