Tapee v. Varley-Wolter Co.

• Citation: 171 S.W. 19,184 Mo. App. 470
• Decision Date: 23 November 1914
• Docket Number: No. 11268.,11268.
• Parties: TAPEE v. VARLEY-WOLTER CO. et al.
• Court: Court of Appeal of Missouri (US)

171 S.W. 19

184 Mo. A. 470

TAPEE v. VARLEY-WOLTER CO. et al.

No. 11268.

Kansas City Court of Appeals. Missouri.

November 23, 1914.

1. JUSTICES OF THE PEACE (§ 157) — APPEAL — PARTIES — DUAL CAPACITY.

Rev. St. 1909, § 7570, provides that the party applying for an appeal from a justice's judgment, or some person for him, shall make affidavit that the application is not made for vexation or delay, but because he believes the appellant is injured by the judgment of the justice, etc. Held, that where a bank was compelled to appear as a defendant in a justice's court, and voluntarily appeared also in the capacity of an interpleader, and plaintiff procured a personal judgment against it as the sole defendant, the fact that an affidavit for an appeal referred only to its capacity as a defendant did not deprive the circuit court of jurisdiction, because the judgment was rendered against it in its capacity as interpleader.

2. BILLS AND NOTES (§ 353) — DRAFTS — BILL OF LADING — BONA FIDE PURCHASER.

The rule that a bank, by discounting negotiable paper, placing the same to the depositor's credit, honoring his checks or drafts against it, surrendering him securities, or in some other manner making advances on the faith of the deposit, becomes a holder for value, but that mere discounting and crediting the depositor's account, without making payment or incurring any increased obligations or liabilities, is not sufficient, does not apply to the purchase by a bank of a draft with a bill of lading attached.

3. CARRIERS (§ 58) — BILL OF LADING — DRAFTS — TRANSFER — BANK'S LIABILITY.

Where a bank discounted a draft with a bill of lading attached, drawn on the buyer of potatoes from the drawer, and the buyer obtained delivery of the potatoes after and by virtue of his acceptance and payment of the draft, the bank did not occupy the position of an intermediate purchaser of the potatoes, but rather as a holder of the bill of lading as security for

the draft, and hence was not liable to the buyer for alleged defects and deficiencies in the potatoes.

Appeal from Circuit Court, Buchanan County; Charles H. Mayer, Judge.

Action by J. H. Tapee against the Varley-Wolter Company, in which the Market State Bank was joined as defendant and interpleaded. Judgment for plaintiff, and the bank appeals. Reversed and remanded.

Spencer & Landis, of St. Joseph, for appellant. W. N. Linn and E. M. Swartz, both of St. Joseph, for respondent.

JOHNSON, J.

Plaintiff, a produce dealer in St. Joseph, brought suit by attachment in a justice court against the Varley-Wolter Company, of Minneapolis, Minn., and had the First National Bank of St. Joseph summoned as garnishee. Afterward, on motion of plaintiff, the Market State Bank of Minneapolis was joined as a defendant. The ground of attachment was the nonresidence of the defendants. An attempt was made to obtain constructive service on the original defendant, but at the trial in the justice court that defendant was dismissed, and a judgment was rendered "that plaintiff recover from the Market State Bank of Minneapolis the sum of $45 so found as aforesaid, together with costs of this suit, and that plaintiff have execution therefor, and that said execution be a special execution on the property attached in this cause." The garnishee had answered:

"We have $577.32 paid to us on account of draft received from the Market State Bank of Minneapolis, drawn by Varley-Wolter Company, which is claimed by above-mentioned Market State Bank as belonging to them."

After the filing of this answer the Market State Bank appeared and filed an interplea in the justice court, claiming title to the money held by the garnishee. In the judgment to which we have referred the justice found against the defendant bank on its interplea, and, as shown, rendered personal judgment against it as a defendant for the full amount of plaintiff's demand. Afterward and in proper time an affidavit for appeal was filed, in which the affiant, who was the agent of the appellant, made oath that "defendant's application for an appeal from the merits is not made for vexation and delay," etc. The appellant was not mentioned by name in this affidavit, nor referred to as interpleader, and this omission is the subject of an objection to the jurisdiction of the court over the cause which shall receive our attention in its proper place. The cause was tried in the circuit court without the aid of a jury, and judgment was rendered against both defendants for $50.21, and it was further adjudged:

"That the sum of $577.32 was and is in the hands of the First National Bank of Buchanan county as garnishee of the above defendants, the money and property of said defendants, and it is ordered and adjudged that the said * * * garnishee pay to the clerk of this court or the sheriff of this county the said sum of $50.21, the amount of said judgment, together with the costs herein," etc.

Just when or in what manner the original defendant was brought back into the case is not made clear, nor is it a fact of any consequence, in the view we have of the case. The Market State Bank alone appealed from this judgment, and we have no concern with the question of whether or not the judgment is valid as to the original defendant.

The controversy before us grew out of the sale of a carload of potatoes by the Varley-Wolter Company to plaintiff through the agency of a broker in St. Joseph. The sale was made at $1.30 per bushel delivered on track at St. Joseph, and on March 28, 1912, the car, containing 530 bushels, of the gross value of $689.00, was shipped by the vendor at Minneapolis and consigned to its own order at St. Joseph, with directions in the bill of lading to notify plaintiff and to "allow inspection." A draft was drawn by the vendor on plaintiff for $689, and with bill of lading attached was sold to the Market State Bank for $601, the sum that would be due the vendor after the payment at St. Joseph of the freight charges, which were estimated at $88. The vendor had an account with the Market State Bank, and the proceeds of the sale of the draft, to wit, $601, was credited to its checking account. The bank purchased the draft in the usual course of business and without the knowledge of any defect or deficiency in the goods described in the attached bill of lading. It appears it was customary for the bank in such transactions to buy drafts outright from its customers for the full amount of the proceeds, less the freight charges, and afterward to charge the exchange and collection expenses to the customer's account. After purchasing the draft and bill of lading, the Market State Bank forwarded them to the First National Bank at St. Joseph, with instructions to collect the draft and to pay the freight charges on the car out of its proceeds. In other words, the collecting bank was authorized to accept the amount of the freight bill paid by plaintiff as a payment upon the draft. The draft and bill of lading were at the St. Joseph bank on the arrival of the car. After being allowed to inspect the contents of the car, plaintiff paid the draft in full, obtained the attached bill of lading, and then received the property from the carrier. After removing it to his place of business, he presented a claim to the vendor for damages growing out of an alleged shortage, and of the rotten condition of some of the potatoes. The vendor rejected the claim, on the grounds that it was not well founded in fact, that the title to the property had passed to the Market State Bank before the acceptance and payment of the draft by plaintiff, and that the vendor had no interest in the money attached in the hands of the garnishee.

In support of the point that the circuit court acquired no jurisdiction over the cause, counsel for plaintiff say in their brief:

"The justice having rendered judgment against appellant as interpleader, and there being no appeal by appellant as interpleader from that judgment, the judgment of said justice against it as interpleader still remains in full force and effect" — citing Fischer v. Anslyn, 30 Mo. App. 316; Urton v. Sherlock, 61 Mo. 257; Gray v. Dryden, 79 Mo. 106; Roberts v. Shepherd, 96 Mo. App. 698, 70 S. W. 931.

These are cases holding, in substance, that a judgment rendered against two or more defendants in a justice court becomes a finality against one of such defendants who fails to appeal, whether or not an appeal be taken by the remaining defendants. That rule has no application to the point raised by plaintiff, which, in substance, is that the circuit court acquired no jurisdiction of the issues raised by the interplea of the...