Court Opinion

ID: 3298729
Source: CourtListenerOpinion
Date Created: 2016-07-05 17:15:42.18063+00
Date Added: 2024-06-11T13:41:00.931204
License: Public Domain

I dissent.
Under the facts as stated in the main opinion I am of the view that the defendant is liable for the failure of its subagent to carry out the trust which the initial bank accepted. There is a conflict of authority, as stated by Mr. Justice Lawlor, on the question of the liability of initial banks. The United States supreme court, New York, and a number of other states hold with the elementary principle of the law of contracts which is to the effect that the original principal may look to the original contractor with himself and is not obliged to look to inferior or distant under-contractors or subagents, when defaults occur injurious to his interests. (See Magee on Banks and Banking, 3d ed., 501.) This doctrine is known as the New York rule. California, by the three decisions cited, Massachusetts and other states, support the doctrine announced in the main opinion of this court, which is known as the Massachusetts rule. The California cases have to do with drafts sent from one bank to another for collection. So do practically all of the cases cited. The question here, in my judgment, involves a duty cast upon defendant to deliver money to a designated person in Italy. Certain words were stipulated into the case which brings it within the Massachusetts rule. I have no doubt but that the plaintiff understood that the defendant undertook to do the thing which he desired to have done, to wit, the delivery of $500 to his mother. There can be no doubt but that he felt secure in his transaction, otherwise he would not have *Page 649 
sought the services of a bank. He could and doubtless would have assumed the risk himself if he had known the bank furnished him practically no protection.
The word "remit" in its primary sense means to send in return, as money in payment of goods. Transmit is to send through or across; to act as a medium of passage. The word "remit" as applied to the facts of the case at bar is not an apt term. But fine shades of meaning should not be resorted to in a transaction such as this. Plaintiff's purpose was simple and easily understood. It is very evident that be delivered his money to defendant with a sense of assurance that the bank was responsible to him for the delivery of the money which he desired to send. This is a natural, common-sense view of a very simple transaction. There can be no doubt but that the business public generally, including a vast majority of those experienced in commercial transactions, hold the belief that when money is delivered to a bank to be sent by it to a person in a foreign country, as in this case, the initial bank accepts the trust with the understanding that should the money be lost or paid by a subagent to a person not entitled to receive it the initial bank is liable in the first instance to the principal. This is a reasonable rule and does not impute to the public a knowledge of the customs that may prevail in banking circles but which are actually unknown to the public. No hardship will fall to anyone. Banks accepting moneys to be sent abroad will doubtless charge a fee or carriage charge commensurate with the risk assumed, if this is not already the practice. Surely a person would much prefer to pay a reasonable charge for the privilege of enjoying the protection which the law of agency supposedly affords than to be left to the dubious remedy of proceeding against an agency not of his choosing. A departure from the doctrine laid down in the three California cases, if the rule there adopted extends to this case, will not unsettle business conditions nor disturb vested rights.
Inasmuch as the question involves in a measure our relations and dealings with foreign countries it would seem as a matter of policy and convenience that the several states should follow so far as possible the rule adopted by the supreme court of the United States.
The judgment of the trial court, in my opinion, should be affirmed. *Page 650