Josiah Morris & Co. v. Alabama Carbon Co.

SHARPE, J. — Plaintiff’s draft on Wood Brothers baying been drawn in favor of the casliier of the Commercial Bank of Selma merely for the purpose of enabling that bank to collect and apply the proceeds thereof to plaintiff’s credit did not have effect to divest plaintiff of its equitable ownership of the debt drawn for. That bank’s endorsement of the draft to defendants did not have such effect since, as shown by the letters of advice accompanying the drafts, it took the paper not as a purchaser but in the capacity of a. collecting agent for the forwarding bank. — Williams v. Jones, 77 Ala. 294; Branch v. U. S. Nat. Bank, 50 Neb. 470; 70 N. W. 34. The first of these letters, viz., the letter of plaintiff advising the Commerical Bank that the draft was for collection, was, when forwarded to defendants, sufficient to put them on notice that plaintiff remained the beneficial owner of the claim sought to be collected, notwithstanding the form of the draft and of the endorsement were such as to transfer the legal title of the claim. The assignment of and cessation of business by the Commercial Bank of Selina, occurring previous to the collection of the draft, operated to terminate the agency of the bank and to forestall whatever right defendants might, in the absence of those occurrences, have had to retain the proceeds of the draft as a payment on the debt due them by that bank, and the plaintiff as the. equitable owner of these proceeds had the right to recover therefor as for money had and received to its use. As supporting this conclusion see People’s Bank of Lewisburg v. Jefferson County Savings Bank, 106 Ala. 524; Evansville Bank v. German Am. Bank, 155 U. S. 556; Wilson v. Smith, 96 U. S. 35; Branch v. U. S. Nat. Bank, 50 Neb. 470; 70 N. W. Rep. 34; Millikin v. Shapleigh, 36 Mo. 599; First National Bk. of Chicago v. Reno County Bk., 3 Fed. Rep. 257; Zane on Banking, pp. 297, 322, 315, 317. Judgment affirmed.