Forster v. Second National Bank of New Albany

Mr. Justice Shepard delivered the opinion of the Court. Early in 1893, the Smith Corrugating Company ordered from the ¡New Albany Kail Mill Company, an Indiana corporation, a lot of iron for the purpose of using it in the construction of a building at the World’s Fair in Chicago. Before the iron was delivered, but after it had been shipped by the Kail, Mill company, the Smith company gave its note, dated April 20, 1893, to the Rail Mill company for $1,555.88, the purchase price of the iron, and that note was subsequently discounted by the appellee, the Second ¡National Bank. The iron was greatly delayed in transmission, but without the fault of the Smith company, and arrived too late to be used for the intended purpose—other iron having been purchased and used in its stead. Upon the arrival of the iron in Chicago, the Smith company, through its president, made arrangements with the agent, in Chicago, of the Rail Mill company, whereby the Rail Mill company, by its agent, agreed to take back the iron and return the note, and accordingly the iron was, on June 6,1893, warehoused at Chicago, in the name of the Waugh-Wilson Commission Company, which was the Chicago agent of the Rail Mill company. The connection of the Smith company with the iron seems to have altogether ceased with that transaction. As agent of the Kail Mill company, the Commission company afterward sold a small amount of the iron, and the proceeds of such sale went to the Kail Mill company, but the principal part of the iron remained as stored until it was attached, as hereafter stated. On July 22, 1893, the Rail Mill company made an assignment, under the laws of Indiana, to the Union Trust Company of Indiana, as assignee, and the deed of assignment was recorded on the same day, in Floyd county, Indiana, and in Cook county, Illinois, on August 3d, next ensuing. The Sloss Iron and Steel Company -was an Alabama corporation and a creditor of the Rail Mill company, and held its promissory notes, and commenced an attachment suit in Cook county on one or more of said notes, and garnisheed the World’s Fair corporation, but becoming satisfied that that corporation owed nothing to the Rail Mill company, dismissed the suit. Afterward the notes, aggregating $9,331, were assigned by the Sloss company to the appellants, residents and citizens of Illinois, who began this attachment suit on the same against the Rail Mill company, and attached the iron in question that had, as above mentioned, been' taken back from the Smith company by the Rail Mill company. The Second Rational Bank of Kew Albany, the Union Trust Company, assignee of the Rail Mill company, and the Smith Corrugating Company, severally filed interpleas in the suit, each claiming the iron upon different grounds. The court, hearing the cause without a jury, found against the appellants on the attachment issue, and gave judgment that the iron attached was the property of the appellee,' the Second Rational Bank of Rew Albany, as between it and all the parties plaintiff,, defendant, and interpleading, and directed the sheriff to deliver the same to said bank upon its delivering to the Smith company the note it had given for the iron. Whether the judgment of the Circuit Court was correct or not, must, so far as the Second Rational Bank of Rew Albany is concerned, depend upon the agreement between the Smith company and the Rail Mill company when, on June 6th, the iron was returned by the former to the latter company. If that agreement had been that the iron should be taken and sold and the proceeds applied to the payment of the Smith company’s note, which had been given for it and was then held by the bank, a trust relation in favor of the bank as holder of the note, would have arisen, and the judgment would be right. But that was most clearly not the agreement, and there was no agreement made that even tends to that result in any form it may be stated. The evidence does not support the contention of appellee’s counsel that the iron Was turned back for the purpose of paying with its proceeds the note held by the bank. Mr. Waugh, secretary of the Waugh-Wilson company, which was the agent in Chicago of the Bail Mill company, testified that “ the iron was turned over to the New Albany Bail Mill Company because there was a delay in the shipment; the iron was to go on certain work of Mr. Smith’s at the World’s Fair, and he was obliged to buy iron to complete the contract with the World’s Fair because of the delay; that had left him with this iron on his hands; he did not know where to get money to pay for it when the account became due, and said, c Here, you take that iron and give me credit for it, * * * here, you give me back the note and you take the iron.’ * * Nothing particular was said in reference to the note at the time the iron was turned over to me, except that the note was paid by the iron. In other words, the payment of the note was advanced and the note was to be returned. I did not have the note there. * * * I have never been able to return the note. * * * The iron was returned from the Smith Corrugating Company on June 6th, and I immediately warehoused it. * * * I sold some of it * * * as agent of the New Albany Bail Mill. * * * The proceeds of this sale went to the New Albany Bail Mill Company in part. "x" ® * I took this (warehouse) receipt in the name of the Waugh-Wilson Commission Company, as agent of the N ew Albany Bail Mill Company.” In all the testimony, there was nothing stated by any witness inconsistent with this testimony of Mr. Waugh, and we fail to find in it any agreement, or understanding even, that the iron should be sold, or that its proceeds should in any way be used to pay or secure the note. There is nothing to show that Smith knew at that time that the note had been discounted by the Eail Mill company, nor but that the Eail Mill company was at that time in good financial repute and credit. The inference is clear, from the evidence of both Waugh and Smith, for they both wrote to the Eail Mill company for the note to be delivered up, that they supposed the note was within the easy control of the Eail Mill company. The note was dated April 20 th, and being at sixty days, was not due. Waugh testified that he wrote to Mr. Trinler, the manager of the Eail Mill company, for the note, and that Trinler said that inasmuch as the note was not due, he would take the iron and pay the note with it, and the note was to be given up. Under the facts in the case, it seems quite clear that no trust relation in favor of the bank which held the note was created by the transaction, and that it was error to direct the delivery of the unsold iron to the bank. By the judgment of the Circuit Court, the interplea of the Union Trust Company, assignee of the Eail Mill company, was dismissed. From that order the Trust company prayed, and was allowed, but did not perfect an appeal, and does not appear to be represented here, although its rights have been argued somewhat by the appellee, the Smith company, and by the appellant. We will, therefore, for the purpose of affording the full relief to which we consider appellants as entitled, say that it seems that the order dismissing the interplea of the Trust company was right. The deed of assignment from the Eail Mill company to the Trust company was made and recorded in Floyd county, Indiana, which we assume was the place of the home office of the Eail Mill company, on July 22, 1893, and was recorded in Cook county, Illinois, where the iron was in warehouse, on August 3, 1893. This attachment was levied on the iron on August 18, 1893. There is no evidence tending even to show that the Trust company ever did anything prior to the levy of the attachment, in assertion of its claim to the iron. An assignee has a reasonable time after the assignment to take possession of the property of the assignor, as against execution or attaching creditors. Lowe v. Matson, 140 Ill. 103; Feltenstein v. Stein, 157 Ill. 19. But so long a delay as here occurred, twenty-seven days, after the making of an assignment in Indiana, a State adjoining Illinois, is, in our opinion, too long, and is unreasonable. We therefore think that as to these appellants, at least, the interplea of the Trust company was properly dismissed. And in saying this we concede all that is urged upon us concerning the effect of the assignment, under the laws of Illinois, although made in another State. Some point is made upon the conceded fact that the notes upon which the attachment was brought, were in reality the property of a foreign corporation, and had been assigned to citizens of Illinois for the purposes of the suit alone. By the assignment of the notes to the appellants, they held the legal title to the notes, and were the proper parties to bring suit. Ridgely Bank v. Patton, 109 Ill. 479; Lohman v. Cass Co. Bank, 87 Ill. 616; Caldwell v. Lawrence, 84 Ill. 161. Our conclusion, therefore, is that the judgment should be reversed and the cause remanded to the Circuit Court, with directions to that court to render judgment in favor of appellants and against the said Second National Bank of New Albany and the Union Trust Company of Indiana on their respective interpleas, and to award to appellants a special execution against the attached iron. Reversed and remanded, with directions.