Court Opinion

ID: 6544201
Source: CourtListenerOpinion
Date Created: 2022-07-19 22:18:14.76213+00
Date Added: 2024-06-11T15:55:55.281296
License: Public Domain

Bunn, C. J., (dissenting.) The judgment of the court below is reversed by the majority of this court, because that court erred in refusing to give the following instruction, to-wit: “The court instructs the jury that if you find from the evidence that the Bank of Mammoth Springs, and the plaintiff, St. Louis National Bank, were correspondents, and that on the 21st of July, 1897, the defendant had in the hands of the Bank of Mammoth Springs six hundred dollars, with instructions for that amount to be paid on che note against him held by the plaintiff, and that you further find that at the same time the Bank of' Mammoth Springs had received the defendant’s note for collection, and that the Bank of Mammoth Springs, on the 21st day of July, 1897, charged up the six hundred dollars to the defendant, and entered up to the credit of the St. Louis National Bank, the plaintiff, the said six hundred dollars in their usual course of banking business as correspondents of said St. Louis National Bank, then you would be authorized to find for the defendant.” There are several things in this instruction which, if announced as rules of law, would lead to remarkable consequence's. In the first place, it is announced that the fact of being a correspondent of the St. Louis National Bank would authorize a verdict for the defendant under the circumstances of this case; that is to say, such a fact would be sufficient to bind the plaintiff by the acts of the Mammoth Springs Bank as its agent to collect said note. It is manifest, I think, that all that could or should have been said by the court in an instruction on the subject was that if the jury should find that the defendant paid at the Mammoth Springs Bank, and to that bank to be applied to the note in question, the said sum, or any part thereof, at the time or after the receipt by the Mammoth Springs Bank of the note in question, then they should find for the defendant to the extent of such payment. Even this would have been in a violation of a rule laid down by this court, to be referred to later on, and when, therefore, I say that such was all the court should have given by way of instruction on the subject, I don’t mean that even that is strictly the law, but only that, the verdict of the jury and judgment of the court being based on that theory, it was all that the defendant could ask, since the jury, in giving its verdict for $400 only, evidently found that the last two hundred alleged to have been paid was in fact paid, after the reception of the note for collection by the Mammoth Spring Bank at 11 o’clock a. m. of the 21st July, and therefore was paid when said bank was in fact the agent of the plaintiff to collect the note, and for that reason should be deducted in favor of defendant from the $600 claimed by the plaintiff. The $400 for which the judgment was given, according to defendant’s testimony, was paid some days before the arrival of the note for collection—before the Mammoth Spring Bank became the agent of the plaintiff in any sense, unless we say, as the refused instruction seems to say, that a business correspondence constitutes the one the agent of the other correspondent. These payments by the defendant, it appears, were not payments in money, but by checks on the Mammoth Springs Bank, in which the defendant had funds on deposit to his credit, for in his testimony he says: “Q. What was the amount of the payment on the 21st. A. I think it was $200, but am not positive. I differ from Mr. King (president of the Mammoth Springs Bank) as to the amount of the payments I made. He thought there was three $200 payments, but my recollection is that thex’e were two $100 checks and two $200 checks. I had money in the bank, and wrote checks on the bank, and told them to put it on the note, and the whole $600 was charged to me, I suppose.” So, then, no actual money was paid, but the defendant merely drew his checks on this bank against funds he had in. it, and directed the amounts so drawn to be credited on or to said note. This strang6 transaction is more or less explained by the further testimony of defendant that he still thought, when making these payments, that the note was owned by the Mammoth Springs Bank, the original payee, and never knew that it belonged to the plaintiff, or had been assigned to any one, until the Mammoth Springs Bank had closed its doors. When the payments amounting to $400 were made, the Mammoth Springs Bank was the depository of the defendant— his agent. The question is. when did that agency cease? A receipt was given by the president of that bank to the defendant for these payments, as they were made, as follows: “July 21st, 1897, received of F. M. Daniel $600 as part payment of hisnote of $1,000, payable to the Bank of Mammoth Springs, and due July 30th, 1897.” [Signed] “Bank of Mammoth Springs, by H. G. King, President.” So, after all, the credits were not given to defendant on his note except that of 21st July—that is, as credits on the note or to be applied on the note—unless the bank book entries otherwise indicated, the exact language of which we have not. H. G. King, the president of the bank, and the person who seems to have dealt for the bank in the matter, says he did not enter this credit of $600 upon the note, because there was yet $400 due on it. When the Mammoth Springs Bank received the note for collection, on the 21st, July, it had this indorsement on it: “Pay Bank of Mammoth Springs or order.”’ [Signed] “St. Louis National Bank.” This constituted the authority of that bank, to collect the note. King says further that on the morning of the 23d of July, “I returned it to the St. Louis National Bank,” And it appears elsewhere that it then had no additional indorsements on it—of payment or otherwise. In other words, notwithstanding what was said as to the appropriation of payments, none of them were indorsed as credits on the note, and the plaintiff was not informed of them. It is, of course, not to be denied that the Mammoth Springs Bank is liable to the plaintiff for any money the former had actually collected for the latter. And neither can it be denied that the defendant is entitled to credits on his note of amounts actually paid by defendant to it, whether directly made’or through its duly authorized agent, but have such payments been made, and in a manner recognized by the rules of law regulating commercial transactions of the kind"? The legal principles governing such cases appear harsh at first blush, and yet they are a necessity. The defendant never once thought, when making the alleged payments, to ask where the note was, or to whom it belonged at the time. He assumed that it was still the property of the local bank—the original payee. He paid the several amounts not in money, but by checks on this same bank, and against funds he then had therein. It is unnecessary to ask why he did not pay the $600 all at once. Nor need we advert to the fact that the bank was then in the throes of death, for its doors were closed on the morning of the 23d of July, 1897. But enough as to the facts, except to say that the defendant, being a depositor in the bank to the extent at least of this $600 up to the afternoon of the 21st, would have lost the same by the failure of the bank within the two succeeding days, unless his deposits could be made to pay his debt to the plaintiff, as is sought to be done in the defense to this suit. Under the rule laid down in Jenkins v. Shinn. 55 Ark. 347, the Bank of Mammoth Springs was defendant’s agent up to the afternoon of the 21st, in all things respecting the payments he had made to be appropriated to the payment of the note. How stands it afterwards? In L. R. & Ft. S. Ry. Co. v. Wiggins, 65 Ark. 385, we said: “An agent, having' authority merely to accept payment at maturity of notes due his principal, has no implied authority to alter the contract by accepting payment of a note before its maturity.” I quote from the syllabus. Besides, the mere drawing of checks on the Mammoth Springs Bank was not payment to plaintiff, but a request to the Mammoth Springs Bank to pay this much on the note, for a third party cannot make the agent of his creditor the payee of his debts, and hold his creditor bound by such an arrangement. There was no money paid by defendant, nor check on solvent bank given by him, for the plaintiff. Henry v. Oonley, 48 Ark. 267. The instruction asked and refused does not reflect the law of the ease made, in my opinion, and was properly refused. Battle, J., absent.