Whitney v. Eliot National Bank

• Decision Date: 28 June 1884
• Court: United States State Supreme Judicial Court of Massachusetts Supreme Court
• Parties: Charles Whitney & another v. Eliot National Bank & others

137 Mass. 351

Charles Whitney & another v. Eliot National Bank & others

Supreme Court of Massachusetts

June 28, 1884

Argued November 23, 1883 [Syllabus Material]

Suffolk. Bill of interpleader, filed May 9, 1883, against the Eliot National Bank, and James N. Smith and Charles H. Northam copartners doing business under the firm name of Smith Northam, and Company, to determine the ownership of a sum of money deposited with the plaintiffs.

The bill alleged that, on March 21, 1883, the firm of Hatheway and Company, doing business in Boston, in this Commonwealth placed in the hands of the plaintiffs the sum of $ 1590 for the benefit of whom it might concern; that said sum was the amount received by said firm from George Morrison, of St. John, New Brunswick, hereinafter referred to; that said firm, on March 16 and 17, having theretofore shipped to Morrison 500 barrels of meal, by schooner Aurora Borealis, for which the sum of $ 1590 was to be paid to said firm by Morrison, made two drafts in favor of the Eliot National Bank of Boston, for the sum of $ 795 each, upon Morrison, chargeable "to 250 bbls. meal, ex. Aurora Borealis, account of Hatheway & Co.;" that said bank discounted the drafts upon the information that the meal had been sold and shipped, and the belief that Morrison would accept and pay the drafts to the bank; that Morrison, instead of accepting the drafts on the date of presentation, remitted said sum of $ 1590 to Hatheway and Company; that the same mail which brought said remittance to Hatheway and Company, brought notice of the protest of the drafts for nonacceptance, and of a disaster to the steamship City Point, a vessel owned largely by said firm; and said firm thereupon suspended payment and has not since resumed; that Hatheway and Company purchased the lot of meal in question of Smith, Northam, and Company, a copartnership doing business at Hartford, Connecticut, immediately before selling the same to Morrison; that the Eliot National Bank and the firm of Smith, Northam, and Company claimed said money in the plaintiffs' hands, and both threatened to bring suit therefor and to attach the same in the hands of the plaintiffs; and the plaintiffs were willing and desirous to pay said money to the person or persons entitled to receive the same, and offered to pay the same into court.

The answer of the Eliot National Bank alleged that the firm of Hatheway and Company, on March 16 and 17, 1883, having theretofore shipped to said Morrison 500 barrels of meal under the circumstances alleged in the bill, procured to be discounted at said bank two drafts, each of which, dated respectively March 16 and 17, 1883, was as follows: "$ 795.00. At sight, pay to the order of the Eliot National Bank seven hundred and ninety-five dollars, value received, and charge the same to account of 250 bbls. meal ex schooner 'Aurora Borealis.' Hatheway & Co. To Geo. Morrison, Esq., St. John, N. B.;" that the proceeds derived from the discounting of the same were immediately placed to the credit of the firm of Hatheway and Company, who had an account with said bank as a customer thereof; that, previously to the procuring of the drafts to be discounted, Hatheway and Company had received directions from Morrison not to draw upon him for this consignment of meal; that Hatheway and Company omitted and failed to communicate the fact of said directions at the times that they procured the drafts to be discounted; and that it was a considerable time thereafter before the bank came to a knowledge thereof.

Charles G. Dyer, assignee in insolvency of Hatheway and Company, filed a motion that he might be admitted as a defendant in the case, for the reason that the sum of money held by the plaintiffs belonged to him as such assignee, for the benefit of the creditors of the insolvent firm. This motion was allowed; and Dyer filed an answer alleging, among other things, that said drafts were not attached to any bill of lading; that, on March 21, Hatheway and Company received from Morrison, two checks, one for $ 990, drawn by the Bank of New Brunswick on said Eliot National Bank, and one for $ 600, drawn by the Halifax Banking Company on the Suffolk National Bank of Boston, in favor of Hatheway and Company; that these checks were the moneys deposited with the plaintiffs by Hatheway and Company for the benefit of whom it might concern; and that the checks have, since said depositing, been converted into money by the plaintiffs; denied that the same mail which brought said checks from Morrison also brought information of the dishonor of said drafts; but stated that he believed upon information that, at the time of the remittance, only the first draft had been presented for acceptance, and that the second draft was not presented until the day after said remittance; and denied that said checks were not placed in the mail until after both of said drafts had been presented for payment or acceptance.

It was agreed that the averments in the bill, and in the answers of the Eliot National Bank, and of Charles G. Dyer, assignee in insolvency, should be taken to be true, except as controlled by the following agreed statement of facts:

The petition in insolvency of Hatheway and Company was not filed until about three weeks after this bill of interpleader was filed. The two checks received as the remittance from Morrison were immediately deposited in bank upon being received by the stakeholders, and became immediately converted into money. Said remittance was made before the second draft was presented, and after the first draft had been presented, but Morrison had received advices from Hatheway and Company, before he made the remittance to Hatheway and Company, that the latter had drawn upon him for the price of the consignment. Hatheway and Company received the two checks on March 21, and immediately placed them in the hands of the stakeholders. The Eliot National Bank learned the same day that Hatheway and Company had received the remittance, but not until after the same had been placed in the hands of the stakeholders; and, immediately upon obtaining said information, demanded of Hatheway and Company that they should pay over the amount directly to the bank.

At the hearing, before Colburn, J., it was ordered that the bill be taken for confessed against the defendants Smith and Northam and the case was reserved for the consideration of the full court on the bill, answers, and agreed facts;...