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Lechmere v. Fletcher, 1 Cromp. & M. 623; Fairchild v. Holly, 10 Conn. 474; Davis V. Anable, 2 Hill, 339; Burnheimer v. Hart, 27 Iowa, 19; 99 Am. Dec. 641. See Greenfield v. Wilson, 13 Gray, 384; Moore v. Loring, 106 Mass. 455; Miller's River National Bank v. Jefferson, 138 Mass. 111; Stillwell v. Bertrand, 22 Ark. 379; Corn Exchange Ins. Co. v. Babcock (No. 2), 8 Abb. Pr., N. 8., 256; United States v. Cushman, 2 Sum. 426, 440.
The principlo of the cases last cited is decisive of the one at bar. No distinction favorable to the defendant can be taken between an agreement made as itself collateral security, and an agreement to furnish collateral security. If there were any difference, it would be in favor of the plaintiffs; for the collateral contracts recovered on in the cases cited were simply other contracts of the defendant to pay money, whereas the contract of this defendant was a contract to get a third person to indorse, as we have stated. It is true that in most of the cases there were other parties defendant in the first or second suit. But that circumstance had nothing to do with the ground of the decisions, as indeed it could not have had by any technical rule. The ground was that stated by Lord Ellenborough in Drake v. Mitchell, 3 East, 251, and approved by this court in Lord v. Bigelow, 124 Mass. 185, 189: "A judge ment recovered in any form of action is still but a security for the original cause of action, until it be made productive in satisfaction to the party; and therefore till then it cannot operate to change any other collateral concurrent remedy which the party may have." Parsons, C. J., states the law in the same way: "A judgment in a suit, where the action is given as a remedy merely cumulative, is no bar, unless such judgment has been satisfied; for although there may be two remedies, there can be but one satisfaction": Storer v. Storer, 6 Mass. 390, 393.
The technical effect of the judgment as a bar would be the same, whether the defendant in both suits were the same, or other defendants were joined in any one of them. The rule as stated by the courts in all the cases applies with equal force, whichever may be the fact. If we were to depart from that rule, and to say that a man should have but one judgment, although he had different causes of action, when we thought be could get from a single judgment all the satisfaction he was likely to get, we should be legislåting, instead of follow
ing the precedents, and legislating in very doubtful accord with the contracts of the parties.
JUDOMENTS — MERGER – As to when a cause of action is merged in a judgment, and when not, see note to Speed v. Hann, 15 Am. Dec. 81-83.
FREEMAN'S NATIONAL BANK V. NATIONAL TUBE
[151 MASSACHUSETTS, 413.) INDORSEMENT OF DRAFT FOR THE PURPOSE OF COLLECTION ON A0000NT
OF ITS OWNER passes the legal title so far only as to enable the indorsoo to demand, receive, and sue for the money to be paid. The owner may still control the paper, unless paid, and may intercept the proceeds of it
in the hands of the intermediate agente LIDORSEMENT OF A DRAFT BY BANK A TO BE PAID TO BANK B FOR AO
COUNT OF Bank A, and its indorsement by bank B that it is to be paid to bank F for account of bank B, do not imply that the draft is the property of bank B, but merely that it is to be paid to bank B as agent of bank A. An unbroken succession of such indorsements would indi. cate that each indorser was acting by direction of the next preceding indorser, who was himself the agent of the original owner, for whom the collection was to be made; and when it is made to the last indorsee, he bas no right to apply it as having been the property of the last indorser, and if it remains uncollected to advance him moneys on account of it, and to enforce its collection as against the equitable owner to reimburse himself for such advances
ACTION of contract upon one draft for twenty thousand dollars, the other for nine thousand nine hundred dollars, and for Beven thousand dollars alleged to be paid for defendant's use. The first and second drafts were identical, except as to the amounts thereof, and the first draft and the indorsements thereon were as follows: "20,000.
McKEESPORT, PA., May 17, 1884. “At sight, for value received, pay to the order of A. Chau. don twenty thousand dollars, and charge this office as per margin.
“NATIONAL TUBE WORKS Co.,
By E. C. CONVERSE, Asst. Mgr., for President. "To Wu. 8. EATON, Treas., 8 Pemberton Square, Boston,
Across the face of each draft was the following: “May 19–84. Accepted, E. R. Hall, Asst. Treas."
The drafts bore the following indorsements successively: “Pay to the order of C. R. Stuckslager, Cashier. A. Chaudon."
“Pay Penn Bank, or order, for account of People's Bank, McKeesport, Pa. C. R. Stuckslager, Cashier. T. D. Gardner, As. Cash.”
“Pay Freeman's National Bank, Boston, or order, for account of Penn Bank, Pittsburgh, Pa. C. L. Reiber, Cashier."
When the drafts sued upon were drawn, Edward C. Converse was the assistant general manager of the defendant at McKeesport, Pennsylvania, and A. Chaudon was a clerk in its employ. The drafts were drawn without any consideration and were deposited in the People's Bank of McKeesport, of which C. R. Stuckslager was cashier, in which bank the defendant had an account by its officers on its bebalf. The drafts were at once sent by the People's Bank to its correspondent, the Penn Bank of Pittsburgh, indorsed as shown above, accompanied by a letter stating "We indorse for collection and credit." The People's Bank did not pay the drafts, nor make any advances or give any credit thereon, or make any entry of them in its books, though it acknowledged their receipt in a letter of which it kept a pressed copy, saying that euch draîts were entered for collection, “ to be used when paid." The drafts were not charged to the Penn Bank by the People's Bank, nor did the latter draw anything on account thereof. They were, however, entered on the books of the Penn Bank to the credit of the People's Bank, and to the debit of the plaintiff bank, in the mode in which it entered all cash items in its current account with those banks, but nothing was paid thereon. On the same day, May 17th, the Penn Bank sent the drafts to the plaintiff, which was its correspondent at Boston, accompanied by a letter stating that the drafts were inclosed for collection, and on the same day drew a check on the plaintiff bank to the order of the American Exchange Bank for seven thousand dollars and credited the amount to the plaintiff. The plaintiff received the drafts on May 19th, and they were accepted by the defendant on the same day. The day afterwards, the check of the Penn Bank for seven thousand dollars reached the plaintiff and was paid by it. At the close of business on May 19th, there was upon the books of the plaintiff bank a balance to the credit of the Penn Bank of $1,238.95, while at the close of business on May 20th, the balance to the debit of the Penn Bank was $6,063.76. The plaintiff entered the drafts upon its collection-book, but not upon its account current, nor upon any other book or aocount, to the credit of the Penn Bank. The latter, on the 21st or 22d of May, failed, and the defendant's treasurer was notified by the People's Bank and by the manager of the defendant not to pay the drafts. Payment was thereupon refused. The object of drawing the drafts was to procure funds from Boston to pay the expenses of the defendant at its mills at McKeesport, and every month drafts were drawn in similar form and for similar purpose, generally exceeding one hundred thou. sand dollars, and were indorsed in precisely the same way and passed through the same banks. Neither of the drafts was collected by the plaintiff, but it brought action thereon against the defendant, by which they had been accepted.
W. G. Russell and J. Fox, for the plaintiff.
KNOWLTON, J. The indorsement from the defendant to the People's Bank, although in terms unrestricted, was without consideration, and werely for the purpose of collection. The People's Bank became the agent of the defendant, and the defendant, as owner of the drafts, can avail itself of all that its agent did for its protection.
The subsequent indorsements through which the drafts came to the plaintiff were both restrictive, giving notice that the ownership had not passed beyond the People's Bank. They purported to be made only for the purpose of collection on account of the owner, and they merely passed the legal title so far as to enable the indorsees to demand, receive, and sue for the money to be paid: Lynn National Bank v. Smith, 132
Mass. 227. It is well settled that upon such an indorsement • the owner may control his negotiable paper until it is paid,
and may intercept the proceeds of it in the hands of an intermediate agent: Manufacturers' National Bank v. Continental Bank, 148 Mass. 553; 12 Am. St. Rep. 598, and cases there cited. The indorsement of the Penn Bank, taken in connection with the former indorsement of the People's Bank, did not, by the words “for account of Penn Bank,” imply that the Penn Bank was the owner. It was a request to pay
“ for account of” the Penn Bank as agent of the People's Bank. An unbroken succession of such indorsements would indicate that each indorser was acting by direction of the next preceding indorser, who was himself an agent of the owner, who had before indorsed, and for whom the collection was to be made.
Nothing was shown in the course of business of either of the banks necessarily to conflict with the implication to be derived from the form of the indorsements. The letter of the People's Bank in which the drafts were sent to the Penn Bank was, simply, “We inclose for collection and credit” the drafts, describing them. The Penn Bank, in its reply, said, “We enter for collection” the drafts described, "to be used when paid.” As recited in the report, "the drafts, when received by the Freeman's Bank, were entered upon its collection-book, but have never been entered upon its account current, or upon any other book or account, to the credit of the Penn Bank.” It has 80 long been held by the courts that an indorsement of this kind is restrictive, protecting the rights of the owner, that officers of banks must be presumed to have well understood the law, and when they have honored overdrafts drawn by other banks which had sent other drafts for collection, must have done it trusting in part to the financial soundness of their correspondent, and in part to the probability that the drafts would be paid, and not to a supposed legal right to control the drafts against the owner: Rice v. Stearns, 3 Mass. 225, 227; 3 Am. Dec. 129; Wilson v. Holmes, 5 Mass. 543; 4 Am. Dec. 75; Treuttel v. Barandon, 8 Taunt. 100; Sigourney v. Lloyd, 8 Barn, . & C. 622; Leary v. Blanchard, 48 Me. 269; Sweeny v. Easter, 1 Wall. 166; Bank of Washington v. Triplett, 1 Pet. 25; Lawrence v. Stonington Bank, 6 Conn. 521; Bank of Metropolis v. New England Bank, 1 How. 234; 6 How. 212.
One who collects commercial paper through the agency of banks must be held impliedly to contract that the business may be done according to their well-known usages, so far as to permit the money collected to be mingled with funds of the collecting bank: Dorchester and Milton Bank v. New England Bank, 1 Cush. 177. When a payment is made to his agent and the money is put with the money of the collecting bank, he has a right to receive a corresponding sum, but he loses his right to the specific fund. In the absence of directions to the contrary, the collecting bank may pay it to the bank to which it should regularly be remitted by setting it off against a debt due from that bank and giving credit for it in the account.
Very likely, authority to collect would authorize the receipt of the money from the payor before maturity, if he saw fit then to pay, and remittances afterwards made, whether by a parment of money or by a set-off and adjustment of accounts in