Bury v. Woods

Opinion by Hall, J. The errors complained of in this court are : 1st. That the court below should not have given plaintiffs’ declarar tion of law. 2d. That the said court should have given the declarations of law asked by defendant. I. Considered abstractly, plaintiffs’ declaration of law is correct. And it is abundantly supported by the evidence so far as its terms favor plaintiffs. That the defendant paid any present valuable consideration for the note in controversy it is not contended. Unless then, some credit was given, or some risk or responsibility was incurred upon the faith of the note by the defendant, there would be no justice in allowing him to retain the money simply because he had passed the amount to the credit of the Mastin Bank, and it still owes him a balance on account. — Miller v. Farmers and Mechanics Bank of Carroll Co., 30 Md. 401. It is certain that although plaintiffs so endorse the said note as to make the Mastin Bank, prima facie, absolute owner of the same, still plaintiffs can treat the defendant as their sub-agent, as to the collection of said note, unless misled by the character of said endorsement, [252] and upon the strength of it defendant has placed himself in a situation where it would subject him to loss or injury to treat him as such sub-agent. Now under the facts in •evidence in this case, the question as to whether the defendant has been placed in such a situation; as to whether he has been misled by the said endorsement, as to whether he has given any credit on account of the 'said note as endorsed, has been fairly submitted to the jury by plaintiffs’ declaration of law. This case is not within the rule laid down in the cases of Ayres v. Farmers and Merchants Bank (79 Mo. 421), and Bullene v. Coates (79 Mo. 426). In this case there was no transfer of title to the note from the Mastin Bank to defendant. In this case the evidence does not show that the note was endorsed and deposited with defendant “for credit and not collection and credit when collected”. ■Bullene v. Coates, supra. But, on the contrary, the defendant himself testified in this case that the note was received by him for collection and credit when collected, and not before. The rule to be applied to the facts of this case is laid down in the case's of Bank of Metropolis v. New England Bank (1 How. 234), where it is said: “If negotiable paper, not at maturity, be endorsed and delivered to another bank for collection, without notice that it does not belong to the former, the latter may retain the paper and its proceeds to satisfy a claim for a general balance against the formerf; if that balance has been allowed to .arise and remain on the faith of receiving payment from •such collection pursuant to a long usage between the two banks”; and Wilson & Co. v. Smith (3 How. 770), where it is said: “It appears from the statement that he (meaning •defendant) made no advances and gave no new credit to St. J ohn (in whose place in this case, the Mastin Bank stands) on account of this bill. He merely passed it to his credit in account. Now, if St. John had owed him nothing 'upon the principles we have already stated, the plaintiff would be entitled to recover his money, and we see no reason why he should be barred of his action .because1 St [253] John was debtor to the bank, since the case shows that he incurred no new responsibility upon the faith of this bill, and his transactions with St. John remained in all respects the same as they would have been if this bill had never been transmitted”; and Bank of the Metropolis v. New England Bank (6 How. 212), where this principle is enunciated: “And if the bank of the Metropolis had not notice that the Commonwealth bank was merely an agent, but regarded and treated it as the owner of the paper transmitted, yet the Bank of the Metropolis is not entitled to retain against the real owners unless credit was given to the Commonwealth Bank, or balances suffered to remain in its hands to be met by the negotiable paper transmitted in the usual course of the dealings between the two banks.” This rule is also recognized by Judge-Dillon, in the case of Levi v. National Bank (5 Dill. 107); and has been approved by the Supreme Court of Missouri, in Milikin et al. v. Shapleigh et al. (36 Mo. 599, 600. It seems to us that to the facts of this case, this rule thus declared is applicable, and that in plaintiffs’ declaration of law it has been fairly and correctly stated. There is nothing improper in the final clause of this declaration, which says: “And if the court shall believe and find from the evidence that said defendant kept his account with and a balance at said Mastín Bank to his credit, for his own convenience, made and kept up in part by money sent and placed there by defendant, upon and against which to draw exchange, then he is not entitled to claim the proceeds .of such collection to pay the balance due him from said Mastín Bank.” Because if defendant did so keep said account and balance he could not have kept the same on the credit of collections sent and to be sent to him by the Mastín Bank. It follows that in our opinion the court properly refused to give the declaration in the nature of a demurrer to the evidence asked by defendant. ■ II. As just said; the declaration of law-given for plaintiffs fully stated the rule of law applicable to the facts of [254] this case. And we think that the circuit court correctly refused to give the first declaration of law asked by defendant for the reason that it was not supported by the •evidence. The material part of that declaration, relieving the defendant of liability is, in the following words: “Providing the defendant made advances from time to time upon such paper to said bank.” Abstractly, this is certainly true. .But the effect of the .arrangement and general • course' of business between defendant and Mastín Bank had been fully explained in the plaintiffs’ declaration of law; and it does not seem to us from a study of the evidence in this case, given by •defendant himself, that it could have been reasonably inferred from said evidence that defendant had made at any time any advancement, or had given • any credit •especially upon the faith of the note in controversy. The judgment of the circuit court is affirmed. All concur.