Cockrill v. Joyce

Riddick, J., (after stating the facts.) The question in this case is whether the receiver of the bank has the right to hold the notes in controversy for the payment of the balance due it from the McCarthy & Joyce Company. There is conflict in the testimony as to whether the notes were delivered to the bank for collection, or to be held as collateral security. The cashier of the bank testified that the notes were delivered as collateral to secure indebtedness of the McCarthy & Joyce Company to the bank. On the other hand, the bookkeeper and secretary of the company, who delivered the notes to the cashier of the bank, testified that they were delivered for collection. He said that the cashier of the bank called at their office, and asked “what notes they had,” saying that the bank examiner would be there shortly, and he wanted to make a good showing to him; that witness thereupon delivered to the cashier the notes in controversy, the face value of which amounted to eleven thousand dollars. “I intended,” he said, “for the bank to collect the notes, and place them to our credit.” Under these circumstances, we conclude that the bank had a lien upon the notes for the payment of the amount due it by the company, without regard to the fact whether there was an express agreement for a lien or not. The law on this subject is well settled, and is thus stated by a recent writer: “A banker has a lien on all securities of his debtor in his hands for the general balance of his account, unless such a lien is inconsistent with the actual or presumed intention of the parties. The lien attaches to, notes and bills and other business paper which the customer has entrusted to the bank for collection, as well as to his general deposit account. * * * And so, if the securities be deposited after the credit was given, the banker has a lien for his general balance of account, unless there be an express contract, or circumstances that show an implied contract, inconsistent with such lien.” 1 Jones, Liens, (2 Hd.), sec. 244. We see nothing in this case inconsistent with such a lien, or showinga different intention on the part of those concerned. The undisputed facts are that the company was owing the bank nearly a hundred thousand dollars. The cashier of the bank reminded the bookkeeper and secretary of the company of this fact, and asked for these notes that he might make a good showing to the bank examiner, who was expected shortly. In response to this request, the secretary delivered the notes; intending, so he says, that the bank should collect them, and place the proceeds to the credit of th^ company. He was an officer and stockholder'in the company, and his authority to deliver the notes is not denied. Taking his statement as true, we think the bank had a lien upon the notes for the payment of the balance due from the company. Kelly v. Phelan, 5 Dill. 228; Reynes v. Dumont, 130 U. S. 392; Bank of Metropolis v. New England Bank, 1 How. 239; 1 Jones on Liens, secs. 241-244. as to estoppel by elecUo11In addition to this, if these notes were placed in the bank by the company to make it appear to the bank examiner that the indebtedness on the part of the company to the bank was well secured, it furnishes another reason why the company should not now be allowed to withdraw the notes without discharging its debt. It is further contended that the bank, having elected, to claim under the assignment, and to .share in the proceeds of the property assigned, is now estopped to assert title to the notes. There is no express reference to these notes in the assignment, though it, in general terms, conveyed “all notes, accounts, evidences of debt, and choses in action of every kind belonging to said company.” This, of course, conveyed any interest that the company had in these particular notes which was the right to redeem them upon paying its debt to the bank. The notes were in the custody of the bank at the time of the assignment, and it in no way affected the right of the bank to hold such notes. The title to the notes was in no way involved in the application of the bank for the appointment of a receiver to take charge of the assets conveyed by the assignment, for the assignment did not convey, or purport to convey, more than the right to redeem the notes. The receiver of the company knew that the bank held the notes, and was fully informed by the bank of its claim to the notes. The receiver was only authorized to sell the property in his hands, and the appellees recognized this, for they confined their bid to the property in the hands of the receiver. As the receiver was not offering to sell, or the appellees proposing to purchase, any property, except that in the possession of the receiver, the bank, by consenting to the confirmation of such sale, and sharing in the proceeds thereof, was not estopped from asserting its claim to property not in the possession of the receiver, or embraced in his sale. The bank at all times affirmed its right to hold these notes as a partial security against the amounts due it by the company, and, so far as we can see from the evidence, the appellees were in no way misled by the bank or its agents. Appellees made their bid for and received the property in the possession of the receiver. If they expected by this purchase to obtain title to notes held by the bank, and not within the control of-, the court or its receiver, it was a mistake, of law for which the bank was in no way responsible. Our conclusion is that the doctrine of estoppel does not apply in this case. inc¿usfstent.ot Neither do we think that the claim of a general lien by the bank is inconsistent with its claim of a lien by express agreement. It asserted the right to hold the notes as security for the payment of the debt of the company, and its answer was drawn so as to cover both a general lien and a lien by special contract. The judgment of the chancery court is therefore reversed, and the petition of appellees is dismissed. Battle, J., being disqualified, did not sit in this case.