The National Bank of Commerce of Seattle v. Johnson
| Decision Date | 14 November 1896 |
| Citation | 69 N.W. 49,6 N.D. 180 |
| Court | North Dakota Supreme Court |
Appeal from District Court, Stutsman County; Rose, J.
Action by the National Bank of Commerce of Seattle against Caleb C Johnson, receiver of the Lloyds National Bank of Jamestown. Adolph W. Geschke intervened, and from a judgment in his favor plaintiff appeals.
Affirmed.
Edgar W. Camp, for appellant.
Fredus Baldwin, for respondent.
The contest before us relates to the rights of the parties to this litigation to two dividends declared by the comptroller of the currency, payable out of the assets of the Lloyds National Bank, which had become insolvent and had been placed in the hands of a receiver. The claim on which the dividends were allowed was presented by the plaintiff. But, after they had been declared, the intervener, who had attempted without success to prove the same claim against the assets in the hands of the receiver, notified the receiver not to pay such dividends to the plaintiff. As a consequence the receiver refused to pay the plaintiff, and, being sued by him to recover the same, he asked to be released on paying into court the amount due. The intervener appeared in the action, and filed his complaint in intervention. The receiver, on paying the money into court, was discharged from all liability, and the struggle is now between the plaintiff and the intervener to obtain possession of this fund in court. The plaintiff answered the complaint in intervention and the case was tried before the court without a jury. The learned trial judge awarded the fund to the intervener, and the plaintiff brings the case to this court for a trial de novo. No serious controversy with respect to the fact seems to exist. The intervener was the owner of a certificate of deposit issued by the Lloyds National Bank, payable to his order. On June 23, 1893, he left it with the Anacortes Bank of Anacortes, in the State of Washington, for collection, taking a receipt therefor from such bank. It was indorsed by him as follows: "Pay to the order of Bank of Anacortes for collection for account of Adolph W. Geschke." The Anacortes Bank forwarded it in due course to the plaintiff, its regular correspondent at Seattle, Wash., for collection and credit. The intervener knew that it would be so forwarded for collection to a Seattle Bank. The plaintiff sent the certificate directly to the Lloyds National Bank, which, on receipt of the same, issued and sent to the plaintiff its draft for the amount due, on the National Bank of St. Paul, Minn. On receipt of such draft the plaintiff credited the Anacortes Bank with the amount due, and notified it of such credit, and also forwarded the St. Paul draft to its correspondent in St. Paul, the Merchants' National Bank of that city, for collection. The Anacortes Bank received notice of the credit July 13, 1893, and on that day charged up to the plaintiff the amount thereof; and thereafter it issued to the intervener, at his request, a certificate of deposit for the amount of such collection, he surrendering to the Anacortes Bank the receipt given him by such bank for the certificate of deposit issued by the Lloyds National Bank at the time he intrusted it to the Anacortes Bank of collection. Shortly afterwards the plaintiff received word that payment of the St. Paul draft had been refused, and immediately notified the Anacortes Bank of that fact by wire and by mail, and charged back to it the amount of such draft. This was July 14th. On or about the 15th the Anacortes Bank credited the plaintiff with the amount of such draft, and the intervener returned the certificate of deposit issued by it to him. The Anacortes Bank, however, received word of the dishonor of the St. Paul draft on the 14th; and on that day the intervener was notified by it of such fact, and requested to surrender his certificate of deposit. At this time he did not respond to this request, but shortly thereafter he did surrender it, and take from the Anacortes Bank a duplicate receipt for the original certificate issued to him by the Lloyds National Bank. The Anacortes Bank did not open its doors to transact business after the close of business hours on the 15th of July. Whether the intervener surrendered his certificate before or after this suspension of business is not very clear. The only evidence which bears at all on the point is the testimony of Mr. Merritt, the cashier of the Anacortes Bank, that the intervener never, to his knowledge, surrendered the certificate while the bank was solvent, and the testimony of the intervener himself, that he thought that the duplicate receipt was issued to him after the bank had failed. It is perhaps a fair inference from this evidence that the surrender of the certificate was not made until after the bank had closed its doors. Upon these facts, we are to answer the question which of the two parties to this controversy has the legal right to the fund in court? What our answer to this inquiry will be will depend upon the further question whether the title to the claim against Lloyds National Bank, on which the two dividends have been declared, was and is in the plaintiff or in the intervener.
The certificate of deposit issued by the Lloyds National Bank was the property of the intervener. He did not sell it to the Anacortes Bank, but merely intrusted it to such bank as his agent to collect the same and place the amount of such collection to his credit. By indorsing it for collection and credit, he notified the whole world that he had not parted with his title to the paper; that whoever might secure possession of it in the course of its transmission from bank to bank in the process of making the collection, according to the usages of banks, would hold it as his property, and therefore could not treat it as the property of any other person or of any corporation. The authorities are unanimous on this point. Naser v. Bank, 116 N.Y. 492 22 N.E. 1077; First Nat. Bank v. Bank of Monroe, 33 F. 408; Bank v. Armstrong, 39 F. 684; Bank v. Hubbell, 117 N.Y. 384, 22 N.E. 1031; Blaine v. Bourne, 11 R.I. 119; Claflin v. Wilson, 51 Iowa 15, 50 N.W. 578; Hoffman v. Bank, 46 N.J.L. 604; Bank v. Gregg, 79 Pa. 384; Bank v. Clark, 23 Minn. 263; First Nat. Bank of Crown Point v. First Nat. Bank of Richmond, 76 Ind. 561; Tyson v. Bank, 77 Md. 412, 26 A. 520; Armstrong v. Bank, 90 Ky. 431, 14 S.W. 411; Freeman's Nat. Bank v. National Tube-Works Co., (Mass.) 151 Mass. 413, 24 N.E. 779; Sweeny v. Easter, 68 U.S. 166, 1 Wall. 166, 17 L.Ed. 681; Manufacturers' Nat. Bank v. Continental Bank, 148 Mass. 553, 20 N.E. 193; Bank v. Hanson, 33 Minn. 40, 21 N.W. 849; Boykin v. Bank, (N.C.) 24 S.E. 357; Bank v. Armstrong, 148 U.S. 50, 13 S.Ct. 533, 37 L.Ed. 363; Old Nat. Bank v. German-American Nat. Bank, 155 U.S. 556, 15 S.Ct. 221, 39 L.Ed. 259. The certificate being, to the knowledge of the plaintiff, the property of the intervener, it could not make advances thereon to the Anacortes Bank, or in any manner deal with it except as the property of the intervener. Until it should have collected the same, the relation of principal and agent would exist between it and the intervener. Any advance or credit which it might make prior to that time would not in any manner prejudice the intervener's right to it, or to other property in the hands of the plaintiff which had been substituted for it. See authorities above cited. The intervener, having employed bank agencies to collect his paper,--having placed it in the channels of banking business for that purpose,--must be deemed to have assented to the usages of banks in transacting business of that character. Freeman's Nat. Bank v. National Tube-Works Co., 151 Mass. 413, 24 N.E. 779. He testified that he was informed that the Anacortes Bank would make the collection through a bank in Seattle, and, having made no provision to have the identical money collected sent to him (there being no pretense that he expressed a willingness to pay the heavier charges incident to this mode of making the collection,) he must be deemed to have assented to the transmission of the money from one subagent to another, and finally to the original agent, by the well known and universally employed system of bank credits. The form of his indorsement to the Anacortes Bank rather strengthens this inference. He indorsed it to that bank, not only for collection, but for credit also; thereby authorizing that bank, the minute it should receive the money, to mingle it with its own funds, and give him credit for the same, thus changing the relation between him and the bank from that of principal and agent to that of creditor and debtor. Freeman's Nat. Bank v. National Tube-Works Co., 151 Mass. 413, 24 N.E. 779; Manufacturers' Nat. Bank v. Continental Nat. Bank, (Mass.) 148 Mass. 553, 20 N.E. 193. He intended that the Anacortes Bank should, on collecting his money, become his debtor therefor; and, not having made provision for the transmission of the actual cash from bank to bank, he must be deemed to have agreed that the remittance should be made, through such intermediate agents as should be engaged in the collection and transmission of the money to the Anacortes Bank, by bank credits and debits. If the plaintiff had actually collected the amount due on the certificate, it could lawfully have credited the amount of such collection to the Anacortes Bank, and thus have transmuted its relations of agent for the owner to that of debtor to the Anacortes Bank. Thereafter the only right which the owner would have had against the plaintiff would have been to claim that he could follow his property, in this changed form (i. e. the credit to the Anacortes Bank,) until, in...
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